Creating journal entries is a two step process:
1. At the end of each accounting period, run the depreciation program for each of your books. Running the depreciation program closes the current period and opens the next period.
2. Run the Create Journal Entries program to create journal entries to your general ledger. Run it once for each period in each book for which you allow posting to the general ledger. You can create journal entries for any period for which you have run depreciation for which you have not already created journal entries.
The create journal entries process creates journal entries for the appropriate general ledger set of books. You can review these journal entries in the general ledger and post them.
Adjusting Journal Entries
Prior Period Transactions
Oracle Assets creates adjusting journal entries to depreciation expense and accumulated depreciation accounts when you enter prior period additions, transfers, or retirements:
- For a prior period addition, Oracle Assets creates journal entries for the missed depreciation
- For a prior period transfer, Oracle Assets reverses a portion of the depreciation expense posted to the "from" depreciation expense account and posts it to the "to" depreciation expense account
- For prior period retirements, Oracle Assets creates journal entries that reverse the depreciation taken for periods after the retirement prorate date
Oracle Assets creates separate journal entries for adjustments to depreciation expense and current period depreciation. You can review the effect of your adjustment transaction and your current period depreciation expense separately in the general ledger.
You can create journal entries for any general ledger. If you do not use Oracle General Ledger, you can copy the journal entry information from the GL tables.
Oracle Assets creates journal entries for the following general ledger accounts:
- Cost of Removal Gain, Loss, and Clearing
- Deferred Accumulated Depreciation
- Deferred Depreciation Expense
- Net Book Value Retired Gain and Loss
- Proceeds of Sale Gain, Loss, and Clearing
Debit (Dr.) A debit to the asset cost, asset clearing, CIP cost, CIP clearing, depreciation expense, proceeds of sale clearing, or intercompany receivables account is an addition to the account. A debit to the accumulated depreciation, cost of removal clearing, or intercompany payables account is a subtraction from the account. In the journal entry examples, debits are in the left column.
- Revaluation Reserve Retired Gain and Loss
Credit (Cr.) A credit to the accumulated depreciation, cost of removal clearing, or intercompany payables account is an addition to the account. A credit to the asset cost, asset clearing, CIP cost, CIP clearing, depreciation expense, proceeds of sale clearing, or intercompany receivables account is a subtraction from the account. In the journal entry examples, credits are in the right column.
After sending journal entries from Oracle Assets to your general ledger, you can review or modify journal entries in your general ledger before posting them.
If you integrate Oracle Assets with Oracle General Ledger, use the Enter Journals window in Oracle General Ledger to review, change or correct your entries.
If you use a different general ledger, you can review or change entries in that general ledger.
Journal Entry Examples
This guide contains examples of asset transactions you can perform and the journal entries that Oracle Assets creates.
The journal entries are for the period that the asset transaction was entered into Oracle Assets. Oracle Assets creates these journal entries when you run the Create Journal Entries program.
The asset cost, accumulated depreciation, and year-to-date depreciation numbers in the following tables are end of quarter balances. The depreciation expense numbers are per period.
Journal Entry Transaction Examples:
Creating Journal Entries for the General Ledger
Using the Account Generator to Generate Account Combinations