D50605 - Asset Management Fundametals

R12 Asset Management Fundamentals Ed. 1 Student Guide - Volume 2

D49290GC10

Edition 1.0

June 2007

D50605

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Copyright 2007, Oracle. All rights reserved. This document contains proprietary information and is protected by copyright and other intellectual property laws. You may copy and print this document solely for your own use in an Oracle training course. The document may not be modified or altered in any way. Except where your use constitutes "fair use" under copyright law, you may not use, share, download, upload, copy, print, display, perform, reproduce, publish, license, post, transmit, or distribute this document in whole or in part without the express authorization of Oracle. The information contained in this document is subject to change without notice. If you find any problems in the document, please report them in writing to: Oracle University, 500 Oracle Parkway, Redwood Shores, California 94065 USA. This document is not warranted to be error-free. If this documentation is delivered to the United States Government or anyone using the documentation on behalf of the United States Government, the following notice is applicable: U.S. GOVERNMENT RIGHTS The U.S. Governments rights to use, modify, reproduce, release, perform, display, or disclose these training materials are restricted by the terms of the applicable Oracle license agreement and/or the applicable U.S. Government contract. Oracle, JD Edwards, PeopleSoft, and Siebel are registered trademarks of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.

Authors

Gail DAloisio, Brent A. Bosin, and Paul Scott

Technical Contributors and Reviewers

Kathy Wohnoutka, Ruth Kukla, Jan Quist, JongSung Ahn, Chris Rudd, Som Viswapathy, and Bruce Isner

This book was published using: oracletutor

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Copyright Oracle Corporation, 2007. All rights reserved.

R12 Asset Management Fundamentals Ed. 1 Table of Contents i

Table of Contents

Overview of Oracle Asset Management.........................................................................................................1-1 Overview of Oracle Asset Management........................................................................................................1-3 Objectives ......................................................................................................................................................1-4 Agenda...........................................................................................................................................................1-5 Overview of Oracle Assets ............................................................................................................................1-6 E-Business Suite Integration..........................................................................................................................1-7 Implementation Considerations for Oracle Financials...................................................................................1-8 The Best Project Team for the Job ................................................................................................................1-9 Critical Implementation Issues ......................................................................................................................1-10 Oracle Assets Setup Steps .............................................................................................................................1-12 Oracle Assets Key Flexfields.........................................................................................................................1-13 Implementing Oracle Assets..........................................................................................................................1-14 Asset Books Positioning................................................................................................................................1-15 Asset Categories Positioning .........................................................................................................................1-17 Asset Life Cycle ............................................................................................................................................1-18 Adding Assets Manually ...............................................................................................................................1-19 Mass Asset Additions Process .......................................................................................................................1-21 Adding and Capitalizing a CIP Asset ............................................................................................................1-23 Acquire and Build CIP Assets .......................................................................................................................1-24 Asset Adjustments .........................................................................................................................................1-25 Asset Adjustment Overview..........................................................................................................................1-26 Performing Physical Inventory ......................................................................................................................1-27 Elements of Depreciation ..............................................................................................................................1-29 Basic Depreciation Calculation .....................................................................................................................1-31 Tracking Asset Retirements...........................................................................................................................1-33 Assets Journal Entries Flow...........................................................................................................................1-34 Default Account Generator Process for Oracle Assets ..................................................................................1-36 Reconciling Data in Oracle Assets ................................................................................................................1-37 Viewing Asset Information Online................................................................................................................1-38 Oracle Assets Reporting ................................................................................................................................1-39 Assets Reports Groupings..............................................................................................................................1-40 Creating a Tax Book......................................................................................................................................1-41 Entering Information in Tax Books...............................................................................................................1-42 Transaction APIs ...........................................................................................................................................1-44 Business Events .............................................................................................................................................1-46 Asset Business Event Triggers ......................................................................................................................1-47 Summary........................................................................................................................................................1-48

Asset Controls Setup .......................................................................................................................................2-1 Asset Controls Setup .....................................................................................................................................2-3 Objectives ......................................................................................................................................................2-4 Agenda...........................................................................................................................................................2-6 Oracle Assets Setup Steps .............................................................................................................................2-7 Setup Steps Flow ...........................................................................................................................................2-8 Oracle Assets Key Flexfields.........................................................................................................................2-15 Setting Up Key Flexfields .............................................................................................................................2-16 Asset Category Key Flexfield........................................................................................................................2-17 Location Key Flexfield..................................................................................................................................2-18 Asset Key Key Flexfield................................................................................................................................2-19

Guided Demonstration - Oracle Assets Key Flexfield Setup.....................................................................2-20 Creating Key Flexfield Combinations ...........................................................................................................2-22

Guided Demonstration - Create a Location Flexfield Combination ..........................................................2-23 Practice - Create a Location Key Flexfield Combination ..........................................................................2-24

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R12 Asset Management Fundamentals Ed. 1 Table of Contents ii

Solution Create a Location Key Flexfield Combination.........................................................................2-25 Specifying System Controls ..........................................................................................................................2-26

Guided Demonstration - System Controls Form .......................................................................................2-28 QuickCodes ...................................................................................................................................................2-29

Guided Demonstration - QuickCodes........................................................................................................2-31 Practice - Add QuickCode Values .............................................................................................................2-32 Solution Add QuickCode Values............................................................................................................2-33

Defining Fiscal Years and Calendars.............................................................................................................2-34 Setting Up Fiscal Years .................................................................................................................................2-35 Setting Up Asset Calendars ...........................................................................................................................2-36

Guided Demonstration - Fiscal Years & Calendars...................................................................................2-37 Practice - Create an Oracle Assets Calendar..............................................................................................2-39 Solution Create an Oracle Assets Calendar ............................................................................................2-40

Sharing Calendars..........................................................................................................................................2-42 Defining Price Indexes ..................................................................................................................................2-43 Profile Options...............................................................................................................................................2-45

Guided Demonstration - Oracle Assets Profile Options ............................................................................2-51 Asset Insurance..............................................................................................................................................2-52 Entering Asset Insurance Information ...........................................................................................................2-54

Guided Demonstration - Entering Asset Insurance Information................................................................2-55 Implementing Oracle Assets..........................................................................................................................2-57 Planning Implementation...............................................................................................................................2-58 Key Flexfields Planning Considerations........................................................................................................2-60 The Key Flexfields Planning Phase ...............................................................................................................2-62 Implementing Oracle Assets..........................................................................................................................2-64 Convert Existing Asset Information ..............................................................................................................2-66 Using the FA_MASS_ADDITIONS Table for Conversion ..........................................................................2-68 Implementing Oracle Assets..........................................................................................................................2-70 Post Conversion Reconciliation.....................................................................................................................2-71 Other Conversion Issues................................................................................................................................2-72 Maintaining an Audit Trail ............................................................................................................................2-73 Maintaining Audit Trails ...............................................................................................................................2-74 Defining Asset Warranties.............................................................................................................................2-76

Guided Demonstration - Define an Asset Warranty ..................................................................................2-77 Creating Leases .............................................................................................................................................2-78

Guided Demonstration - Define a Lease....................................................................................................2-79 Summary........................................................................................................................................................2-81

Asset Books.......................................................................................................................................................3-1 Asset Books ...................................................................................................................................................3-3 Objectives ......................................................................................................................................................3-4 Agenda...........................................................................................................................................................3-5 Asset Books Positioning................................................................................................................................3-6 Asset Books Regions .....................................................................................................................................3-8 Calendar Region ............................................................................................................................................3-10 Accounting Rules Region..............................................................................................................................3-12 Natural Accounts Region...............................................................................................................................3-14

Guided Demonstration - Define an Asset Book.........................................................................................3-16 Group Depreciation .......................................................................................................................................3-18 Group Depreciation in the Global Market .....................................................................................................3-20 Group and Member Asset Rules....................................................................................................................3-21 Set Up Group Assets......................................................................................................................................3-23 Assigning Member Assets to Group Assets ..................................................................................................3-25 Group Asset Reserve Transfer.......................................................................................................................3-27

Practice - Set Up Group Assets..................................................................................................................3-28 Solution Set Up Group Assets ................................................................................................................3-30

Energy Assets ................................................................................................................................................3-32

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R12 Asset Management Fundamentals Ed. 1 Table of Contents iii

Security by Book ...........................................................................................................................................3-34 Organizations and Security by Book .............................................................................................................3-35 How Security by Book Is Used within Process Flow ....................................................................................3-36 Security by Book Setup Steps........................................................................................................................3-37

Guided Demonstration - Security by Book Setup (Optional) ....................................................................3-41 Practice - Review Security by Book Setup ................................................................................................3-44 Solution Review Security by Book Setup...............................................................................................3-46

Troubleshooting Security by Book................................................................................................................3-48 Implementation Considerations for Security by Book...................................................................................3-50 Summary........................................................................................................................................................3-51

Asset Categories...............................................................................................................................................4-1 Asset Categories ............................................................................................................................................4-3 Objectives ......................................................................................................................................................4-4 Agenda...........................................................................................................................................................4-5 Asset Categories Positioning .........................................................................................................................4-6 Asset Categories Regions ..............................................................................................................................4-7 Asset Categories Setup ..................................................................................................................................4-8

Guided Demonstration - Define Asset Category Flexfield Values ............................................................4-10 Practice - Add Asset Category Key Flexfield Values................................................................................4-11 Solution Add Asset Category Key Flexfield Values ..............................................................................4-12 Guided Demonstration - Define an Asset Category...................................................................................4-21 Practice - Define Asset Categories ............................................................................................................4-23 Solution Define Asset Categories ...........................................................................................................4-24

Summary........................................................................................................................................................4-29 Manual Asset Additions ..................................................................................................................................5-1

Manual Asset Additions ................................................................................................................................5-3 Objectives ......................................................................................................................................................5-4 Agenda...........................................................................................................................................................5-6 Asset Life Cycle ............................................................................................................................................5-7 Adding Assets Manually ...............................................................................................................................5-8 Asset Additions Required Data .....................................................................................................................5-10 QuickAdditions..............................................................................................................................................5-11

Guided Demonstration - Add Assets Using QuickAdditions (Optional) ...................................................5-14 Practice - Add an Asset Using QuickAdditions.........................................................................................5-16 Solution Add an Asset Using QuickAdditions .......................................................................................5-17

Detail Asset Additions...................................................................................................................................5-20 Detail Additions - Asset Details Window......................................................................................................5-22 Detail Additions - Books Window.................................................................................................................5-24 Asset Cost Terminology ................................................................................................................................5-26 Accumulated Depreciation Considerations....................................................................................................5-27 Depreciate Checkbox Actions .......................................................................................................................5-29 Detail Additions - Assignments Window ......................................................................................................5-30 Detail Additions - Source Lines Window......................................................................................................5-31

Guided Demonstration - Add an Asset Using Detail Additions (Optional)...............................................5-32 Practice - Add an Asset Using Detail Additions........................................................................................5-33

Manual Asset Additions Journal Entries .......................................................................................................5-37 Summary........................................................................................................................................................5-38

Mass Asset Additions.......................................................................................................................................6-1 Mass Asset Additions ....................................................................................................................................6-3 Objectives ......................................................................................................................................................6-4 Agenda...........................................................................................................................................................6-6 Mass Asset Additions Process .......................................................................................................................6-7 Using the Mass Additions Interface Table ....................................................................................................6-9 Adding Assets from Invoice Distribution Lines ............................................................................................6-10 The Mass Additions Process..........................................................................................................................6-11

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R12 Asset Management Fundamentals Ed. 1 Table of Contents iv

Step 1 Mass Additions Create........................................................................................................................6-13 Requirements to Create Mass Addition Lines ...............................................................................................6-15 Tracking Expensed Items in Oracle Assets ...................................................................................................6-17

Guided Demonstration - Create Mass Addition Lines...............................................................................6-18 Practice - Create Mass Addition Lines ......................................................................................................6-21 Solution Create Mass Additions .............................................................................................................6-23

Other Mass Additions Considerations ...........................................................................................................6-27 Step 2 Prepare Mass Additions......................................................................................................................6-29 Required Fields and Mass Additions .............................................................................................................6-30 Automatic Preparation of Mass Additions.....................................................................................................6-31 Automatic Preparation of Mass Additions Process .......................................................................................6-32

Guided Demonstration - Automatic Preparation of Mass Addition Lines.................................................6-34 Mass Addition Queues...................................................................................................................................6-43

Mass Addition Queue Names ....................................................................................................................6-44 Changing Asset Information..........................................................................................................................6-45

Changing Asset Information......................................................................................................................6-46 Merging Mass Addition Lines .......................................................................................................................6-47 Splitting Mass Addition Lines .......................................................................................................................6-48 Merging Then Splitting Functionality ...........................................................................................................6-49 Adding a Mass Addition Line to an Existing Asset.......................................................................................6-50

Guided Demonstration - Prepare Mass Addition Lines .............................................................................6-51 Practice - Prepare Mass Addition Lines.....................................................................................................6-53 Solution Prepare Mass Addition Lines ...................................................................................................6-55

Accounting for Cost Adjustments Example ..................................................................................................6-61 Step 3 Post Mass Additions ...........................................................................................................................6-62 Effect of Post Mass Additions on Queue Names...........................................................................................6-63

Guided Demonstration - Post Mass Additions...........................................................................................6-64 Practice - Post Mass Additions ..................................................................................................................6-65 Solution Post Mass Additions.................................................................................................................6-66

Step 4 Delete Mass Additions........................................................................................................................6-68 Purge Mass Additions....................................................................................................................................6-69 Future Transactions .......................................................................................................................................6-70 View Pending Transactions ...........................................................................................................................6-73

Guided Demonstration - Add a Future Dated Asset ..................................................................................6-74 Creating Assets Using Web ADI...................................................................................................................6-76 Web ADI Upload to Oracle Assets................................................................................................................6-78

Guided Demonstration - Add Assets Using Web ADI ..............................................................................6-80 Practice - Add Assets Using Web ADI......................................................................................................6-83 Solution Add Assets Using Web ADI ....................................................................................................6-86

Summary........................................................................................................................................................6-89 CIP Asset Additions.........................................................................................................................................7-1

CIP Asset Additions ......................................................................................................................................7-3 Objectives ......................................................................................................................................................7-4 Agenda...........................................................................................................................................................7-5 Adding and Capitalizing a CIP Asset ............................................................................................................7-6 Acquire and Build CIP Assets .......................................................................................................................7-7 Automatically Adding CIP Assets to Tax Books .........................................................................................7-8 Modifying the Cost of CIP Assets .................................................................................................................7-10

Guided Demonstration - Create a CIP Asset and Build Costs ...................................................................7-12 Guided Demonstration - Transfer Invoice Lines .......................................................................................7-14 Practice - Create a CIP Asset and Add Costs ............................................................................................7-16 Solution Create a CIP Asset and Add Costs ...........................................................................................7-18 Practice - Transfer Invoice Lines...............................................................................................................7-21 Solution Transfer Invoice Lines .............................................................................................................7-23

Recording a CIP Asset Addition....................................................................................................................7-27 Capitalizing a CIP Asset................................................................................................................................7-28

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R12 Asset Management Fundamentals Ed. 1 Table of Contents v

Reversing a Capitalized Asset .......................................................................................................................7-29 Guided Demonstration - Capitalizing a CIP Asset ....................................................................................7-30 Practice - Capitalize a CIP Asset ...............................................................................................................7-31 Solution Capitalize a CIP Asset..............................................................................................................7-32

Updating Asset Fields When Capitalizing CIP Assets ..................................................................................7-34 Updating Transaction Types When Capitalizing CIP Assets ........................................................................7-35 Recording a Capitalization - Adding and Capitalizing in the Same Period ...................................................7-36 Recording a Capitalization - Adding and Capitalizing in Different Periods..................................................7-37 CIP Assets and Oracle Projects .....................................................................................................................7-39 Tracking Capital Projects in Oracle Projects .................................................................................................7-40 Capital Projects Flow Integration ..................................................................................................................7-41 Creating Mass Additions from Oracle Projects .............................................................................................7-42 Integrating Oracle Projects with Oracle Assets .............................................................................................7-44 Summary........................................................................................................................................................7-46

Asset Adjustments and Maintenance.............................................................................................................8-1 Asset Adjustments and Maintenance.............................................................................................................8-3 Objectives ......................................................................................................................................................8-4 Agenda...........................................................................................................................................................8-6 Asset Adjustments .........................................................................................................................................8-7 Asset Adjustment Overview..........................................................................................................................8-8 Single Asset Reclassification.........................................................................................................................8-9 Mass Reclassification ....................................................................................................................................8-10 Inheriting Depreciation Rules........................................................................................................................8-11 Copying Category Descriptive Flexfield Information ..................................................................................8-13 Mass Transactions Process ............................................................................................................................8-14 Recording a Reclassification .........................................................................................................................8-15 Adjusting Units..............................................................................................................................................8-16 Adjusting Financial Information....................................................................................................................8-17 Choosing to Expense or Amortize Depreciation Adjustments ......................................................................8-18 Amortizing Adjustments Using a Retroactive Start Date ..............................................................................8-20 Using Mass Changes .....................................................................................................................................8-21 Single Asset Transfers ...................................................................................................................................8-22 Mass Asset Transfers.....................................................................................................................................8-24

Guided Demonstration - Perform Single Asset Adjustments ....................................................................8-26 Guided Demonstration - Perform Mass Transactions................................................................................8-28 Practice - Perform Single Asset Adjustments ............................................................................................8-31 Solution Perform Single Asset Adjustments...........................................................................................8-33

Asset Revaluation ..........................................................................................................................................8-39 Scheduling Asset Maintenance......................................................................................................................8-41

Guided Demonstration - Schedule Asset Maintenance..............................................................................8-42 Performing Physical Inventory ......................................................................................................................8-43 Entering Physical Inventory ..........................................................................................................................8-45 Physical Inventory Comparison.....................................................................................................................8-46 Physical Inventory Reconciliation.................................................................................................................8-48

Guided Demonstration - Review a Physical Inventory..............................................................................8-49 Integrating Web ADI with Physical Inventory ..............................................................................................8-50

Guided Demonstration - Create a Physical Inventory in Web ADI...........................................................8-52 Summary........................................................................................................................................................8-54

Depreciation .....................................................................................................................................................9-1 Depreciation ..................................................................................................................................................9-3 Objectives ......................................................................................................................................................9-4 Agenda...........................................................................................................................................................9-5 Elements of Depreciation ..............................................................................................................................9-6 Depreciation Setup Areas ..............................................................................................................................9-8 Basic Depreciation Calculation .....................................................................................................................9-9 Depreciation Methods....................................................................................................................................9-11

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R12 Asset Management Fundamentals Ed. 1 Table of Contents vi

Using the Life-Based Method........................................................................................................................9-12 Life-Based Method Terms.............................................................................................................................9-13 Life-Based Method Example.........................................................................................................................9-14 Using the Flat-Rate Method...........................................................................................................................9-15 Flat-Rate Method Example............................................................................................................................9-17

Guided Demonstration - Create a New Depreciation Method ...................................................................9-18 Practice - Create a New Depreciation Method...........................................................................................9-19 Solution Create a New Depreciation Method .........................................................................................9-20

Using the Units-of-Production Method .........................................................................................................9-22 Units-of-Production Method Example...........................................................................................................9-23 Entering Production Information...................................................................................................................9-24

Guided Demonstration - Enter Production ................................................................................................9-26 Units-of-Production Method Production Amount Restrictions .....................................................................9-27 Units-of-Production Method Restrictions......................................................................................................9-28 Units-of-Production Capacity Restrictions ....................................................................................................9-29 Prorate Conventions ......................................................................................................................................9-30

Guided Demonstration - Create a Prorate Convention ..............................................................................9-31 Practice - Create a Prorate Convention......................................................................................................9-32 Solution Create a Prorate Convention.....................................................................................................9-33

Run Depreciation Process..............................................................................................................................9-35 Depreciation Program Processes ...................................................................................................................9-37 Rollback Depreciation ...................................................................................................................................9-38 Projecting Depreciation for an Asset ............................................................................................................9-40 Defining a Projection.....................................................................................................................................9-41

Guided Demonstration - Perform a Depreciation Projection.....................................................................9-42 Practice - Run a Depreciation Projection...................................................................................................9-43 Solution Run a Depreciation Projection .................................................................................................9-44

Depreciation Forecasts ..................................................................................................................................9-46 Guided Demonstration - Perform a What-if Depreciation Analysis ..........................................................9-47 Practice - Perform a What-If Depreciation Analysis .................................................................................9-48 Solution Perform a What-If Depreciation Analysis ................................................................................9-49

Using Depreciation Override.........................................................................................................................9-51 Useful Depreciation Reports..........................................................................................................................9-53 Summary........................................................................................................................................................9-55

Asset Retirements ............................................................................................................................................10-1 Asset Retirements ..........................................................................................................................................10-3 Objectives ......................................................................................................................................................10-4 Agenda...........................................................................................................................................................10-5 Tracking Asset Retirements...........................................................................................................................10-6 Overview of Retiring an Asset ......................................................................................................................10-7 Restrictions on Retirements and Reinstatements...........................................................................................10-8 Fully Retiring Assets .....................................................................................................................................10-10

Guided Demonstration -Perform a Full Retirement and Undo Retirement................................................10-11 Partially Retiring Assets ................................................................................................................................10-12

Guided Demonstration - Process a Partial Retirement and Reinstate ........................................................10-14 Mass Asset Retirements.................................................................................................................................10-16

Guided Demonstration - Perform a Mass Retirement................................................................................10-18 External Retirements .....................................................................................................................................10-19 Reinstating Retired Assets.............................................................................................................................10-21 Calculate Gains and Losses Program.............................................................................................................10-22

Practice - Perform a Retirement and Reinstatement ..................................................................................10-23 Solution Perform a Retirement and Reinstatement.................................................................................10-24

Retirement Processing Flow..........................................................................................................................10-27 Processing a Pending Retirement and Reinstatement ....................................................................................10-28 Calculating Depreciation for the Period Retired............................................................................................10-29 Recording Retirements and Reinstatements ..................................................................................................10-30

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R12 Asset Management Fundamentals Ed. 1 Table of Contents vii

Recording Retirements ..................................................................................................................................10-31 Recording a Retirement on Multiple Accounts ............................................................................................10-33 Retirement Journal Entries Example .............................................................................................................10-34 Recording Prior Period Reinstatement Entries ..............................................................................................10-35 Retirement Reports ........................................................................................................................................10-36 Summary........................................................................................................................................................10-39

Asset Accounting..............................................................................................................................................11-1 Asset Accounting...........................................................................................................................................11-3 Objectives ......................................................................................................................................................11-4 Agenda...........................................................................................................................................................11-5 Setting Up Asset Accounting.........................................................................................................................11-6 Assets Journal Entries Flow...........................................................................................................................11-8 Oracle Subledger Accounting........................................................................................................................11-10 Accounting Event Entities and Classes .........................................................................................................11-11 Create Accounting Assets Program ............................................................................................................11-13

Guided Demonstration - Run Create Accounting ......................................................................................11-14 Journal Entries Created..................................................................................................................................11-15 Reconciling Data in Oracle Assets ................................................................................................................11-17 Generating Reports to Reconcile to the General Ledger ...............................................................................11-18 Reconciling an Asset Cost Account...............................................................................................................11-19 Reconciling Asset Cost Accounts..................................................................................................................11-20 Reconciling a CIP Cost Account ...................................................................................................................11-21 Reconciling a Reserve Account.....................................................................................................................11-22 Reconciling Depreciation Expense................................................................................................................11-24 Reconciling Mass Additions..........................................................................................................................11-25 Summary........................................................................................................................................................11-27

Asset Inquiry & Reporting .............................................................................................................................12-1 Asset Inquiry & Reporting.............................................................................................................................12-3 Objectives ......................................................................................................................................................12-4 Agenda...........................................................................................................................................................12-5 Viewing Asset Information Online................................................................................................................12-6 Types of Asset Inquiries ................................................................................................................................12-7 Asset Inquiry Options....................................................................................................................................12-8 iAssets Search for Assets...............................................................................................................................12-9 Viewing Financial Information......................................................................................................................12-11 Viewing Transaction History.........................................................................................................................12-13 Viewing Transaction Accounting ..................................................................................................................12-14 Viewing Subledger Accounting Transactions ...............................................................................................12-15

Guided Demonstration -Perform Asset Inquiries.......................................................................................12-16 Practice - Perform Asset Inquiries .............................................................................................................12-19 Solution Perform Asset Inquiries............................................................................................................12-21

iAssets ...........................................................................................................................................................12-27 iAssets Setup Steps........................................................................................................................................12-28 iAssets Setup StepsRules...........................................................................................................................12-30

Guided Demonstration - iAssets Setup-Rules............................................................................................12-31 iAssets Setup StepsProfile Options............................................................................................................12-34 iAssets Setup StepsUser Responsibilities ..................................................................................................12-35 Oracle Assets Reporting ................................................................................................................................12-36 Assets Reports Groupings..............................................................................................................................12-38 Variable Format Reports ...............................................................................................................................12-39 Assets Reports Using XML Publisher ...........................................................................................................12-40 Summary........................................................................................................................................................12-41

Tax Accounting................................................................................................................................................13-1 Tax Accounting .............................................................................................................................................13-3 Objectives ......................................................................................................................................................13-4

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R12 Asset Management Fundamentals Ed. 1 Table of Contents viii

Agenda...........................................................................................................................................................13-6 Creating a Tax Book......................................................................................................................................13-7 Asset Books Regions .....................................................................................................................................13-8

Guided Demonstration - Create a Tax Asset Book....................................................................................13-10 Practice - Define a Tax Asset Book...........................................................................................................13-12 Solution Define a Tax Asset Book .........................................................................................................13-15

Prerequisites for Setting Up Tax Book Asset Categories ..............................................................................13-18 Guided Demonstration - Add Asset Categories to Tax Book ....................................................................13-19 Practice - Add Asset Categories to a Tax Book.........................................................................................13-21 Solution Add Asset Categories to a Tax Book .......................................................................................13-23

Entering Information in Tax Books...............................................................................................................13-26 Populating the Tax Book by Initial Mass Copy.............................................................................................13-28 Populating the Tax Book ...............................................................................................................................13-30

Guided Demonstration - Perform an Initial Mass Copy ............................................................................13-31 Practice - Perform an Initial Mass Copy....................................................................................................13-32 Solution Perform an Initial Mass Copy ..................................................................................................13-33

Populating the Tax Book by Periodic Mass Copy ........................................................................................13-35 Updating a Tax Book Manually ....................................................................................................................13-37

Guided Demonstration - Manually Add an Asset to a Tax Book ..............................................................13-38 Practice - Manually Add an Asset to a Tax Book......................................................................................13-39 Solution Manually Add an Asset to a Tax Book ....................................................................................13-41

Tax Book Upload Interface ...........................................................................................................................13-44 Discussing Tax Rules ....................................................................................................................................13-46 Deferred Depreciation ...................................................................................................................................13-48 Calculating Deferred Depreciation ................................................................................................................13-49 Adjusting Accumulated Depreciation............................................................................................................13-50 Adjusting Depreciation Reserve for a Single Asset.......................................................................................13-51

Guided Demonstration -Adjust Depreciation Reserve...............................................................................13-53 Adjusting Depreciation Reserve for All Assets .............................................................................................13-54 Controlling Mass Depreciation Adjustment ..................................................................................................13-55 Calculating Mass Depreciation Adjustment ..................................................................................................13-56 Automatically Adding CIP Assets to Tax Books .........................................................................................13-57 General Tax Reports......................................................................................................................................13-59 Special Tax Reports.......................................................................................................................................13-60 Depreciation Adjustment Reports..................................................................................................................13-61 Summary........................................................................................................................................................13-62

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R12 Asset Management Fundamentals Ed. 1 Table of Contents ix

Preface

Profile

Before You Begin This Course

Basic knowledge of business accounting concepts

Familiarity with data processing concepts and techniques

Prerequisites

R12 Navigate Oracle Applications

R12 eBusiness Suite Essentials for Implementers

How This Course Is Organized

This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations and written practice sessions reinforce the concepts and skills introduced.

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R12 Asset Management Fundamentals Ed. 1 Table of Contents x

Related Publications

Oracle Publications Title Part Number

Oracle Assets User Guide B31177

Oracle iAssets User Guide B31179

Additional Publications

System release bulletins

Installation and users guides

Read-me files

International Oracle Users Group (IOUG) articles

Oracle Magazine

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R12 Asset Management Fundamentals Ed. 1 Table of Contents xi

Typographic Conventions

Typographic Conventions in Text Convention Element Example Bold italic Glossary term (if

there is a glossary) The algorithm inserts the new key.

Caps and lowercase

Buttons, check boxes, triggers, windows

Click the Executable button. Select the Cant Delete Card check box. Assign a When-Validate-Item trigger to the ORD block. Open the Master Schedule window.

Courier new, case sensitive (default is lowercase)

Code output, directory names, filenames, passwords, pathnames, URLs, user input, usernames

Code output: debug.set (I, 300); Directory: bin (DOS), $FMHOME (UNIX) Filename: Locate the init.ora file. Password: User tiger as your password. Pathname: Open c:\my_docs\projects URL: Go to http://www.oracle.com User input: Enter 300 Username: Log on as scott

Initial cap Graphics labels (unless the term is a proper noun)

Customer address (but Oracle Payables)

Italic Emphasized words and phrases, titles of books and courses, variables

Do not save changes to the database. For further information, see Oracle7 Server SQL Language Reference Manual. Enter [email protected], where user_id is the name of the user.

Quotation marks

Interface elements with long names that have only initial caps; lesson and chapter titles in cross-references

Select Include a reusable module component and click Finish. This subject is covered in Unit II, Lesson 3, Working with Objects.

Uppercase SQL column names, commands, functions, schemas, table names

Use the SELECT command to view information stored in the LAST_NAME column of the EMP table.

Arrow Menu paths Select File > Save. Brackets Key names Press [Enter]. Commas Key sequences Press and release keys one at a time:

[Alternate], [F], [D] Plus signs Key combinations Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]

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R12 Asset Management Fundamentals Ed. 1 Table of Contents xii

Typographic Conventions in Code Convention Element Example Caps and lowercase

Oracle Forms triggers

When-Validate-Item

Lowercase Column names, table names

SELECT last_name FROM s_emp;

Passwords DROP USER scott IDENTIFIED BY tiger;

PL/SQL objects OG_ACTIVATE_LAYER (OG_GET_LAYER (prod_pie_layer))

Lowercase italic

Syntax variables CREATE ROLE role

Uppercase SQL commands and functions

SELECT userid FROM emp;

Typographic Conventions in Oracle Application Navigation Paths

This course uses simplified navigation paths, such as the following example, to direct you through Oracle Applications.

(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve

This simplified path translates to the following:

1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches Summary.

2. (M) From the menu, select Query then Find.

3. (B) Click the Approve button.

Notations:

(N) = Navigator

(M) = Menu

(T) = Tab

(B) = Button

(I) = Icon

(H) = Hyperlink

(ST) = Sub Tab

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R12 Asset Management Fundamentals Ed. 1 Table of Contents xiii

Typographical Conventions in Oracle Application Help System Paths

This course uses a navigation path convention to represent actions you perform to find pertinent information in the Oracle Applications Help System.

The following help navigation path, for example

(Help) General Ledger > Journals > Enter Journals

represents the following sequence of actions:

1. In the navigation frame of the help system window, expand the General Ledger entry.

2. Under the General Ledger entry, expand Journals.

3. Under Journals, select Enter Journals.

4. Review the Enter Journals topic that appears in the document frame of the help system window.

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R12 Asset Management Fundamentals Ed. 1 Table of Contents xiv

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Depreciation Chapter 9 - Page 1

Depreciation Chapter 9

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Depreciation

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Objectives

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Agenda

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Elements of Depreciation

Elements of Depreciation

Defining Books Define corporate, tax, and budget asset books. Define the corporate book first to associate

it with multiple tax and budget books. The setup of Asset Books is discussed in the Asset Books module of Release 12 Oracle Asset Management Fundamentals. Defining Depreciation Rules

Oracle Assets provides many standard depreciation methods. Set up additional methods if required.

Prorate and retirement conventions determine how much depreciation expense to take in the first and last year of life, based on when you place the asset in service.

Set up the depreciation expense and cost ceilings, as well as the investment tax credit rates and ceilings, if needed.

Because prorate conventions depend on the calendar, Oracle Assets does not predefine any conventions. Define prorate conventions from the oldest date placed in service to the current fiscal year.

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Define price indexes, if necessary, to report gains and losses for your retired assets by using the revalued asset cost.

If not previously done when implementing other Oracle application products, create units of measure for use with assets depreciating under a units-of-production depreciation method.

Defining formula based depreciation methods, cost ceilings, price indexes and investment tax credits are discussed in modules of the Release 12 Asset Management Advanced learning path.

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Depreciation Setup Areas

Depreciation Setup Areas

Asset Books Setup discussed in detail in module Asset Books of the Release 12 Oracle Asset Management Fundamentals path. Calendars Setup discussed in detail in module Asset Controls Setup of the Release 12 Oracle Asset Management Fundamentals. Depreciation Methods Setup discussed in more detail later in this module. Prorate Convention Setup discussed in more detail later in this module. Optional Elements Units of Measure, Depreciation Ceilings, Investment Tax Credit and Price Indexes are discussed in the Asset Controls Setup of the Release 12 Oracle Asset Management Fundamentals.

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Basic Depreciation Calculation

Basic Depreciation Calculation

Prorate Date Oracle Assets prorates the depreciation taken for an asset in its first fiscal year of life

according to the prorate date. Oracle Assets calculates the prorate date when you initially enter an asset. The prorate

date is based on the date placed in service and the asset prorate convention. For example, if you create a following month prorate convention, the prorate date would be the beginning of the month following the month placed in service.

Depreciation Rate Oracle Assets calculates depreciation using either the recoverable cost or the recoverable

net book value as a basis. Oracle Assets uses the prorate date to choose a prorate period from the prorate calendar. For tablebased methods, the prorate period and asset age then determine which rate

Oracle Assets selects from the rate table. The depreciation program calculates asset age from the date placed in service as the number of fiscal years that you have held the asset.

Flatrate methods use a fixed rate and do not use a rate table.

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For tablebased depreciation methods, Oracle Assets uses the depreciation method and life to determine which rate table to use. Then, it uses the prorate period and year of life to determine which of the rates in the table to use.

Flatrate depreciation methods determine the depreciation rate using fixed rates, including the basic rate, adjusting rate, and bonus rate.

Calculate Annual Depreciation Calculated and tablebased methods calculate annual depreciation by multiplying the

depreciation rate by the recoverable cost or net book value as of the beginning of the fiscal year.

Flatrate methods calculate annual depreciation as the depreciation rate multiplied by the recoverable cost or net book value, multiplied by the fraction of year the asset was held.

Allocate Annual Depreciation Across Periods After calculating the annual depreciation amount, Oracle Assets uses your depreciation

calendar, the divide depreciation flag, and the depreciate when placed in service flag to determine how much of the fiscal year depreciation to allocate to the period for which you ran depreciation.

Spreading Depreciation Across Expense Accounts Finally, Oracle Assets allocates the periodic depreciation to the assignments you made

for the asset. Oracle Assets does this according to the fraction of the asset units that is assigned to each depreciation expense account in the Assignments window.

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Depreciation Methods

Depreciation Methods

(N) Setup > Depreciation > Methods You depreciate assets by using several types of depreciation methods that Oracle Assets supports. You also create periodic journal entries for each book to the general ledger. As an asset depreciates, its net book value approaches the salvage value. Oracle Assets is delivered with many seeded depreciation methods. Life-Based

Depreciates the asset cost using an annual depreciation rate. For straight-line depreciation, the annual rate is calculated by dividing the life (in years)

into one. For other life-based methods, Oracle Assets takes the annual depreciation rate from a rate

table. Flat-Rate

Depreciates the asset cost or net book value over time using a fixed rate. Units-of-Production

Depreciates the asset cost by actual use or production for each period.

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Using the Life-Based Method

Using the Life-Based Method

Use a lifebased method to depreciate the asset over a fixed time using specified rates. There are two types of lifebased methods:

Table: Oracle Assets gets the annual depreciation rate from a rate table. Calculated: For straightline depreciation, the depreciation program calculates the annual

depreciation rate by dividing the life (in years) into one. Calculated methods spread the asset value evenly over the life.

You can accommodate new depreciation methods using rate tables instead of formulas. Add the appropriate rates to create a new method at any time. Oracle Assets uses asset recoverable cost or net book value, salvage value, date placed in service, prorate convention, depreciation method, and life to calculate depreciation for lifebased methods. Oracle Assets, using rates from a table or calculated rates, depreciates assets with lifebased depreciation methods to be fully reserved at the end of a fixed lifetime.

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Life-Based Method Terms

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Life-Based Method Example

Life-Based Method Example

Finding the Annual Depreciation Rate The prorate date is the first day of the following month, 01-APR-YYYY. The prorate date falls into prorate period four, in the period APR-YY. Using the rate table, since this is the assets first year, the rate is 0.300.

Calculating Depreciation Annual depreciation amount = Depreciation rate Recoverable cost Year 1 Depreciation = 0.300 x 50,000 = $15,000 Depreciation per period = Annual depreciation/Number of periods from Prorate Period to End of Fiscal Year APR-YY Depreciation = 15,000/9 = $1,666.67

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Using the Flat-Rate Method

Using the Flat-Rate Method

Flat-rate depreciation methods allocate the cost or net book value of an asset over time by using a fixed rate. The flat-rate methods that use the net book value as the depreciable basis are also called diminishing-value methods. Using these methods does not fully reserve an asset, but it decreases the annual depreciation expense over time. Calculating Annual Depreciation

Determine the fraction of the year the asset was held by dividing the number of periods after the prorate period, by the number of prorate periods per year. Make this fraction proportional by the number of days in each prorate period if dividing depreciation by days.

Annual depreciation = Depreciation rate [Asset cost or Net book value (less salvage value)] the fraction of the year the asset was held.

Use the Depreciate When Placed in Service flag to determine the manner in which depreciation expense is spread across depreciation periods in the depreciation calendar.

Adjusting Rate In some countries, the flatrate consists of a basic rate and an adjusting rate, or loading factor. These rates vary according to your reporting authoritys depreciation regulations.

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When you add an asset, you can select a basic rate and an adjusting rate. Oracle Assets increases the basic rate by the adjusting rate to give you the adjusted rate. This is your flatrate for the fiscal year. Depreciation Rate = Basic Rate x (1 + Adjusting Rate) + Bonus Rate Bonus Depreciation For reporting authorities that allow additional depreciation in the early fiscal years of an asset life, you can assign an additional bonus rate on top of the flatrate. Oracle Assets adds the bonus rate to the adjusted rate to give you the flatrate for the fiscal year.

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Flat-Rate Method Example

Flat-Rate Method Example

Finding the Annual Depreciation Rate The prorate date is the first day of the following month, 01-MAY-YYYY. The prorate date falls into prorate period five, in the period MAY-YY. The fraction of year held is 8/12. (May through December) Since the truck has been depreciated when placed in service, the number of periods to

spread depreciation over is 9. (April through December) Calculating Depreciation Depreciation rate = Basic rate (1 + Adjusting rate) + Bonus rate Depreciation rate = 0.10 (1 + 0.10) + .05 = 0.16 Annual depreciation = Depreciation rate Net book value* Fraction of year held Year 1 Depreciation = 0.16 6,000 (8/12) = $640.00 Depreciation per period = Annual depreciation/Number of periods MAY-YY Depreciation = 640/9 = $71.11 *Net book value = Recoverable cost Accumulated depreciation

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Guided Demonstration - Create a New Depreciation Method

Responsibility: Assets, Vision Operations (USA)

(N) Setup > Depreciation > Methods

1. Perform the following queries in the Depreciation Methods form to demonstrate some of the seeded methods. Select the (B) Rates where applicable to demonstrate the Depreciation Rates form.

Query 1 > Method = 150DB

Query 2 > Method = NL FLAT RATE

Query 3 > Method = UOP-HOURS

2. (I) New

3. Enter the following data: Field Name Value

Method XX_METHOD

Description Demo for Class

Life Years 3

Prorate Periods Per Year 2

4. Accept the default values for the other fields.

5. (B) Rates

6. Enter the following data: Year Period Annual

Rate

1 1 .5

2 1 .2

3 1 .2

4 1 .1

1 2 .5

2 2 .3

3 2 .2

4 2 0

7. (I) Save

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Practice - Create a New Depreciation Method

Overview

In this Practice, you will create a new Depreciation Method.

Assumptions

If you are not attending training at an Oracle University or Authorized Partner Education Center, you must have access to an Oracle Application Vision demonstration database or comparable training test instance on which to complete this Practice.

Use the Oracle

D50605 - Asset Management Fundametals

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Transcript of D50605 - Asset Management Fundametals