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Oracle Fixed Assets Interview Questions inR12_11. What are the different ways of adding assets in FA?

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 themmanually. You can enter minimal information in the QuickAdditions window, and the remainingasset 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:

Assets that have a salvage value

Assets with more than one assignment

Assets with more than one source line

Assets to which the category default depreciation rules do not apply

Subcomponent assets

Leased assets and leasehold improvements

Mass Additions

Use the Mass Additions process to add assets automatically from an external source. Createassets from one or more invoice distribution lines in Oracle Payables, CIP asset lines in OracleProjects, asset information from another assets system, or information from any other feedersystem using the interface. You must prepare the mass additions to become assets before you

post them to Oracle Assets.

2. How do we depreciate Assets in Oracle Applications?

Ans) Run the depreciation program independently for each of your depreciation books. Thedepreciation program calculates depreciation expense and adjustments, and updates theaccumulated depreciation and year-to-date depreciation.

To run depreciation:

1. Open the Run Depreciation window.

2. Choose the Book for which you want 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 thedepreciation program for a corporate book, and the Tax Reserve Ledger report for a tax book, soyou can review the depreciation calculated.

4. Review the log files and report after the request completes.

3. What is the significance of asset books in FA? Types?Ans) You can define corporate, tax, and budget depreciation books. You must set up yourdepreciation books before you can add assets to them. You can set up multiple corporate booksthat create journal entries for different ledger, or to the same ledger. In either case, you must bothrun depreciation and create journal entries for each depreciation book. For each corporate book,you can set up multiple tax and budget books that are associated with it.

Prerequisites

Specify system controls. See: Specifying System Controls.

Define your calendars. See: Specifying Dates for Calendar Periods.

Set up your Account segment values and combinations. See: Defining Accounts.

Set up your journal entry formats. See: Defining Journal Sources and Defining JournalCategories.

To define a depreciation book:

1. Open the Book Controls window.

2. Enter the name of the book you want to define.

The book name cannot contain any special characters.

Suggestion: The name you enter appears in List of Values windows which allow no more than15 spaces. You may want to limit the book name to 15 characters.

3. Enter a brief, unique description of the book.

4. Choose a Corporate, Tax, or Budget book class.

5. Enter calendar information for your book.

6. Enter accounting rules for your book.

7. Enter natural accounts for your book.

8. Enter tax rules for your book.

9. Save your work.

4. What is meant by retire asset? How do we retire assets in Oracle applications?

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.

Full and Partial Retirements by Units or Cost

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 costretired



When you retire an asset by cost, the units remain unchanged and the cost retired is spreadevenly among all assignment lines

Restrictions

You cannot retire assets by units in your tax books; you can only perform partial and full costretirements 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 thecalculate gains and losses program between transactions.Gain/Loss = Proceeds of Sale - Cost of Removal - Net Book Value Retired + RevaluationReserve Retired If you partially retire a units of production asset, you must manually adjust the capacity to reflectthe portion retired.

Full Retirement for a Group of Assets (Mass Retirement)

Use the Mass Retirements window to retire a group of assets at one time. You specify selectioncriteria, including asset category, asset key, location, depreciation expense account segments,employee, asset number range, and date placed in service range, to select the assets you want to

retire. You can also elect to automatically retire subcomponents along with the parent asset.When you define a mass retirement, you can choose to immediately submit the concurrentrequest to retire the selected assets, or you can save the mass retirement definition for futuresubmission. You can change the details of any mass retirement before you submit the concurrentrequest.When you submit a mass retirement, Oracle Assets automatically runs the Mass RetirementsReport and the Mass Retirements Exception Report. You can review these reports, perform amass reinstatement, or adjust an individual retirement transaction if necessary.If you wish to simultaneously run this program in more than one process to reduce processingtime, Oracle Assets can be set up to run this program in parallel. For more information on settingup parallel processing and the FA: Number of Parallel Requests profile option.

Exceptions

Oracle Assets does not retire the following types of assets, even if they are selected as part of amass 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 retirementselection criteria

For reinstatements, assets retired during a prior fiscal year

Independence Across Depreciation Books

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 Copyto copy retirements to the other books in the Book Controls window.

Retirement and Reinstatement Statuses

Each retirement transaction has a status. A new retirement receives the status PENDING. Afteryou run depreciation or calculate gains and losses, the status changes to PROCESSED.When you reinstate a PENDING retirement, Oracle Assets deletes the retirement transaction andthe asset is immediately reinstated. If you reinstate a PROCESSED retirement, Oracle Assetschanges the status to REINSTATE, and you must rerun the Calculate Gains and Losses programor run depreciation to process the reinstatement.When you perform a mass retirement, Oracle Assets creates PENDING retirement transactions.



Addition Journal

Current and Prior Period Addition

You purchase and place the asset into service in Year 1, Quarter 1.Payables System

Account Description Debit Credit

Asset Clearing 4,000.00

Accounts Payable Liability 4,000.00

Oracle Assets - CURRENT PERIOD ADDITION


Asset Cost 4,000.00

Depreciation Expense 250.00


Accumulated Depreciaiton 250.00

You place an asset in service in Year 1, Quarter 1, but you do not enter it into Oracle Assets untilYear 2, Quarter 2. Your payables system creates the same journal entries to asset clearing andaccounts payable liability as for a current period addition.Oracle Assets - PRIOR PERIOD ADDITION


Asset Cost 4,000.00


Depreciation Expense (Adjustment) 1,250.00


Accumulated Depreciaiton 1,500.00

Merge Mass Additions

When you merge two mass additions, Oracle Assets adds the asset cost of the mass addition thatyou are merging to the asset account of the mass addition you are merging into. Oracle Assetsrecords the merge when you perform the transaction. Oracle Assets does not change the assetclearing account journal entries it creates for each line, so each of the appropriate clearingaccounts clears separately.As an audit trail after the merge, the original cost of the invoice line remains on each line. Whenyou 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 whichthe others were merged. Oracle Assets creates journal entries for each asset clearing account. Forexample, you merge mass addition #1 into mass addition #2, so Oracle Assets creates thefollowing journal entries:


Asset Cost (mass addition #2 asset cost account) 4,000.00

Depreciation Expense 1,500.00



Asset Clearing (mass addition #1 accounts payable clearing account) 3,000.00

Asset Clearing (mass addition #2 accounts payable clearing account) 1,000.00

Accumulated Depreciaiton 1,500.00

Construction-In-Process (CIP) Addition

You add a CIP asset. (CIP assets do not depreciate)Oracle Assets


CIP Cost 4,000.00

CIP Clearing 4,000.00

Deleted Mass Additions

Oracle Assets creates no journal entries for deleted mass additions and does not clear the assetclearing accounts credited by accounts payable. You clear the accounts by either reversing theinvoice 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 fromthe CIP cost account to the asset cost account. The clearing account has already been cleared.


Asset Cost 4,000.00


CIP Cost 4,000.00

Accumulated Depreciation 250.00

Asset Type Adjustments

If you change the asset type from capitalized to CIP, Oracle Assets creates journal entries todebit the CIP cost account and credit the asset clearing account. Oracle Assets does not createcapitalization or reverse capitalization journal entries for CIP reverse transactions.Oracle Assets - CHANGE TYPE FROM CAPITALIZED TO CIP (CURRENT PERIOD)


CIP Cost 4,000.00


Retirement Journals

Current Period Retirements

Example: You place an asset in service in Year 1, Quarter 1. The asset cost is $4,000, the life is4 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 anddepreciation method which take depreciation in the period of retirement. You retire revaluationreserve in this book.


Accounts Receivable 2,000.00



Proceeds of Sales Clearing 2,000.00


Cost of Removal Clearing 500.00

Accounts Payable 500.00


Accumulated Depreciation 2,500.00

Proceeds of Sale Clearing 2,000.00

Cost of Removal Gain 500.00

Revaluation Reserve 600.00

Net Book Value Retired Gain 1,500.00

Asset Cost 4,000.00

Proceeds of Sale Gain 2,000.00


Revaluation Reserve Retired Gain 600.00

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:

Accounts Gain Loss

Proceeds of Sale 1000 1000Cost of Removal 1000 1000

Net Book Value Retired 1000 1000

Revaluation Reserve Retired 1000 1000




Revaluation Reserve 600.00Asset Cost 4,000.00


Gain/Loss 600.00

Prior Period Retirement



Example: You place an asset in service in Year 1, Quarter 1. The asset cost is $4,000, the life is4 years, and you are using straight-line depreciation. In Year 3, Quarter 3, you discover that theasset was sold in Year 3, Quarter 1, for $2,000. The removal cost was $500. The asset uses aretirement convention and depreciation method which allow you to take depreciation in the

period of retirement.

Account Description Debit Credit Accounts Receivable 2,000.00




Accounts Payable 500.00

Account Description Debit Credit Accumulated Depreciation 2,500.00


Cost of Removal Loss 500.00

Net Book Value Retired Loss 1,750.00

Proceeds of Sale Loss 2,000.00


Asset Cost 4,000.00

Depreciation Expense 250.00Current Period Reinstatement

Example: You discover that you retired the wrong asset. Oracle Assets creates journal entriesfor the reinstatement to debit asset cost, credit accumulated depreciation, and reverse the gain orloss you recognized for the retirement. Oracle Assets reverses the journal entries for proceeds ofsale, cost of removal, net book value retired, and revaluation reserve retired. Oracle Assets alsoreverses 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 andfor the current period depreciation expense.


Asset Cost 4,000.00Cost of Removal Clearing 500.00

Gain / Loss 600.00







Prior Period Reinstatement

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. InYear 2, Quarter 4, you realize that you retired the wrong asset so you reinstate it.


Asset Cost 4,000.00


Proceeds of Sale Loss 2,000.00


Depreciation Expense (adjustment) 500.00

Net Book Value Retired Loss 2,750.00Cost of Removal Loss 500.00



Journal Entries for Depreciation: When you run depreciation, Oracle Assets creates journal entries for your accumulateddepreciation accounts and your depreciation expense accounts. Oracle Assets creates journalentries for your bonus reserve accounts and your bonus depreciation accounts, if any. Oracle

Assets creates separate journal entries for current period depreciation expense and foradjustments to depreciation expense for prior period transactions and changes to financialinformation.Oracle Assets creates the following journal entries for a current period depreciation charge of$200 and a bonus charge of $50:



Bonus Expense 50.00


Bonus Reserve 50.00

Journal Entries for Revaluation:

The following examples illustrate the effect on your assets and your accounts when you specifydifferent revaluation rules.



Revalue Accumulated Depreciation

Example 1: You place an asset in service in Year 1, Quarter 1. The asset cost is $10,000, the lifeis 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:

Revalue Accumulated Depreciation = Yes

Amortize Revaluation Reserve = No

Retire Revaluation Reserve = No

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 orcost of removal.The effects of the revaluations are illustrated in the following table:

Period (Yr, Qtr.) Asset Cost Deprn. Expense Accum. Deprn. Reval. Reserve

Yr1,Q1 10,000.00 500.00 500.00 0.00

Yr1,Q2 10,000.00 500.00 1,000.00 0.00Yr1,Q3 10,000.00 500.00 1,500.00 0.00

Yr1,Q4 10,000.00 500.00 2,000.00 0.00

Reval. 1 5% 10,500.00 0.00 *2,100.00 **400.00

Yr2,Q1 10,500.00 525.00 2,625.00 400.00

Yr2,Q2 10,500.00 525.00 3,150.00 400.00

Yr2,Q3 10,500.00 525.00 3,675.00 400.00

Yr2,Q4 10,500.00 525.00 4,200.00 400.00

Yr3,Q1 10,500.00 525.00 4,725.00 400.00Yr3,Q2 10,500.00 525.00 5,250.00 400.00

Yr3,Q3 10,500.00 525.00 5,775.00 400.00

Yr3,Q4 10,500.00 525.00 6,300.00 400.00

Reval. 2 -10% 9,450.00 0.00 *5,670.00 **-20.00

Yr4,Q1 9,450.00 472.50 6,142.50 -20.00

Yr4,Q2 9,450.00 472.50 6,615.00 -20.00

Yr4,Q3 9,450.00 472.50 7,087.50 -20.00

Yr4,Q4 9,450.00 472.50 7,560.00 -20.00

Yr5,Q1 9,450.00 472.50 8,032.50 -20.00

Yr5,Q2 9,450.00 472.50 8,505.00 -20.00

Yr5,Q3 9,450.00 472.50 8,977.50 -20.00

Yr5,Q4 9,450.00 472.50 9,450.00 -20.00



Retire 0.00 0.00 0.00 -20.00

Fixed Assets Interview Questions in R12 _2REVALUATION 1 Year 2, Quarter 1, 5% revaluation

*Accumulated Depreciation = Existing Accumulated Depreciation + [Existing AccumulatedDepreciation x (Revaluation Rate / 100)]

2,000 + [2,000 X (5/100)] = 2,100

**Revaluation Reserve = Existing Revaluation Reserve + Change in Net Book Value

0 + (8,400 - 8,000) = 400


Asset Cost 500.00



REVALUATION 2 -10% revaluation in Year 4, Quarter 1:




Asset Cost 1,050.00

Retirement in Year 5, Quarter 4:



Asset Cost 9,450.00

Accumulated Depreciation Not Revalued

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:

Revalue Accumulated Depreciation = No


Retire Revaluation Reserve = Yes



For the first revaluation, the asset's new revalued cost is $10,500. Since you do not revalue theaccumulated depreciation, Oracle Assets transfers the balance to the revaluation reserve inaddition to the change in cost.Since you are also not amortizing the revaluation reserve, this amount remains in the revaluationreserve 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 therevalued net book value.For the second revaluation, the asset's revalued cost is $9,450. Again, since you do not revaluethe accumulated depreciation, Oracle Assets transfers the balance to the revaluation reservealong 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:


Yr1,Q1 10,000.00 500.00 500.00 0.00

Yr1,Q2 10,000.00 500.00 1,000.00 0.00

Yr1,Q3 10,000.00 500.00 1,500.00 0.00Yr1,Q4 10,000.00 500.00 2,000.00 0.00

Reval. 1 5% 10,500.00 0.00 0.00 *2,500.00

Yr2,Q1 10,500.00 **656.25 6,56.25 2,500.00

Yr2,Q2 10,500.00 656.25 1,312.50 2,500.00

Yr2,Q3 10,500.00 656.25 1,968.75 2,500.00

Yr2,Q4 10,500.00 656.25 2,625.00 2,500.00

Yr3,Q1 10,500.00 656.25 3,281.25 2,500.00

Yr3,Q2 10,500.00 656.25 3,937.50 2,500.00

Yr3,Q3 10,500.00 656.25 4,593.75 2,500.00

Yr3,Q4 10,500.00 656.25 5,250.00 2,500.00

Reval. 2 -10% 9,450.00 0.00 0.00 *6,700.00

Yr4,Q1 9,450.00 **1,181.25 1,181.25 6,700.00

Yr4,Q2 9,450.00 1,181.25 2,362.50 6,700.00

Yr4,Q3 9,450.00 1,181.25 3,543.75 6,700.00

Yr4,Q4 9,450.00 1,181.25 4,725.00 6,700.00Yr5,Q1 9,450.00 1,181.25 5,906.25 6,700.00

Yr5,Q2 9,450.00 1,181.25 7,087.50 6,700.00

Yr5,Q3 9,450.00 1,181.25 8,268.75 6,700.00

Yr5,Q4 9,450.00 1,181.25 9,450.00 6,700.00



REVALUATION 15% revaluation in Year 2, Quarter 1:


Asset Cost 500.00

Accumulated Depreciation 2,000.00Revaluation Reserve 2,500.00

REVALUATION 2-10% revaluation in Year 4, Quarter 1:



Asset Cost 1,050.00

Revaluation Reserve 4,200.00

Retirement in Year 5, Quarter 4:




Revaluation Reserve Retired Gain 6,700.00

Asset Cost 9,450.00

Amortizing Revaluation Reserve

Example 3: You place an asset in service in Year 1, Quarter 1. The asset cost is $10,000, the lifeis 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 yourevalue the asset again using a rate of -10%.Revaluation Rules:


Amortize Revaluation Reserve = Yes

For the first revaluation, the asset's new revalued cost is $10,500. Since you do not revalue theaccumulated depreciation, Oracle Assets transfers the entire amount to the revaluation reserve.Since you are amortizing the revaluation reserve, Oracle Assets calculates the revaluationamortization 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 revaluationreserve.The effects of the revaluations are illustrated in the following table:

Period(Yr,Qtr.)

AssetCost

Deprn.Expense

Accum.Deprn.

Reval.Amortize

Reval.Reserve

Yr1,Q1 10,000.00 500.00 500.00 0.00 0.00

Yr1,Q2 10,000.00 500.00 1,000.00 0.00 0.00



Yr1,Q3 10,000.00 500.00 1,500.00 0.00 0.00

Yr1,Q4 10,000.00 500.00 2,000.00 0.00 0.00

Reval. 1 5% 10,500.00 0.00 0.00 0.00 *2,500.00

Yr2,Q1 10,500.00 **656.25 656.25 ***156.25 2,343.75

Yr2,Q2 10,500.00 656.25 1,312.50 156.25 2,187.50

Yr2,Q3 10,500.00 656.25 1,968.75 156.25 2,031.25

Yr2,Q4 10,500.00 656.25 2,625.00 156.25 1,875.00

Yr3,Q1 10,500.00 656.25 3,281.25 156.25 1,718.75

Yr3,Q2 10,500.00 656.25 3,937.50 156.25 1,562.50

Yr3,Q3 10,500.00 656.25 4,593.75 156.25 1,406.25

Yr3,Q4 10,500.00 656.25 5,250.00 156.25 1,250.00

Reval. 2 -10% 9,450.00 0.00 0.00 0.00 *5,450.00 Yr4,Q1 9,450.00 **1,181.25 1,181.25 ***681.25 4,768.75

Yr4,Q2 9,450.00 1,181.25 2,362.50 681.25 4,087.50

Yr4,Q3 9,450.00 1,181.25 3,543.75 681.25 3,406.25

Yr4,Q4 9,450.00 1,181.25 4,725.00 681.25 2,725.00

Yr5,Q1 9,450.00 1,181.25 5,906.25 681.25 2,043.75

Yr5,Q2 9,450.00 1,181.25 7,087.50 681.25 1,362.50

Yr5,Q3 9,450.00 1,181.25 8,268.75 681.25 681.25

Yr5,Q4 9,450.00 1,181.25 9,450.00 681.25 0.00REVALUATION 1 Year 2, quarter 1, 5% revaluation


Asset Cost 500.00



Oracle Assets creates the following journal entries each period to amortize the revaluationreserve:



Revaluation Amortization 158.25

REVALUATION 2 Year 4, quarter 1, -10% revaluation





Asset Cost 1,050.00





Revaluation Amortization 681.25

Revaluation of a Fully Reserved Asset

Example 4: You place an asset in service in Year 1, Quarter 1. The asset cost is $10,000, the lifeis 5 years, and you are using straight-line depreciation. The asset's life extension factor is 2 andthe 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 asfully reserved, and that the maximum number of times is not exceeded by this revaluation. Sincethis 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 theasset's new life is 2 * 5 years = 10 years. Oracle Assets calculates depreciation expense over itsnew life of 10 years. Oracle Assets calculates the depreciation adjustment of $2,000 using thenew 10 year asset life. It transfers the change in net book value to the revaluation reserveaccount.Oracle Assets revalues the accumulated depreciation using the 5% revaluation rate. The changein net book value is transferred to the revaluation reserve account. Since you do not amortize therevaluation reserve, the amount remains in the revaluation reserve account.The effect of the revaluation is illustrated in the following table:


Yr1 to Yr4

Yr5,Q1 10,000.00 500.00 8,500.00 0.00

Yr5,Q2 10,000.00 500.00 9,000.00 0.00

Yr5,Q3 10,000.00 500.00 9,500.00 0.00

Yr5,Q4 10,000.00 500.00 10,000.00 0.00

Reval. 5% 10,500.00 0.00 *8,400.00 **2,100.00

Yr9,Q1 10,500.00 ***262.50 8,662.50 2,100.00

Yr9,Q2 10,500.00 262.50 8,925.00 2,100.00

Yr9,Q3 10,500.00 262.50 9,187.50 2,100.00



Yr9,Q4 10,500.00 262.50 9,450.00 2,100.00

Yr10,Q1 10,500.00 262.50 9,712.50 2,100.00

Yr10,Q2 10,500.00 262.50 9,975.00 2,100.00

Yr10,Q3 10,500.00 262.50 10,237.50 2,100.00

Yr10,Q4 10,500.00 262.50 10,500.00 2,100.00


Asset Cost 500.00



Revaluation with Life Extension Ceiling

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 andits 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 assetwith a revaluation rate of 5%.Revaluation Rules:



To determine the depreciation adjustment, Oracle Assets uses the smaller of the life extensionfactor and the life extension ceiling. Since the life extension ceiling is smaller than the lifeextension factor, Oracle Assets uses the ceiling to calculate the depreciation adjustment. The newlife 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 therevaluation period, and moves the difference between this value and the existing accumulateddepreciation from accumulated depreciation to revaluation reserve.Oracle Assets then determines the new asset cost using the revaluation rate of 5% and revaluesthe accumulated depreciation with the same rate. Oracle Assets calculates the asset's new life bymultiplying the current life by the life extension factor. The asset's new life is 3 * 5 years = 15years. Oracle Assets bases the new depreciation expense on the revalued net book value and thenew 15 year life.The effect of the revaluation is illustrated in the following table:


Yr1 to Yr4

Yr5,Q1 10,000.00 500.00 8500.00 0.00

Yr5,Q2 10,000.00 500.00 9000.00 0.00

Yr5,Q3 10,000.00 500.00 9,500.00 0.00

Yr5,Q4 10,000.00 500.00 10,000.00 0.00



Reval. 5% 10,500.00 0.00 *8,400.00 **2,100.00

Yr9,Q1 10,500.00 ***75.00 8,475.00 2,100.00

Yr9,Q2 10,500.00 75.00 8,550.00 2,100.00

Yr9,Q3 10,500.00 75.00 8,625.00 2,100.00

Yr9,Q4 10,500.00 75.00 8,700.00 2,100.00

Yr10 to Yr15

Depreciation Adjustment (calculated using life extension ceiling )= 2,000


Asset Cost 500.00



Revaluation with a Revaluation Ceiling

Example 6: You own an asset which has been damaged during its life. You placed the asset inservice in Year 1, quarter 1. The asset cost is $10,000, the life is 5 years, and you are usingstraight-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:


Amortize Revaluation Reserve = Yes

If Oracle Assets applied the new revaluation rate of 5%, the asset's new cost would be higherthan the revaluation ceiling for this asset, so instead Oracle Assets uses the ceiling as the newcost. 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,Qtr.)

AssetCost

Deprn.Expense Accum.Deprn. Reval.

Amortize Reval.Reserve

Yr1 to Yr 2

Yr3,Q1 10,000.00 500.00 4,500.00 0.00 0.00

Yr3,Q2 10,000.00 500.00 5,000.00 0.00 0.00

Reval. *3% 10,300.00 0.00 0.00 0.00 **5,300.00

Yr3,Q3 10,300.00 ***1,030.00 1,030.00 ****530.00 4,770.00

Yr3,Q4 10,300.00 1,030.00 2,060.00 530.00 4,240.00Yr4,Q1 10,300.00 1,030.00 3,090.00 530.00 3,710.00

Yr4,Q2 10,300.00 1,030.00 4,120.00 530.00 3,180.00

Yr4,Q3 10,300.00 1,030.00 5,150.00 530.00 2,650.00

Yr4,Q4 10,300.00 1,030.00 6,180.00 530.00 2,120.00



Yr5,Q1 10,300.00 1,030.00 7,210.00 530.00 1,590.00

Yr5,Q2 10,300.00 1,030.00 8,240.00 530.00 1,060.00

Yr5,Q3 10,300.00 1,030.00 9,270.00 530.00 530.00

Yr5,Q4 10,300.00 1,030.00 10,300.00 530.00 0.00


Asset Cost 300.00





Revaluation Reserve 530.00Revaluation Amortization 530.00

6.At what level FA is implemented?

Ans) The fa is implemented at the business group level. Because for one business group therewill be one asset module. The Asset module for the entire operating unit is same. But theInventory org may different for the operating unit.

7.What is the profile used to secure asset register?

Ans) Information Standard 44 (IS44) – Information custodianship, requires agencies to establishand maintain an information asset register. An information asset register lists the existinginformation assets across all of the business units within an organisation. It enables users ofinformation to identify the available information resources from a single source and providesinformation custodians with an overview of the information assets under their care. Aninformation asset register ensures that agency information is identified, defined and organised ina way that will facilitate access to and reuse of this information. A register will assist to avoidany unnecessary duplication of information

8.What are the asset types in FA Module?

Ans)

1. Capitalised Asset. 2. Cip asset.

3.expenced asset.

9.What are the different calendars used in FA Module?

Ans)You can set up as many calendars as you need. Each book you set up requires a depreciationcalendar 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 inyour fiscal year. You can use one calendar for multiple depreciation books, and as both thedepreciation and prorate calendar for a book.Your corporate books can share the same calendar. A tax book can have a different calendar thanits 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 usedto choose the depreciation rate. The depreciation program uses the depreciation calendar anddivide depreciation flag to determine what fraction of the annual depreciation expense to takeeach period. For example, if you have a quarterly depreciation calendar, Oracle Assets calculatesone-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 thenext fiscal year.

Attention: If you use this depreciation calendar in a depreciation book from which you create

journal entries for your general ledger, you must make the period names identical to the periodsyou have set up in your general ledger.

You can define your calendar however you want. For example, to define a 4-4-5 calendar, set upyour fiscal years, depreciation calendar, and prorate calendar with different start and end dates,and fill in the uneven periods. To divide annual depreciation proportionately according to thenumber of days in each period, enter By Days in the Divide Depreciation field in the BookControls window.Prerequisites

Set up your Oldest Date Placed in Service. See: Specifying System Controls.

Set up your fiscal years. See: Creating Fiscal Years.

To specify dates for calendar periods:

1. Open the Asset Calendars window.

2. Enter the name of your Calendar.

Suggestion: The name you enter appears in List of Values windows which allow no more than 15spaces. You may want to limit your name to 15 characters.

3. Choose Fiscal or Calendar to append either the fiscal or calendar year to get theaccounting period name. If you do not want the fiscal or calendar year automaticallyappended, choose None.For example, if your fiscal year runs from June 1 to May 31, and the current date is July15, 1995, you are in calendar 1995 and fiscal 1996. If you specify FISCAL, your periodname is JUL-96. If you specify CALENDAR, your period name is JUL-95.

4.Enter the Fiscal Year Name you want to use for this calendar.

5. Enter the number of periods in the fiscal year for this calendar.

Note: You cannot enter more than 365 periods per year.

6. Enter the Name of this period.If your periods include the year, such as JAN-1995, and you are using the hyphen (-) asthe suffix delimiter, you must use either a two or four-digit year suffix. Oracle Assetsautomatically adds a four-digit year to the end of the period name if you do not enter ayear. Otherwise, you can enter a two-digit year suffix.



If you use this depreciation calendar in a depreciation book from which you create journal entries for your general ledger, you must make the period names identical to the periods you have set up in your general ledger.

7. Enter the start and end dates of this period.

8. Save your work.

To change period names for future periods:

Note: Use this procedure if you have already created periods, but need to change them tocorrespond with GL periods. You can only change the names of future period names.

1. Open the Asset Calendars window.

2. Query the calendar for which you want to change period names and scroll to thelast period.

3. From the Main menu, select Edit/Delete Record. Delete all of the periods you plan to rename.

4. Reenter the deleted periods with the correct name.

FA To GL Reconciliation in R12

FA To GL Reconciliation:

You can use reports to reconcile journal entries to your general ledger accounts. Thissection illustrates the relationships among Oracle Assets accounting reports.You can use reports to reconcile journal entries to your general ledger accounts. Thefollowing sections illustrate the relationships among Oracle Assets accounting reports:• Reconciling Journal Entries to General Ledger Accounts, • Reconciling Asset Cost Accounts • Reconciling CIP Cost Accounts • Reconciling Reserve Accounts • Reconciling Depreciation Ex pense Accounts• Tracking and Reconciling Mass Additions

Reconciling Journal Entries to General Ledger Accounts

Use the Unposted Journals Report in Oracle General Ledger, to match GL batch totalswith the asset batch totals found in the Subledger Accounting Account Analysis report.Related TopicsUnposted Journals Report, Oracle General LedgerAccount Analysis Report

Reconciling Asset Cost Accounts

Steps to reconcile asset cost accounts:

1. In Oracle General Ledger, match the ending balances in the Detail Trial Balance report withthe ending balances in the ledger Subledger Accounting AccountAnalysis report.2. Match the general ledger ending balances with those of the Cost Summary Report.3. Match the ending balances of the Cost Summary Report with those of the Cost Detail Report.Match the individual source amounts of the Cost Detail Report to the detail reports in the next



steps.4. Match additions to cost in the Asset Additions report.5. Match adjustments to net change in the Cost Adjustment Report.6. Match retirements to cost retired in the Asset Retirements Report.7. Match reclasses to cost in the Asset Reclassification Reconciliation Report.

8. Match transfers to cost in the Asset Transfer Reconciliation Report.

Reconciling CIP Cost Accounts

Steps to reconcile CIP cost accounts:1. In Oracle General Ledger, match the ending balances in the Detail Trial Balance Report with theending balances in the Subledger Accounting Account Analysis report..2. Match the general ledger ending balances with those of the CIP Summary Report.3. Match the ending balances of the CIP Summary Report with those of the CIP Detail Report.Match the individual source amounts of the CIP Detail Report to the detail reports in the next steps.4. Match additions to CIP cost in the Asset Additions report.5. Match adjustments to CIP net change in the Cost Adjustment Report.6. Match retirements to CIP cost retired in the Asset Retirements Report.7. Match capitalized to CIP cost in the CIP Capitalization Report.8. Match reclasses to CIP cost in the Asset Reclassification Reconciliation Report.9. Match transfers to CIP cost in the Asset Transfer Reconciliation Report.

10. Match ending balances to CIP cost in the CIP Asset Report.

Reconciling Reserve Accounts

Steps to reconcile reserve accounts:

1. In Oracle General Ledger, match the ending balances in the Detail Trial BalanceReport with the endingbalances in the Subledger Accounting Account Analysis Report.2. Match the general ledger ending balances with those of the Reserve Summary Report.3. Match the ending balances of the Reserve Summary Report with those of the Reserve Detail Report.Match the individual source amounts of the Reserve Detail Report to the detail reports in the next steps.4. Match additions to accumulated depreciation in the Asset Additions report.5. Match adjustments to reserve adjustment in the Reserve Adjustments Report.6. Match retirements to cost retired and NBV retired in the Asset Retirements Report.7. Match reclasses to accumulated depreciation in the Asset Reclassification Reconciliation Report.8. Match depreciation to depreciation amounts in the Account Reconciliation Reserve Ledger report.

9. Match transfers to accumulated depreciation in the Asset Transfer Reconciliation Report.

Reconciling Depreciation Expense Accounts

In Oracle General Ledger, use the Detail Trial Balance Report to match with the ending balances for theSubledger Accounting Account Analysis Report.



Use the Journal Entry Reserve Ledger report to match the depreciation balances with the ending GL

depreciation balances.

Tracking and Reconciling Mass Additions

You can use reports to track your mass additions from the time you bring them over from your accountspayable system to the time you post them into Oracle Assets:

Steps to reconcile Mass Additions:

1. Match asset journal amounts found in your general ledger with those in the Cost ClearingReconciliation Report Oracle Assets automatically makes these journal entries for your general ledger.2. Match amounts in the Cost Clearing Reconciliation Report with those in the Mass Additions Posting

Report. Adjusting journal entries are necessary for account transfers and cost adjustments to postedinvoice lines.

3. Match amounts in Mass Additions Posting Report with those of the Mass Additions Invoice MergeReport, Mass Additions Invoice Split Report, Unposted Mass Additions Report and Mass AdditionsDelete Report. Oracle Assets posts mass additions with a status of post. You can also match amounts inthe Mass Additions Posting Report with those in Additions by Source Report and Cost Adjustments BySource Report. The Asset Additions Report includes posted mass additions as well as manual assetadditions.

4. Match amounts in the Mass Additions Invoice Merge Report, Mass Additions Invoice Split Report,Unposted Mass Additions Report and Mass Additions Delete Report with amounts in the Mass AdditionsCreate Report. Split, merge, delete, place on hold, or prepare for posting invoice line items brought over

from accounts payable.

Use the Cost Clearing Reconciliation Report to match additions with those found in theAdditions By Source Report.Use the Cost Clearing Reconciliation Report to match adjustments with those found in the CostAdjustment By Source Report.

Mass Additions Create FAQ's R12

Mass Additions Create FAQ's:

1. How often can you run Mass Additions Create during an open period?

A: You can run Mass Additions Create as often as you like during an open period. You shouldrun the create program regularly so that you do not have an excessive number of invoicedistributions to review at one time.



2. What data is transferred when an invoice line becomes a mass addition line?

A: There is confusion over the actual data that is sent from the invoice line into the mass additionline.Here is a quick guide to the important fields that exist on the Prepare Mass Additions formand what they represent:

Invoice Number - This defaults from the invoice header.Line Number - This defaults from the invoice distribution line number.Queue - All Mass Additions from AP come in on the NEW queue.Description - This corresponds to the invoice line distribution description. One mass additionline is created per invoice distribution.Units - If the invoice is not matched to a purchase order then mass addition lines will be createdwith a default of one unit.Cost - This will match the invoice line distribution amount.Category - This will ONLY be populated if the item on your invoice line is defined in OracleInventory with a default category. Normally this field is NULL.Supplier Name and Number - These default from the invoice header.

PO Number - This will be populated if the invoice is matched to an Purchase Order.Source Batch - This will be populated if you entered a Batch Name when as a Parameter whenrunning the Payables Transfer to GL.Project Number - This will contain the Project Number if the line came from Oracle Projects.Task Number - Oracle Projects field.Create Batch - This number represents the concurrent request id of the Create Mass Additionsrun that created the line.Create Date - This is the same as the invoice date.Source System - This is how we can tell where the line originated e.g. Oracle Payables.Invoice Date - This is populated from the invoice.Clearing Account - This will contain the invoice line distribution GL Account that wouldcorrespond to an existing Asset Categories Clearing Account segment.Asset Type - This is defaulted from the asset category - e.g Capitalized if the invoice linematched an Asset Clearing Account and Expensed if the invoice line was an expensed item thatwas tracked as an asset.Book - This is defaulted from the book that Mass Additions Create was run.Depreciate - This is automatically checked if the asset type is capitalized and not checked if themass addition line is of type Expensed.Date in Service - This depends on the sysdate.

3. Mass Addition Lines have been created but the log file shows a warning about thenumber of units being invalid. What does this mean?

A: If an invoice is not matched to a Purchase Order then Mass Additions Create will alwayscreate a mass addition line with one unit and you would get a warning in the log file along thelines of:Invoice ID: 119788 Distribution Line Number: 10 Warning!Warning: Invalid Units. Mass Additions created with 1 unitCause: The invoice line from which you created a mass addition has units greater than the limitof 9999, null units or fractional units.



When an invoice line is not matched to a Purchase Order, the units associated with the invoiceline are NULL. In Oracle Assets, the units column is required to permit the assignment ofdepreciation expense account distributions. Therefore a default value of 1 is assigned to theselines.

4. How is the DPIS for the mass addition line determined?

A: You may expect that the date placed in service should be the invoice date, however this is nottrue.If the sysdate is in the current open period, the default date placed in service is the calendar dateyou enter the asset. If the calendar date is before the current open period, the default date is thefirst day of the open period. If the calendar date is after the current open period, the default dateis the last day of the open period. You have the choice of accepting this date or entering anyother date in the current accounting period or any prioir period. You can never add assets with afuture DPIS. You can change the DPIS at any time. If you change it after depreciation has beenrun, Oracle Assets treats this as a financial adjustment and the depreciation reserve is

recalculated accordingly.5. What is the 'Track As Asset' flag for on the invoice line?

A: If you enter an Asset account on the invoice line, then the track as asset flag willautomatically be checked. However only Asset accounts that are setup as asset clearing accountsare accepted by the Mass Additions Create Program.If you want to send expensed lines over to Assets i.e. lines that will become expensed assets andnot depreciate then you can manually check the Track as Asset box and these will be picked up

by the Mass Additions Create program as Expensed lines.

6. Can I create Mass Addition lines from invoices in AP that were submitted for approvalbut placed on hold?

A: Invoice lines with certain types of holds can still be sent to Oracle Assets. For details on thedifferent types of holds please review Appendix E in the Oracle Payables User Guide.

7. How To Run Mass Additions Again In AP For Data Already Flagged For FA?

A: You need to run the Create Mass Additions Process again but the standard process forrunning Create Mass Additions is that once it is run, it can not be run again. The Create MassAdditions process flags the invoice distributions as already tested for FA, and will not pick themup the next time it is run. The question is how can you update the data to allow the process to runagain. Please contact Oracle Support Services for assistance updating tables using SQL

8. Mass Additions Create created duplicate lines. How did this happen?

A: The problem could be the fact that several Mass Additions Create Programs were submittedin parallel and the Concurrent Program Definition for the executable APMACR is not



incompatible with itself.Login to System Administration responsibility and set the program to be incompatible with itselfunder concurrent>program>define. Auto Install does not set the incompatibility of this program.

9. How is the PO information transferred to FA?

A: If you created an invoice based on a PO then FA will take this information from AP.However, if your PO and your invoice are not associated in AP and you just need to add the POnumber or other data then you will need to enter this information in the descriptive flexfields.You can only use ATTRIBUTE column from 1 to 15 in FA_MASS_ADDITIONS

FAQ On Depreciation

1.

What is unplanned depreciation?

Answer: Unplanned depreciation is a feature used primarily to comply with specialdepreciation accounting rules in Germany and the Nederlands. However, you also can use thisfeature to handle unusual accounting situations in which you need to adjust the net book valueand accumulated depreciation amounts for an asset without affecting its cost. Oracle Assetsimmediately updates the YTD and LTD depreciation and the net book value of the asset. Theunplanned depreciation expense you enter must not exceed the current net book value (Cost -salvage value - accumulated depreciation) of the asset.

2. Can depreciation be suspended for a specified period of time? Answer: Depreciation can be suspended at any time by changing the depreciate flag on the

book form to No. Note that the total depreciation to be taken over the life of the asset (includingthat incurred in periods the flag was set to No) will still be taken over the original life assigned tothe asset. If the asset was added with the depreciate flag set to No, missed depreciation will becaught up in the period the flag is changed to Yes. If the asset was added with the depreciate flagset to Yes and the flag was later changed to No, the missed depreciation will be caught up in thelast period of the assets ORIGINAL life; suspending depreciation will not extend the period overwhich the asset is depreciated.3. Can depreciation expense be manually input to override the system?

Answer: Depreciation reserve adjustments can be made to a tax book. From release 10.7, withunplanned depreciation you may manually override the depreciation amount taken in thecorporate book. The depreciation amount cannot be greater than the net book value of theaccount.4. How does the 'Depreciate When Placed In Service' flag on my prorate convention affectthe calculation and allocation of depreciation?

Answer: With the exception of the method type 'Calculated Straight Line', depreciation for theyear is calculated based on the prorate date which maps to a prorate period and rate on the

prorate calendar. This total amount is then allocated back to the individual periods in theyear. If this flag is set to 'No', the years depreciation will be spread over the periods beginningwith the prorate date. If the flag is set to 'Yes' , the years depreciation will be spread over the



depreciation method, life, etc.Additionally, 'What-If Analysis' is very flexible in allowing you to select a subset of assets foranalysis. Selection criteria include Range of Asset Numbers, Range of Dates Placed in Service,Asset Category etc. For 'Depreciation Projections', you must specify a BOOK and the programselects all active assets for that book.

8. When I run depreciation I get" Er ror : f unction f afbgcc retur ned fail ur e (call ed from fadofl x) Getting account

CCID " How do I correct this problem? Answer: Set the profile options PRINT_DEBUG and FA:DEPRN SINGLE to 'Yes' and re run

depreciation. Note down the asset number and distribution id. Depreciation tries to build a Codecombination id for one of the following:Asset Cost Account/CIP Cost Acct (Current Period Asset Clearing Account)/CIP Clearing Acct(Current Period Adds) Depreciation Expense Account (Prior Period Additions)Check whether dynamic insert is Yes or No. If it is 'No' set it to 'Yes' in the flexfields screen. Ifit is already set to 'Yes' that means the combination generated is not valid. To find out what

combination is being generated do the following : Find out which category the asset belongs to. (using Asset workbench).

Go to category books form and find the account segment value and CCIDs for Asset CostAccount &AssetClearing Account or (CIP Cost Acct/CIP Clearing Account if the asset is CIP).

Find out the default CCID for the book from Books Screen.

Find out the distribution CCID (only if it is prior period addition).

Now run the script faxagtst.sql and see what combination is getting built9. What depreciation methods are supported within Oracle Assets?

Answer: You may choose from the following:

Straight-line

Declining balance

Sum of year's digits

Units of production

ACRS and MACRS

Flat rate

Diminishing value

Bonus depreciation

10. When should I run the depreciation program? Answer: In release 11i you can run depreciation any number of time but without checking the

close period checkbox.In release 11 You should run depreciation when you are ready to closeyour depreciation period.In release 11i depreciation can be roll backed as many number of time untill close period check

box is checked. In release 11,Depreciation CANNOT be rolled back once run. Since thedepreciation program closes the period, you should make sure that you entered all yourtransactions for the current period. If you forget to enter a transaction in the current period, youcan enter a retroactive addition, transfer, or retirement transaction in the following period. Oracle



Assets will not calculate adjustments to depreciation until you run depreciation again.If you are closing the last period for a fiscal year, you cannot enter a retroactive retirement for a

period after the end of the year.

11. How often can I run depreciation?

Answer: In release 11i you can run deprecaition any number of times untill you rundepreciation with close period checkbox checked. While in release 11 You can run depreciationonly once per depreciation period. When you run depreciation and close the period, youCANNOT reopen that period. You must run depreciation for EACH corporate and tax book;Oracle Assets does not run depreciation automatically for a tax book when you run depreciationfor the associated corporate book. Run Mass Copy to update your tax book prior to runningdepreciation for the tax book.

12. What happens if I run depreciation when there are retirements or reinstatementspending?

Answer: When you submit depreciation, the process automatically runs the gain/loss program

to calculate gains and losses for any pending retirements. You also can run the gain/loss programindependently in order to reduce depreciation processing time.

13. What is the difference between depreciation projections and depreciation? Answer: Depreciation projections use a completely separate set of modules than the

Depreciation program uses. Depreciation projections do not take into account adjustmentsentered in the current period, so any new retirements, transfers, or adjustments are not taken intoaccount. Projections simply take a snapshot of the asset at the start date of the projection and

project depreciation expense based on that information.

14. What happens if depreciation encounters an error? How do I proceed? Answer: If the depreciation program encounters an error, the program will stop and perform

a rollback to the previous commit. The program automatically resets theDEPRN_RUNNING_FLAG to NO. If the error is straightforward, such as "Out of rollbacksegments", you can try to correct the error and then resubmit the depreciation program. If theerror is more serious, such as an operating system error, you should call Support before takingany further actions.

15. What can I do to reduce processing time for the depreciation program? Answer:

Run gain/loss at several times throughout the period (you can run the gain/loss programas often as you want). Then, when you finally run depreciation, the gain/loss program will

process only a few retirements or reinstatements instead of many.

Ensure that your tables are not fragmented. Ask your database administrator to check forfragmentation problems. If fragmentation exists, export and reimport the tables,or recreate them.

16. How does the depreciation program handle the end of a fiscal year? Answer: At the end of a fiscal year, the depreciation program runs a short module to prepare

Oracle Assets for the next fiscal year. This module runs automatically during the depreciation program. The fiscal years program runs if the current period is the last period in the fiscal year.



This occurs when the period number of the current period = NUMBER_PER_FISCAL_YEAR inthe table FA_CALENDAR_TYPES. The fiscal years program checks if there are rows definedfor the next fiscal year in FA_DEPRN_PERIODS, FA_FISCAL_YEAR,FA_CALENDAR_PERIODS, and FA_CONVENTIONS. If rows do not already exist, the fiscalyears program creates them.

Oracle Assets FAQ For Retirements

1. Is it possible to perform mass retirements?

Yes. You can use the Mass Retirements window to retire a grouping of assets. Please refer tothe Oracle Asset User Guide for details.

2. What is the earliest retirement date I can enter for a prior period retirement?

For retroactive retirements, the earliest retirement date you can enteris the later of (1) the beginning date of the current fiscal year, or (2) the dateof the last transaction for the asset in this book.

3. If I perform several partial retirements on an asset, which retirementscan I reinstate?

If you perform several partial retirements on an asset, Oracle Assetsonly lets you reinstate the most recent retirement you entered.

4. What journal entries does Oracle Assets create for a retirement?

When you retire Capitalized or CIP assets, Oracle Assets creates journalentries to back out the appropriate Cost and Depreciation Reserve (CIPassets have zero Reserve) in your General Ledger. Oracle Assets alsocreates journal entries to multiple gain/loss accounts, or to a single gain/loss account, depending on how you set up your retirement accounts in theBook Controls form. Gain/loss account components include Proceeds of Sale,Cost of Removal, Net Book Value Retired, and Revaluation Reserve Retiredaccounts. Oracle Assets does not create any journal entries when yourretire Expensed assets. For prior period retirements, Oracle Assets alsocreates journal entries the catch up or back out depreciation from thedepreciation reserve. This is effective in the current accounting period.

5. What journal entries does Oracle Assets create for a reinstatement?

When you reinstate an asset with PROCESSED in the STATUS field, OracleAssets creates journal entries both to reverse those created when youretired the asset and to recover depreciation not charged to the asset.When you reinstate an asset with PENDING in the STATUS field, Oracle Assetsdeletes the retirement transaction and does not create any journal entries.



6. What is a retirement convention?

Oracle Assets uses the prorate convention to determine how much depreciationto take in the first and last year of an asset's life based on when you

place the asset in service. However, if you retire an asset before it isfully reserved, Oracle Asset uses the retirement convention to determinehow much depreciation to take in the year retired based on the retirementdate.

7. Can I retire expensed items?

Yes. However, Oracle Assets does not create any journal entries when youretire an expensed item.

8. When I retire an asset in the CORP book, does Oracle Assets retire

the asset in all the associated TAX books?You can retire an asset from any depreciation book without affectingother books. However, you have the option to have Oracle Assets copy theretirement transaction into your TAX Books automatically. If you checkthe Mass Copy Retirements box when you define your TAX book, thePeriodic Mass Copy process copies all retirement transactions in theassociated Corporate Book into your TAX Book. If the retirementtransaction is in the same tax period as the addition transaction, you mustmanually enter a retroactive retirement in a later period.

9. What reports can be run for retirement information?

Asset Retirements by Cost Center ReportAsset Retirements ReportReinstated Assets ReportRetirements Report

10. How can I retire an asset that was added in the current period?

You must enter it as a prior period retirement after you run depreciation.Or, you may delete the asset anytime in the period you added it withoutaffecting any subcomponents and no journal entries will be created.Please note you cannot backdate a retirement to a previous fiscal year.

11. Can I retire CIP assets?

Yes, CIP assets can be retired in full. CIP assets cannot be partiallyretired.



Assets FAQ Create Accounting R12

1.How To Transfer The Journals To GL That Have Already Previously Been Accounted By

Create Accounting?

Answer:

Create Accounting does have the option to transfer to GL for the user's convenience to allow both in a one-step process. If Create Accounting was run successfully with this parameter set to No, the records will not be picked up again when Create Accounting is run again.Instead, oneneeds to run program Transfer Journal Entries to GL - Assets to transfer any accounting that iscreated in Final mode, but not transferred.

Navigate: Fixed Assets Responsibility > Other > Requests > Run > Select and Submit the

Transfer Journal Entries to GL - Assets program (FAGLTRN) with parameters to include the journal entries to be transferred.

If the program does not exist for the Assets request group you are using, you should be able toadd it to your request group for FA.

- Log on Sysadmin responsibility- Navigate to Security > Responsibility > Define- Query the FA responsibility you are using- Check the name of the Request Group assigned to it- Back to the menu, navigate to Security > Responsibility > Request

- Query the Request Group- Add the program Transfer Journal Entries to GL - Assets to the list from the LOV.

Save the changes. Now you can run the program Transfer Journal Entries to GL - Assets.

2.How Is Depreciation Catchup Charged In Period Of Addition sent To GL In Release 12?

Answer:

When an asset is added as Expensed with backdated Date Placed in Service ,the applicationcalculates depreciation catchup in the period of addition.

In Release 11i, this depreciation catchup is part of the Depreciation Journal which is created afterrunning Depreciation.

For example, an asset is added in period SEP-08 as Expensed with cost =1000 and Prorate date=01-JAN-2008 .



Depreciation Method is Table based on Cost with rate=0.5 in first yearDepreciation catchup is charged for January 2008 to August 2008 = 1000 * .5 /12 * 8 = 333.33

Hence in release 11i following Journal entries are sent to GL:

Addition Journal in R11iDr. Asset Cost 1000.00Cr. Asset Clearing 1000.00

Depreciation Journal in R11iDr. Depreciation Expense (Adjustment) 333.33Dr. Depreciation Expense 41.67Cr. Accumulated Depreciation 375.03

In Release 12 , with the SLA model , behavior has been changed : the expense is allocated to theevent that drove it.As the backdated addition is what spawned the depreciation catchup , it is now tracked at theevent level for thattransaction accordingly.

This is the reason why the depreciation catchup is included in the Addition Journal

Addition Journal in R12

Dr. Asset Cost 1000.00Dr. Depreciation Expense (Adjustment) 333.33Cr. Asset Clearing 1000.00Cr. Accumulated Depreciation 333.33

Depreciation Journal in R12

Dr. Depreciation Expense 41.67Cr. Accumulated Depreciation 41.67

3.Can the Payables Code Combination Identifier (PAYABLES_CCID) be used as a sourcefor accounts other then the Asset Clearing account?

Answer:

No, it cannot be used as a source for any other account then the clearing account as thePAYABLES_CCID is not loaded for e.g. the Cost account. It is only loaded for the Clearingaccount. Validate Application Accounting Definitions and Create Accounting will not fail, it will

just simply not load and use it.



It would also be problematic as e.g. what would happen if a second invoice with a differentClearing Account from AP would be added or if a source line transfer would be performed or aretirement? The system could only use one CCID.

Instead, there are 2 other options available:

1. One can use the value in the Expense account combination entered in the Prepare MassAdditions form or2. Set up a descriptive flexfield to contain that value set and enter the segment value there whencreating the asset.

4.How to setup the secondary ledger so that the results of the corporate FA book journalsto be generated for the secondary ledger also?

Answer:

Perform the following steps in order that the secondary ledger to have generated the journalscorresponding to the corporate book:

a. Go to Accounting Setup Manager form from FA responsibility:(N) Setup > Financials > General Ledger > Accounting Setup Manager > AccountingSetups

b. Query for your ledger.

c. Press Update button for your Secondary Ledger.

d. In the ledgers form, press Update button for Subledger Accounting Options of your secondaryledger.

e. For Assets application press Update Accounting Options button.

f. Ensure that Subledger Acounting Enabled and Use Primary Ledger Amounts options are set toYes. If they are not set to Yes then please set them and press Apply button.

g).Go to the Assets application and submit again Create Accounting request for the corporate book as Draft and withDetail level. You should be able to see now in the Create Accounting output the secondaryledger journals associated with the corporate book.

5.R12: How To Transfer Reconciliation References From FA Subledger To GL?

Answer:

Navigation: Setup > Financials > Subledger Accounting > Accounting Methods Builder >Journal Entry Setups > Journal Line Types



a. Query a seeded Journal Line Type and copy it by clicking on the Copy button at the bottomleft of the form

b. Give your Journal Line Type code, name, and description a meaningful name.

c. Click on the Accounting Attribute Assignments button at the bottom right of the formd. Pick a source for the Reconciliation Reference

e. Save.

Navigation: Setup > Financials > Subledger Accounting > Accounting Methods Builder >Methods and Definitions > Journal Line Definitions

f. Link the Journal Line Type just created to the Journal Line Definition. Copy a seeded one andcreate your own if needed.

g. Assuming that the JLD is already linked to the Application Accounting Definition, validate theApplication Accounting Definition either in the form or via the concurrent program 'ValidateApplication Accounting Definitions'.Assuming also that the Application Accounting Definition is already linked to the SubledgerAccounting Method which in turn is already linked with the ledger, Create Accounting can now

be run.

h. Once Create Accounting, Journal Import and the Post program in GL have completed, one canreconcile either manually or run Automatic reconciliation in GL.

6.How to avoid the transfer to GL of the journal entries related to the tax book in R12 ?

Answer:

This is the intended functionality to create the accounting entries in SLA for both the corporate book and the tax book as it is required for reporting. However, the accounting entries for the tax book can be prevented from being transferred to GL by keeping the check box 'Allow GLPosting' unchecked for the tax book in the Book Controls screen.

7.The CODE_COMBINATION_ID column in the FA_ADJUSTMENTS table containsNULL values in Oracle Applications Release 12 Why ?

Answer:

This is one of the main changes related to Subledger Accounting (SLA) in R12. The accountcombination is generated during the Create Accounting process and it is stored in the SLAtables.

The CODE_COMBINATION_ID column is now populated only for:



- Unplanned depreciation- Cost clearing account for invoice lines from Payables (AP)

8.How to Show The Error Messages In The Create Accounting For Assets Program If ItCompletes With Warning ?

Answer:

To show why the 'Create Accounting - Assets' program completed with warning, re-run it withthe parameter 'Report' value set to 'Detail' or to 'Summary' to show the error number and errormessage in the 'Subledger Accounting Program Report.'

fixed assets faq_new

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