Professional Documents
Culture Documents
Ans) You can use one of the following processes to enter new assets:
QuickAdditions
Use the QuickAdditions process to quickly enter ordinary assets when you
must enter them manually. You can enter minimal information in the
QuickAdditions window, and the remaining asset information defaults from
the asset category, book, and the date placed in service.
Detail Additions
Use the Detail Additions process to manually add complex assets which the
QuickAdditions process does not handle:
Subcomponent assets
Mass Additions
Use the Mass Additions process to add assets automatically from an external
source. Create assets from one or more invoice distribution lines in Oracle
Payables, CIP asset lines in Oracle Projects, asset information from another
assets system, or information from any other feeder system using the
interface. You must prepare the mass additions to become assets before you
post them to Oracle Assets.
To run depreciation:
3. Choose Run to submit concurrent requests to run the calculate gains and
losses, depreciation, and reporting programs.
Attention: You cannot enter transactions for the book while depreciation is
running.
Oracle Assets automatically runs the Journal Entry Reserve Ledger report
when you run the depreciation program for a corporate book, and the Tax
Reserve Ledger report for a tax book, so you can review the depreciation
calculated.
4. Review the log files and report after the request completes.
Prerequisites
Set up your journal entry formats. See: Defining Journal Sources and
Defining Journal Categories.
Suggestion: The name you enter appears in List of Values windows which
allow no more than 15 spaces. You may want to limit the
book name to 15 characters.
Ans) 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 cost, the units remain unchanged and the cost
retired is spread evenly among all assignment lines
Restrictions
You cannot retire assets by units in your tax books; you can only perform partial
and full cost retirements in a tax book. Also, you can only perform full
retirements on CIP assets; you cannot retire them by units, or retire them
partially by cost.
If you perform multiple partial retirements on an asset within a period, you must
run the calculate gains and losses program between transactions.
Gain/Loss = Proceeds of Sale - Cost of Removal - Net Book Value Retired +
Revaluation Reserve Retired
If you partially retire a units of production asset, you must manually adjust the
capacity to reflect the portion retired.
Exceptions
Oracle Assets does not retire the following types of assets, even if they are
selected as part of a mass retirements transaction:
Assets with transactions dated after the retirement date you enter
Assets that are multiply distributed and one or more values do not meet the
mass retirement selection criteria
You can retire an asset or a group of assets from any depreciation book without
affecting other books. To retire an asset from all books, retire it from each book
separately, or set up Mass Copy to copy retirements to the other books in the
Book Controls window.
ITC Recapture
If you retire an asset for which you took an investment tax credit (ITC) and the
ITC recapture applies, Oracle Assets automatically calculates it.
You can undo asset retirement transactions, and Oracle Assets creates all the
necessary journal entries for your general ledger to catch up any missed
depreciation expense. You can reinstate an individual or mass retirement
transaction. For multiple partial retirements, You can reinstate only most recent
or processed retirement. You cannot reinstate an asset retired in a previous
fiscal year. You can only reinstate assets retired in the current fiscal year.
Retirement Conventions
Oracle Assets lets you use a different prorate convention when you retire an
asset than when you added it. The retirement convention in the Retirements
window and the Mass Retirements window defaults from the retirement
convention you set up in the Asset Categories window. You can change the
retirement convention for an individual asset in the Retirements window before
running the Calculate Gains and Losses program.
Retirement Transactions
You can retire retroactively only in the current fiscal year, and only after the
most recent transaction date.
You can enter proceeds of sale and cost of removal amounts when you perform
a retirement or mass retirement. For a mass retirement, you enter the total
proceeds of sale and/or the total cost of removal amounts, and Oracle Assets
prorates the total amounts over the assets being retired according to each
asset's current cost.
Oracle Assets uses the following formula to prorate the proceeds of sale amount
across the assets you select:
Proceeds of Sale (per asset) = Current cost of asset/Total current cost of all
selected assets X Proceeds of Sale
Oracle Assets uses the following formula to prorate the cost of removal amount
across the assets you select:
Cost of removal (per asset) = Current cost of asset/Total current cost of all
selected assets X Cost of Removal
5. What are the various Journal Entries generated through fixed assets?
Ans)
Addition Journal
You purchase and place the asset into service in Year 1, Quarter 1.
Payables System
Account Description Debit Credit
You place an asset in service in Year 1, Quarter 1, but you do not enter it into
Oracle Assets until Year 2, Quarter 2. Your payables system creates the same
journal entries to asset clearing and accounts payable liability as for a current
period addition.
Oracle Assets - PRIOR PERIOD ADDITION
When you merge two mass additions, Oracle Assets adds the asset cost of the
mass addition that you are merging to the asset account of the mass addition
you are merging into. Oracle Assets records the merge when you perform the
transaction. Oracle Assets does not change the asset clearing account journal
entries it creates for each line, so each of the appropriate clearing accounts
clears separately.
As an audit trail after the merge, the original cost of the invoice line remains on
each line. When you create an asset from the merged line, the asset cost is the
total merged cost.
Oracle Assets creates journal entries for the asset cost account for the mass
addition into which the others were merged. Oracle Assets creates journal
entries for each asset clearing account. For example, you merge mass addition
#1 into mass addition #2, so Oracle Assets creates the following journal entries:
Oracle Assets creates no journal entries for deleted mass additions and does not
clear the asset clearing accounts credited by accounts payable. You clear the
accounts by either reversing the invoice in your payables system, or creating
manual journal entries in your general ledger.
Capitalization
When you capitalize CIP assets, Oracle Assets creates journal entries that
transfer the cost from the CIP cost account to the asset cost account. The
clearing account has already been cleared.
If you change the asset type from capitalized to CIP, Oracle Assets creates
journal entries to debit the CIP cost account and credit the asset clearing
account. Oracle Assets does not create capitalization or reverse capitalization
journal entries for CIP reverse transactions.
Oracle Assets - CHANGE TYPE FROM CAPITALIZED TO CIP (CURRENT PERIOD)
Example: You place an asset in service in Year 1, Quarter 1. The asset cost is
$4,000, the life is 4 years, and you are using straight-line depreciation. In Year
3, Quarter 3, you sell the asset for $2,000. The cost to remove the asset is
$500. The asset uses a retirement convention and depreciation method which
take depreciation in the period of retirement. You retire revaluation reserve in
this book.
If you enter the same account for each gain and loss account, Oracle Assets
creates a single journal entry for the net gain or loss as shown in the following
table:
Book Controls window:
Gain/Loss 600.00
Example: You place an asset in service in Year 1, Quarter 1. The asset cost is
$4,000, the life is 4 years, and you are using straight-line depreciation. In Year
3, Quarter 3, you discover that the asset was sold in Year 3, Quarter 1, for
$2,000. The removal cost was $500. The asset uses a retirement convention
and depreciation method which allow you to take depreciation in the period of
retirement.
Example: You discover that you retired the wrong asset. Oracle Assets creates
journal entries for the reinstatement to debit asset cost, credit accumulated
depreciation, and reverse the gain or loss you recognized for the retirement.
Oracle Assets reverses the journal entries for proceeds of sale, cost of removal,
net book value retired, and revaluation reserve retired. Oracle Assets also
reverses the journal entries you made to clear the proceeds of sale and cost of
removal.
Oracle Assets also creates journal entries to recover the depreciation not
charged to the asset and for the current period depreciation expense.
Example: You place an asset in service in Year 1, Quarter 1. The asset cost is
$4,000, the life is 4 years, and you are using straight-line depreciation. In Year
2, Quarter 1, you retire the asset. In Year 2, Quarter 4, you realize that you
retired the wrong asset so you reinstate it.
The following examples illustrate the effect on your assets and your accounts
when you specify different revaluation rules.
Example 1: You place an asset in service in Year 1, Quarter 1. The asset cost is
$10,000, the life is 5 years, and you are using straight-line depreciation.
In Year 2, Quarter 1 you revalue the asset using a revaluation rate of 5%. Then
in Year 4, Quarter 1 you revalue the asset again using a revaluation rate of
-10%.
Revaluation Rules:
Oracle Assets bases the new depreciation expense on the revalued remaining
net book value.
In Year 5, Quarter 4, at the end of the asset's life, you retire the asset with no
proceeds of sale or cost of removal.
The effects of the revaluations are illustrated in the following table:
Asset
Period (Yr, Qtr.) Deprn. Expense Accum. Deprn. Reval. Reserve
Cost
REVALUATION 1
Year 2, Quarter 1, 5% revaluation
Example 2: You place an asset in service in Year 1, Quarter 1. The asset cost is
$10,000, the life is 5 years, and you are using straight-line depreciation.
In Year 2, Quarter 1 you revalue the asset using a revaluation rate of 5%. Then
in Year 4, Quarter 1 you revalue the asset again using a revaluation rate of
-10%.
Revaluation Rules:
For the first revaluation, the asset's new revalued cost is $10,500. Since you do
not revalue the accumulated depreciation, Oracle Assets transfers the balance
to the revaluation reserve in addition to the change in cost.
Since you are also not amortizing the revaluation reserve, this amount remains
in the revaluation reserve account until you retire the asset, when Oracle Assets
transfers it to the appropriate revaluation reserve retired account. Oracle Assets
bases the new depreciation expense on the revalued net book value.
For the second revaluation, the asset's revalued cost is $9,450. Again, since you
do not revalue the accumulated depreciation, Oracle Assets transfers the
balance to the revaluation reserve along with the change in cost.
You retire the asset in Year 5, Quarter 4, with no proceeds of sale or cost of
removal.
The effects of the revaluations are illustrated in the following table:
Asset
Period (Yr, Qtr.) Deprn. Expense Accum. Deprn. Reval. Reserve
Cost
REVALUATION 1
5% revaluation in Year 2, Quarter 1:
REVALUATION 2
-10% revaluation in Year 4, Quarter 1:
Example 3: You place an asset in service in Year 1, Quarter 1. The asset cost is
$10,000, the life is 5 years, and you are using straight-line depreciation.
In Year 2, Quarter 1 you revalue the asset using a rate of 5%. Then in Year 4,
Quarter 1 you revalue the asset again using a rate of -10%.
Revaluation Rules:
For the first revaluation, the asset's new revalued cost is $10,500. Since you do
not revalue the accumulated depreciation, Oracle Assets transfers the entire
amount to the revaluation reserve. Since you are amortizing the revaluation
reserve, Oracle Assets calculates the revaluation amortization amount for each
period using the asset's depreciation method. Oracle Assets also bases the new
depreciation expense on the revalued net book value.
For the second revaluation, the asset's revalued cost is $9,450. Again, since you
do not revalue the accumulated depreciation, Oracle Assets transfers the entire
amount to the revaluation reserve.
The effects of the revaluations are illustrated in the following table:
Period Asset Deprn. Accum. Reval. Reval.
(Yr,Qtr.) Cost Expense Deprn. Amortize Reserve
REVALUATION 1
Year 2, quarter 1, 5% revaluation
REVALUATION 2
Year 4, quarter 1, -10% revaluation
Oracle Assets creates the following journal entries each period to amortize the
revaluation reserve:
Example 4: You place an asset in service in Year 1, Quarter 1. The asset cost is
$10,000, the life is 5 years, and you are using straight-line depreciation. The
asset's life extension factor is 2 and the maximum fully reserved revaluations
allowed for this book is 3.
In year 5, quarter 4 the asset is fully reserved. In Year 9, Quarter 1 you want to
revalue the asset with a revaluation rate of 5%.
Revaluation Rules:
First, Oracle Assets checks whether this fully reserved asset has been previously
revalued as fully reserved, and that the maximum number of times is not exceeded
by this revaluation. Since this asset has not been previously revalued as fully
reserved, this revaluation is allowed.
The asset's new revalued cost is $10,500. The life extension factor for this asset is
2, so the asset's new life is 2 * 5 years = 10 years. Oracle Assets calculates
depreciation expense over its new life of 10 years. Oracle Assets calculates the
depreciation adjustment of $2,000 using the new 10 year asset life. It transfers the
change in net book value to the revaluation reserve account.
Oracle Assets revalues the accumulated depreciation using the 5% revaluation rate.
The change in net book value is transferred to the revaluation reserve account.
Since you do not amortize the revaluation reserve, the amount remains in the
revaluation reserve account.
The effect of the revaluation is illustrated in the following table:
Asset
Period (Yr, Qtr.) Deprn. Expense Accum. Deprn. Reval. Reserve
Cost
Yr1 to Yr4
Example 5: You place an asset in service in Year 1, Quarter 1. The asset cost is
$10,000, the life is 5 years, and you are using straight-line depreciation. The
asset's life extension factor is 3.0 and its life extension ceiling is 2.
In Year 5, Quarter 4 the asset is fully reserved. In year 9, quarter 1 you want to
revalue the asset with a revaluation rate of 5%.
Revaluation Rules:
To determine the depreciation adjustment, Oracle Assets uses the smaller of the
life extension factor and the life extension ceiling. Since the life extension
ceiling is smaller than the life extension factor, Oracle Assets uses the ceiling to
calculate the depreciation adjustment. The new life used to calculate the
depreciation adjustment is 2 * 5 years = 10 years, the life extension ceiling of 2
multiplied by the original 5 year life of the asset.
Oracle Assets calculates the asset's depreciation expense under the new life of
10 years up to the revaluation period, and moves the difference between this
value and the existing accumulated depreciation from accumulated
depreciation to revaluation reserve.
Oracle Assets then determines the new asset cost using the revaluation rate of
5% and revalues the accumulated depreciation with the same rate. Oracle
Assets calculates the asset's new life by multiplying the current life by the life
extension factor. The asset's new life is 3 * 5 years = 15 years. Oracle Assets
bases the new depreciation expense on the revalued net book value and the
new 15 year life.
The effect of the revaluation is illustrated in the following table:
Asset
Period (Yr, Qtr.) Deprn. Expense Accum. Deprn. Reval. Reserve
Cost
Yr1 to Yr4
Yr10 to Yr15
Example 6: You own an asset which has been damaged during its life. You
placed the asset in service in Year 1, quarter 1. The asset cost is $10,000, the
life is 5 years, and you are using straight-line depreciation. You entered a
revaluation ceiling of $10,300 for the asset.
In year 3, quarter 3 you revalue the asset's category with a revaluation rate of
5%.
Revaluation Rules:
If Oracle Assets applied the new revaluation rate of 5%, the asset's new cost
would be higher than the revaluation ceiling for this asset, so instead Oracle
Assets uses the ceiling as the new cost. The ceiling creates the same effect as
revaluing the asset at a rate of 3%. Oracle Assets bases the asset's new
depreciation expense on the revalued asset cost.
The effect of the revaluation is illustrated in the following table:
Period (Yr, Asset Deprn. Accum.Dep Reval. Reval.
Qtr.) Cost Expense rn. Amortize Reserve
Yr1 to Yr 2
Oracle Assets creates the following journal entries each period to amortize the
revaluation reserve:
Ans) The fa is implemented at the business group level. Because for one
business group there will be one asset module. The Asset module for the
entire operating unit is same. But the Inventory org may different for the
operating unit.
Ans)
1. Capitalised Asset.
2. Cip asset.
3.expenced asset.
Ans)
You can set up as many calendars as you need. Each book you set up requires a
depreciation calendar and a prorate calendar. The depreciation calendar
determines the number of accounting periods in a fiscal year, and the prorate
calendar determines the number of prorate periods in your fiscal year. You can
use one calendar for multiple depreciation books, and as both the depreciation
and prorate calendar for a book.
Your corporate books can share the same calendar. A tax book can have a
different calendar than its associated corporate book. The calendar for a tax
book must use the same fiscal year name as the calendar for the associated tax
book.
The depreciation program uses the prorate calendar to determine the prorate
period which is used to choose the depreciation rate. The depreciation program
uses the depreciation calendar and divide depreciation flag to determine what
fraction of the annual depreciation expense to take each period. For example, if
you have a quarterly depreciation calendar, Oracle Assets calculates one-fourth
of the annual depreciation each time you run depreciation.
You must initially set up all calendar periods from the period corresponding to
the oldest date placed in service to the current period. You must set up at least
one period before the current period. At the end of each fiscal year, Oracle
Assets automatically sets up the periods for the next fiscal year.
Set up your Oldest Date Placed in Service. See: Specifying System Controls.
Suggestion: The name you enter appears in List of Values windows which allow
no more than 15 spaces. You may want to limit your name to 15 characters.
Choose Fiscal or Calendar to append either the fiscal or calendar year to get the
accounting period name. If you do not want the fiscal or calendar year
automatically appended, choose None.
For example, if your fiscal year runs from June 1 to May 31, and the current date
is July 15, 1995, you are in calendar 1995 and fiscal 1996. If you specify FISCAL,
your period name is JUL-96. If you specify CALENDAR, your period name is JUL-
95.
Enter the Fiscal Year Name you want to use for this calendar.
Enter the number of periods in the fiscal year for this calendar.
Note: You cannot enter more than 365 periods per year.
Query the calendar for which you want to change period names and scroll to the
last period.
From the Main menu, select Edit/Delete Record. Delete all of the periods you
plan to rename.
No comments:
Post a Comment
FOLLOWERS
DO NOT COPY
POPULAR POSTS
1) Can a flexfield qualifier be changed after it has been created? Ans) No. Once a
segment qualifier has been designated for a specif...
1. Explain about Accounts Payable. Ans) The Accounts Payable application component
records and manages accounting data for all v...
1. What is a Payment Process Request (PPR), and How Are PPRs Created and Managed?
What is a PPR? Ans) In R12, a Payment Process...
1. What are the different ways of adding assets in FA? Ans) You can use one of the
following processes to enter new assets: Quic...
1. Was the Include Tax check box replaced in the Release 12? The feature of having an
invoice amount inclusive of tax is very much a...
Define Bank: You can define a bank or a clearing house. Define Banks to record internal
banks, where you are the account holder of a rece...
R12 Uploading a Journal using Web ADI : Step by Step Overview: Web ADI brings Oracle
E-Business Suite functionality to the des...
BLOG ARCHIVE
2014 (2)
April (1)
March (1)
2013 (86)
September (1)
July (1)
June (6)
May (2)
April (2)
March (8)
February (24)
January (42)
FA To GL Reconciliation in R12
Base Tables In AP
2012 (22)
December (13)
November (9)