Fixed Assets ( FA )

Agenda
•Assets Information Flow
•Fixed Assets Model
•Asset Flexfields
•Asset Category Flexfield
•Asset Location Flexfield
•Asset Key Flexfield
•Asset Creation
•Mass Additions
•Manual Additions
•CIP Assets
•Cost Adjustment Process
•Depreciation Process
•Reclassification of Assets
•Asset Transfer Process
•Retirement Process
•Reinstatement
•Revaluation
 Information Flow

• Transfer for
Accounts capitalization
Purchasing Fixed Assets
Payable

• PO Definition • Invoice entry • Capitalization Process

• Receiving Transaction • PO & Receipt

matching
 Fixed Assets Model
GL Set Of Book

Corporate Book

Depreciation Calendar
- Monthly
Category Flexfield
Asset Categories
Prorate Convention
Location Flexfield - Full Month
Asset Locations

Key Flexfield Deprecation Method

- Flat Rate
 Asset Flexfields

Three Key Flexfields

•Asset Category Flexfield

Segment 1 Major Category

Segment 2 Minor Category

Example:
Major Category: Network (Siemens)
Minor Category: Network Antenna
Network Backbone
Network BSS ………..
 Asset Flexfields

For each minor category , following natural accounts will be created in

the Chart of Accounts:
•Asset Cost Account

• CIP Cost Account

•Provision for Depreciation Account

The Depreciation Expense Account and Clearing Accounts will be

created at the major category level.

Depreciation will be charged to the respective Connectivity Sites, P0S

Locations and offices.
 Asset Flexfields
Location Flexfield -
•Site wise tracking of assets.

Segment 1 Country
Segment 2 Cost Center
Segment 3 Sub-Area

Asset Key Flexfield -

Segment 1 Insurance Value

Segment 2 Insurance Date of Expiry
 Mass Addition Process
Purchase
Order Purchasing

Invoice Oracle Payables

Run Post
Create Mass Initiate Mass Addition New Asset
Mass addition
Additions Process Created
Program

•Review the Mass Addition Lines

Mass Additions •Assign the Asset category.

Status Report •Assign the depreciation expense
account.
•Mass additions Posting Report
•Assign the Location.
•Un-posted Mass Additions Report
•Perform Split, Merge, Cost
Adjustment or New Asset.
 Asset Creation
Accounting Entries

On entering an Invoice in Accounts Payable:

Dr. Asset Cost Clearing A/c

Cr. Vendor Liability A/c

On creation of an Asset in Fixed Assets:

Dr. Asset Cost A/c

Cr. Asset Cost Clearing A/c
 Manual Additions Process

Initiate
Finance Department Asset Addition Asset Created
process

•Assign to an Asset Category.

•Assign the Asset type.
•Assign to a Corporate Book •Asset By Category Report
•Additions By Source Report
•Specify the Original cost. •Annual Additions Report
•Specify the source details.

Dr. Asset Cost A/c

Cr. To Asset Cost Clearing A/c
 CIP Assets and Capitalisation

Oracle Payables
Mass Addition New CIP Initiate Initiate
Invoice Process Asset Created Capitalisation. Capitalisation.
•Assign the Asset category. •Select CIP Assets.
•Assign the location. •Specify Capitalisation Date.
•Assign the Depreciation Expense A/c

Dr. CIP Cost Clearing A/c

Cr. To AP Liability A/c

Dr. CIP Cost A/c

Cr. To CIP Cost Clearing A/c

Dr. Asset Cost A/c

Cr. To CIP Cost A/c
 Cost Adjustment Process

Initiate Mass Yes

Account Payables Amortised Asset cost updated
Addition Process

• Assign the Cost Adjustment

line to an existing asset.
No

Asset cost
updated with
Dr. Asset Cost A/c Catch up
Cr. To Asset Cost Clearing A/c
depreciation
•Transaction history
report

Expensed Adjustments
Amortised Adjustments
Dr. Depreciation Expense A/c
Dr. Depreciation Expense A/c
Dr. Depreciation Expense Adjustment A/c
Cr. To Accumulated Depreciation A/c
Cr. To Accumulated Depreciation A/c
 Reclassification Process

Initiate
FA Section Asset Reclassified
Reclassification Process

•Asset Reclassification Report

Dr. Asset Cost (New Category) A/c

Dr. Accumulated Depreciation (Old Category) A/c
Cr. To Asset Cost (Old Category) A/c
Cr. To Accumulated Depreciation (New Category) A/c
 Depreciation and G.L Updation Process
Run Run
FA Section Projected Final
Depreciation Depreciation •Journal Entry Reserve
Ledger Report

Approval
Depreciation Period
Closure
•Depreciation Projection
report Run
Create Standard
Dr. Depreciation Expense A/c Journal Entries
Cr. To Accumulated Depreciation A/c Program

Creation of Journal Entries

General Ledger
 Transfer Process

Concerned Dept.

FA Section Initiate New Assignment effected

Transfer process

•Assign Transfer date.

•Across Cost Centres, departments,etc.
•Individually / Group.

•Transaction History report

•Asset Transfers report
Dr. Asset Cost (New Cost Centre) A/c
Dr. Accumulated Depreciation (Old Cost Centre) A/c
Cr. To Asset Cost (Old Cost Centre) A/c
Cr. To Accumulated Depreciation (New Cost Centre) A/c
 Retirement Process

Oracle Payables

Cost of Removal

Initiate the Calculate

FA Section
retirement process Gains& Losses

Sale proceeds •Assign the Retirement date

•Assign Retirement Convention
Oracle Receivables •Full or Partial Retirement-
- By Units or Cost Asset Retired

•Asset Retirements Report

•Transaction History report
 Retirement Accounting

AR FA AP
Sale Proceeds Retirement Transaction Cost of Removal

Dr. Accounts Receivable / Bank A/c GL Dr. Cost of Removal Clearing A/c
Cr. Sale Proceeds Clearing A/c Retirement Entry Cr. AP Liability A/c

Dr. Accumulated Depreciation A/c

Dr. Sale Proceeds Clearing A/c
Cr. Asset Cost A/c
Cr. Cost of Removal Clearing A/c
Cr. / Dr. Gain / Loss on sale of Fixed Asset A/c
 Other Transactions

Re-instatement of Retirement

•Erroneous retirements.

•Catch-up Depreciation.

•Reversal of Retirement Entry.

Revaluation of Assets

•Creation of Revaluation Reserve.

•Future Depreciation expense on revalued value.