Key flexfields in FA.
There are three Key Flex Fields in Fixed Assets:
1. Category KFF.
2. Asset Location KFF.
3. Asset Key KFF.
I. Category Flex Field: Category Flex field is used to categorize the assets. It is mandatory flex field. We can define minimum 2 segments and Maximum up to 7 Segments. One is Major segment another one is Minor Segment.
II. Location Flex Field: It is mandatory flex field which is used to track assets are located in which place and to identify what are all assets located in a particular place. We cannot define new location structure, we can use standard one available. We can add up to 7 segments.
III. Asset key Flex Field: It is optional Flex field, which is used to group the Assets based on the Organization requirement. We cannot define new structure but we can add up to 10 segments. No FFQ to Asset Key Flex Field Segment.
1. Fiscal Calendar
2. Depreciation Calendar
1. Flat
2. Calculated
3. Production
4. Table
5. Formula
Straight line method: We will set a fixed amount for a fixed period as depreciation. For example: Asset cost 1 Lac, asset life 5 years, so depreciation per year 1 Lac / 5 = 20000
Diminution method: depreciation will be calculated on written down value of asset.
For example:
Year 1
Asset Addition.
Creation of assets information in the oracle Assets application is called Asset additions. There are 3 types of Asset additions.
1. Detailed Addition
2. Quick Addition
3. Mass addition
Difference between Detailed addition and Quick addition:
For detailed additions we have to navigate several windows to enter an asset. (Additions, Book and Assignments). Whereas through quick addition button asset information will be maintained by navigating single window only. Latter detailed information would be updated.
Detailed Addition. It is used to add a new asset with detailed information to the system. Through Detailed addition we can perform transaction such as retirement, adjustments and transfers.
Step 1: In Asset Workbench window, Click on "addition" button to create a new asset.
Step 2: Give mandatory info like Asset type, Asset Category, Description and units.
Step 3: Click on Continue, In books window, Select the corporate book and give mandatory info such as current cost, Salvage value, Depreciation Method, date in service and Prorate Conversion.
Step 4: In assignment Window, give employee Name, Expenses A/c and Location.
AP --> FA Mass additions interface tables --> FA
The data which is there in “FA Mass additions interface tables” we can see from FA application. If you want to convert the invoices information to Assets, we can add necessary data at interface tables, then the data will store in FA base tables.
Example: We purchased 5 plants at a time for Rs 5 Lacks and we received only one invoice for all the plants. We enter this invoice through Accounts payables. Now we are sending this information to FA through Mass Additions. Now we want that 5 plants information differently. So we will split that into 5 plants.
There are three Key Flex Fields in Fixed Assets:
1. Category KFF.
2. Asset Location KFF.
3. Asset Key KFF.
I. Category Flex Field: Category Flex field is used to categorize the assets. It is mandatory flex field. We can define minimum 2 segments and Maximum up to 7 Segments. One is Major segment another one is Minor Segment.
II. Location Flex Field: It is mandatory flex field which is used to track assets are located in which place and to identify what are all assets located in a particular place. We cannot define new location structure, we can use standard one available. We can add up to 7 segments.
III. Asset key Flex Field: It is optional Flex field, which is used to group the Assets based on the Organization requirement. We cannot define new structure but we can add up to 10 segments. No FFQ to Asset Key Flex Field Segment.
System Controls.
System Control form is used to specify your Company name,Asset numbering scheme, Key Flex field structures, Oldest date of asset placed in service as 01- Jan- 1850.
Calendars.
There are three types of calendars 1. Fiscal Calendar
2. Depreciation Calendar
3. Prorate convention Calendar
Fiscal Calendar: Based on the asset life we have to create Fiscal Calendar. For example 1976 to 2030.
Enter Name for your Fiscal year Specify the start and end dates of each fiscal year for a fiscal year name.
Create fiscal years from the oldest date placed in service through at least one fiscal year beyond the current fiscal year.
Depreciation will fail if the current fiscal year is the last fiscal year.
You can set up multiple fiscal years in this window.
You can assign different fiscal years to your different corporate books.
The calendar for a tax book must use the same fiscal year name as the calendar for the associated tax book.
Place cursor on from date and press ↓ down arrow
System will be creating fiscal years automatically.
Depreciation Calendar:
The Depreciation Calendar determines the number of accounting periods in a fiscal year. Depreciation calendar is used to calculate depreciation.
Prorate Calendar:
The Prorate Calendar determines the number of prorate periods in your fiscal year and to prorate the depreciation from which date to which date we have to consider.
Fiscal Calendar: Based on the asset life we have to create Fiscal Calendar. For example 1976 to 2030.
Enter Name for your Fiscal year Specify the start and end dates of each fiscal year for a fiscal year name.
Create fiscal years from the oldest date placed in service through at least one fiscal year beyond the current fiscal year.
Depreciation will fail if the current fiscal year is the last fiscal year.
You can set up multiple fiscal years in this window.
You can assign different fiscal years to your different corporate books.
The calendar for a tax book must use the same fiscal year name as the calendar for the associated tax book.
Place cursor on from date and press ↓ down arrow
System will be creating fiscal years automatically.
Depreciation Calendar:
The Depreciation Calendar determines the number of accounting periods in a fiscal year. Depreciation calendar is used to calculate depreciation.
Prorate Calendar:
The Prorate Calendar determines the number of prorate periods in your fiscal year and to prorate the depreciation from which date to which date we have to consider.
Depreciation Methods
Depreciation means gradual and permanent decrease in the value of the asset due to the usage of asset, loss or theft of an asset. There are five standard depreciation methods in Oracle.1. Flat
2. Calculated
3. Production
4. Table
5. Formula
Straight line method: We will set a fixed amount for a fixed period as depreciation. For example: Asset cost 1 Lac, asset life 5 years, so depreciation per year 1 Lac / 5 = 20000
Diminution method: depreciation will be calculated on written down value of asset.
For example:
Year 1
Asset value 500000
Depreciation 10% 50000
Balance 450000
Year 2
Depreciation 10% 50000
Balance 450000
Year 2
Depreciation 10% 45000
Balance 405000
Year 3
Balance 405000
Year 3
Depreciation 10% 40500
Balance 355000
Production Base: Depreciation will be calculated on the production units.
Balance 355000
Production Base: Depreciation will be calculated on the production units.
Asset Book
In Assets Module, Journals will be created based on the asset book. This Asset book will be associated with the particular Ledger. Asset book will determine the:
1. Calendar
2. Accounting Rules
3. Natural Accounts
Pre requisites to create Asset Book:
1. Specify System Controls
2. Define Calendars
3. Set up your Account segment values and combinations
4. Set up your journal entry formats.
In Fixed Assets we have three types of books:
1. Corporate Book
2. Tax Book
3. Budget Book
Corporate Book:
This is also called Depreciation book, Asset book and Asset Register. Corporate book is used to maintain the Asset information and to maintain Depreciation information. Depreciation information will be maintained as per Companies Act.
2. Accounting Rules
3. Natural Accounts
Pre requisites to create Asset Book:
1. Specify System Controls
2. Define Calendars
3. Set up your Account segment values and combinations
4. Set up your journal entry formats.
In Fixed Assets we have three types of books:
1. Corporate Book
2. Tax Book
3. Budget Book
Corporate Book:
This is also called Depreciation book, Asset book and Asset Register. Corporate book is used to maintain the Asset information and to maintain Depreciation information. Depreciation information will be maintained as per Companies Act.
Tax Book:
We will maintain the depreciation information as per Income tax Act. We will copy the Asset information from the corporate book to Tax book. We maintain companies Act and IT Act for depreciation, if the % of depreciation is different for companies act and IT act.
Budget book:
We will maintain capital Budget information. The Asset information also required in the tax book. It is an automatic activity. We will copy the asset information from the corporate book to the tax book. We have 2 options to copy the information:
1. Initial mass copy.
We will maintain the depreciation information as per Income tax Act. We will copy the Asset information from the corporate book to Tax book. We maintain companies Act and IT Act for depreciation, if the % of depreciation is different for companies act and IT act.
Budget book:
We will maintain capital Budget information. The Asset information also required in the tax book. It is an automatic activity. We will copy the asset information from the corporate book to the tax book. We have 2 options to copy the information:
1. Initial mass copy.
2. Periodic mass copy.
Asset Categories
Asset Category is used to group the Assets based on the Depreciation method and Rate, and also building a relationship with the Asset book. Category information is common for a group of assets. Oracle Assets defaults these depreciation rules when you add an asset, to help you add assets quickly. The default depreciation rules that you set up for a category also depend upon the date placed in service ranges you specify.
Pre requisites to set up Asset categories:
Set up Category Flex Field
Set up depreciation Book
Set up Category Flex Field
Set up depreciation Book
Setup Depreciation Calendar & Prorate Convention Calendar
Setup Depreciation Methods
Type of Assets
Assets are again 3 types as per Fixed Assets
1. Capitalized
2. CIP
3. Group Assets
Capitalized: Which Assets are ready to use and are ready to place in service.
CIP: Construction in process: An asset which is under construction, for example building under construction. CIP asset will changed to capitalized when it starts service.
Group Assets: Grouping the assets related to same group.
Setup Depreciation Methods
Type of Assets
Assets are again 3 types as per Fixed Assets
1. Capitalized
2. CIP
3. Group Assets
Capitalized: Which Assets are ready to use and are ready to place in service.
CIP: Construction in process: An asset which is under construction, for example building under construction. CIP asset will changed to capitalized when it starts service.
Group Assets: Grouping the assets related to same group.
Asset Addition.
1. Detailed Addition
2. Quick Addition
3. Mass addition
Difference between Detailed addition and Quick addition:
For detailed additions we have to navigate several windows to enter an asset. (Additions, Book and Assignments). Whereas through quick addition button asset information will be maintained by navigating single window only. Latter detailed information would be updated.
Detailed Addition. It is used to add a new asset with detailed information to the system. Through Detailed addition we can perform transaction such as retirement, adjustments and transfers.
Step 1: In Asset Workbench window, Click on "addition" button to create a new asset.
Step 2: Give mandatory info like Asset type, Asset Category, Description and units.
Step 3: Click on Continue, In books window, Select the corporate book and give mandatory info such as current cost, Salvage value, Depreciation Method, date in service and Prorate Conversion.
Step 4: In assignment Window, give employee Name, Expenses A/c and Location.
Mass Addition
Process of transferring fixed assets related data from Accounts Payables to Fixed Assets is called Mass additions. After transferring data from AP, data will store in interface tables.AP --> FA Mass additions interface tables --> FA
The data which is there in “FA Mass additions interface tables” we can see from FA application. If you want to convert the invoices information to Assets, we can add necessary data at interface tables, then the data will store in FA base tables.
Setup Step:
Step 1: Create Standard Invoice in Accounts Payables. Choose Account as “Asset clearing Account” in the distribution.
Step 2: Place curser on Account field --> Show Field and click on "Track as Asset".
Step 3: Transfer to invoice to General Ledger.
Step 4: Run Journal Import program from GL
Step 5: Run Mass Additions create in AP. This program will transfer AP data to FA.
Step 6: Prepare Mass additions in F.A.
Step 7: Run Post Mass additions program.
Step 8: Query the Asset in the Asset work bench.
Step: 1 Create a CIP Asset
Step: 2 Convert CIP Asset to Capitalize Asset.
Step: 3 Query the Asset and enter detailed information.
1. Employee
2. Expenses Account
3. Location Asset transfer can be done in 2 ways.
1. Individual Asset transfer.
2. Mass Asset transfer.
2. Life of the Asset
3. Depreciation Method and Rate
It can be done in 2 ways:
1. Individual Changes
2. Mass Changes
1. Individual Asset.
2. Mass Revaluation.
Step 1: Create Standard Invoice in Accounts Payables. Choose Account as “Asset clearing Account” in the distribution.
Step 2: Place curser on Account field --> Show Field and click on "Track as Asset".
Step 3: Transfer to invoice to General Ledger.
Step 4: Run Journal Import program from GL
Step 5: Run Mass Additions create in AP. This program will transfer AP data to FA.
Step 6: Prepare Mass additions in F.A.
Step 7: Run Post Mass additions program.
Step 8: Query the Asset in the Asset work bench.
Conversion of CIP to Capitalize asset.
Asset which is there under construction is called a CIP Asset. Simply we can say, the asset is not at used (i.e., not placed in service.)Step: 1 Create a CIP Asset
Step: 2 Convert CIP Asset to Capitalize Asset.
Step: 3 Query the Asset and enter detailed information.
Asset Transfer
Asset transfer refers to changes in the assignment of 1. Employee
2. Expenses Account
3. Location Asset transfer can be done in 2 ways.
1. Individual Asset transfer.
2. Mass Asset transfer.
Asset Changes
Asset Changes can be made to the Assets for the following fields: 1. Asset Cost 2. Life of the Asset
3. Depreciation Method and Rate
It can be done in 2 ways:
1. Individual Changes
2. Mass Changes
Asset Revaluation
Asset Revaluation is used to increase or decrease in the asset cost. Revaluation can be done in two ways.1. Individual Asset.
2. Mass Revaluation.
Asset Reclassification
Make changes for Asset Category is called Reclassification. In Oracle reclassification can be carried out only for Asset Category. It can be done in 2 ways.
1. Individual Asset reclassification
2. Mass Assets reclassification
2. Mass Assets reclassification
Retirement
For every asset there will be a useful life of period. Once this period completed every asset should me retired. Some other reasons for retirement: Sale of Asset, Theft, Life of asset and Damage of asset. Run depreciation before retirement of asset
Roll back depreciation
If we run the depreciation without period close, then we cannot make any modifications. Then if we want to do any modifications we have to do “Roll back depreciation”.
Split
Split is dividing the Assets into individual units of assets. Example: We purchased 5 plants at a time for Rs 5 Lacks and we received only one invoice for all the plants. We enter this invoice through Accounts payables. Now we are sending this information to FA through Mass Additions. Now we want that 5 plants information differently. So we will split that into 5 plants.
Merge
Merge is a process of adding multiple assets to a single Asset. Example: We have one asset like Computer. Now we are purchasing first monitor and then CPU.Now we are having 2 invoices in AP. Now this will be transfer to FA through Mass addition.These two invoices should be merged because they are single Asset.
it is very helpful for me.thanks alot..
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