FIXED ASSETS

Asset:
The asset is a basic unit of economic value that is expected to provide benefit beyond a single period. The
value of asset is recorded on the company balance sheet.
Assets are of two Types:

Current Assets
Fixed Assets

Current Assets:
Assets which are used for the organization for less than a year are called current assets. Easy for
liquidation is possible. Generally we wont be doing depreciation for the kind of current assets.
Examples: Cash, Marketable Securities, Short-term Investments, Prepaid Expenses, Inventory etc.

Fixed Assets:
Assets which last in a company and are used for more than a year are called fixed assets. Not easy for
liquidation. Generally we do depreciation for the kind of fixed assets.
Examples: Land & Building, Vehicles, Plant & Machinery, Computers etc.

What is Depreciation?
Depreciation is nothing but a return down value of an Asset.
Example: Every organization may follow their own rules.

Computers
Phones/Mobiles
Vehicles
Land & Building

4 years
5 years
10 years
20 years

Assume that the value of computer is 30000/30000/4

= 7500/- (its yearly depreciation)

7500/12 Months

= 625/- (its monthly depreciation)

After 4 years the Asset value of the Computer is going to be zero.

But generally we do depreciation only for yearly basis.

What is the Purpose of Using Fixed Assets Module by an Organization?

To track the depreciation

To track the Asset Location
To track the assets information in terms of category, leases etc.

KFF Information in Fixed Assets

Asset Key
Asset Category
Asset Location

Asset Key: Basically used for reporting purpose (we define to identify assets with unique value). This can
be optional.

Asset Category:

Major Category (independent segment)

Minor Category (dependent segment)

Examples:

Computer Peripherals (Major category)

Laptop (Minor category)
Desktop (Minor Category)
Printers (Minor Category)
Scanners (Minor Category)

Vehicles (Major Category

4 Wheelers ( Minor Category)
2 Wheelers (Minor Category)

Asset Location :( Locating the Asset)

Country

India

State

Maharashtra

City

Pune

Building

EON

Key Points:
Only one structure we can have for Fixed Assets
Only one open period we can have for Fixed Assets
Fixed Assets doesnt support Multi Org Structure

General Fixed Assets Life Cycle

Oracle Fixed Assets Business Process:

There are four main business Process in Oracle Assets Process Cycles:

Additions
Adjustments/Transfers
Depreciation
Retirements

Additions:
There are three different ways through which assets can be entered into oracle apps via Manual Additions,
Detail Additions and Mass Additions

 Quick or Manual Additions: It allows you to use the Quick Additions process to quickly enter
ordinary assets when you must enter them manually. You can enter minimal information in the
Quick Additions window, and the remaining asset information defaults from the asset category,
book, and the date placed in service. The good is that quick addition requires only one screen to
enter an asset.

Navigation Path
Assets -> Asset Workbench

Click on Quick Additions button

User enters data through the form and the information is inserted into the following tables:
FA_ADDITIONS
FA_BOOKS
FA_ASSET_HISTORY
FA_DISTRIBUTION_HISTORY
FA_TRANSACTION_HEADERS
FA_DEPRN_SUMMARY
FA_DEPRN_DETAIL
FA_TRANSFER_DETAILS
Detail Additions:
Detailed Additions allows us to input more complex assets that cannot accept defaults.
Additional asset details could include lease and leasehold improvements, salvage value, multiple
assignments, or changes to category defaults.

Assets that have salvage value

Assets with more than one assignment

Assets with more than one source line

Assets to which category default depreciation rules do not apply

Subcomponent assets

Leased assets and leasehold improvements

Navigation
Assets - > Assets Workbench

Mass Additions:
Mass Additions come into the Oracle Assets by a spreadsheet entry through ADI (Applications
Desktop Integrator) or through a concurrent program called Mass Additions Create (This can
be from Payables or from Projects depending on the nature of the business). Data is inserted into
the following tables:
FA_MASS_ADDITIONS (asset details)
FA_MASSADD_DISTRIBUTIONS (invoice and invoice distribution details)

Navigation
Mass Additions - > Post Mass Additions

Additions Integrator

From Projects/Payables: the following concurrent program

Adjustments: Different asset adjustments include:

Changing Asset Details - You can change descriptive information for an asset at any time.
Changing asset descriptive information other than category and units has no financial impact on
the asset.

Reclassifying Assets Reclassify assets to update information, correct data entry errors, or when
consolidating categories. You can update financial information for a single asset or a group of
assets. When you reclassify an asset in a period after the period you entered it, Oracle Assets
creates journal entries to transfer the cost and accumulated depreciation to the asset cost and
accumulated depreciation accounts of the new asset category.

Adjusting Accounting Information - You can adjust financial, depreciation, distribution, and
invoice information for a single asset or a group of assets. Before running depreciation in the
period in which you added the asset you can change any field. After you have run depreciation in
any period after the one you added the asset, you can change asset cost, salvage value, prorate

convention, depreciation method, and life .You can choose whether to amortize or expense the
adjustment

Assets Transfers
o

You can transfer assets between employees, depreciation expense accounts, and locations.
When transferring assets, you should consider the following:

You can change the transfer date to a date in a prior period for a particular
transfer, but the transfer must occur within the current fiscal year

You can change the transfer date of an asset to a prior period only once per asset.

You cannot transfer an asset to a future period.

You can transfer a single asset or a group of assets.

Depreciation:
Running depreciation to process all assets in a book for a period. If you have assets that have not
depreciated successfully, these assets are listed in the log file created by Oracle Assets when you run
depreciation.
When you run depreciation, Oracle gives you the option of closing the current period if you check the
Close period check box on the Run Depreciation window. If all of your assets depreciate successfully,
Oracle automatically closes the period and opens the next period for the book. If you do not check the
Close Period check box when you run depreciation, Oracle Assets does not close the period.
Once depreciation has been processed for an asset in the current open period, you cannot perform any
transactions on those assets unless depreciation is rolled back or the current period is closed.

Navigation:
Depreciation - > Run Depreciation

Retirements:
Retire an asset when it is no longer in service. For example, retire an asset that was stolen, lost, or
damaged, or that you sold or returned.
You can retire an entire asset or you can partially retire an asset. When you retire an asset by units, Oracle
Assets automatically calculates the fraction of the cost retired. When you retire an asset by cost, the units
remain unchanged and the cost retired is spread evenly among all remaining assignment lines.
You can retire a single asset or a group of assets.
Mass/Group Retirements can be achieved using any of the following criteria:

Expense Account

Location

Category

Range of Asset numbers

Date placed in service

You cannot retire an asset if you added it in the current period.

Although the depreciation program automatically processes retirements, you can run the Calculate Gains
and Losses program several times during the period to reduce period end processing time.
When an asset is retired before it is fully depreciated, Oracle FA calculates the gain or loss on the asset
retirement. The calculation is based on the following formula: Proceeds of Sale minus Cost of Removal
minus NBV Retired plus Revaluation Reserved Retired equals Gain/Loss on Retirement.
Please take a note , Oracle calculates the gain/loss based upon

Proceeds: The sale price

Cost of Removal: How much did it cost to remove it?

Current Net Book Value: Original cost less accumulated depreciation.

With this information Oracle calculates the gain or loss as well as creates the appropriate journal entries to
remove the asset cost and accumulated depreciation from the general ledger. It also uses clearing accounts
to make a Receivables entry if you sold the asset and a Payables entry if you had to pay someone to
remove it.
At asset retirement, the cost of removal and disposal proceeds is entered which aids in the computation of
Gain/Loss on Disposal, however there is no direct link between the sub-ledgers (AP or AR)

Navigation:
Mass Transactions - > Retirements

Asset Books in Oracle Fixed Assets:

Oracle fixed assets allows us to use multiple asset registers or asset books they are:

Corporate Books
Tax Books

Corporate Books: Holds all the asset information, to post depreciation to relevant corporate general
ledger set of books in accordance with the corporate policy and business rules practice.
Tax Books: It uses statutory rules to depreciate the assets. Tax books gets the data from the corporate
books excluding the depreciation information. Mass copy is the process of transferring the assets and
transactions from the corporate books to tax books.
Mass copy is of Two Types:

Initial Mass Copy

Periodic Mass Copy

Initial Mass copy is used initially to populate the tax books by adding the existing assets to a tax books. It
copies all the assets added to your corporate books before end of current fiscal year into the open
accounting period in your tax book.
Initial Mass copy program copies the following information of an asset from the corporate books:

Cost

Original Cost

Units

Date Placed in Service

Salvage Value

Asset Category

Initial mass copy is also used when creating a new tax book.
Periodic Mass copy is used each period to keep your tax book updated with your corporate book.
Generally most of the organizations use both corporate as well as tax type of asset books.