Capital Budgeting (Oracle Assets Help)


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Capital Budgeting

You can enter budget information manually, or you can maintain your budget information in another system and upload the information using the budget interface. You prepare and analyze your budget information on any feeder system and then automatically transfer it into Oracle Assets. You can use this information to project depreciation expense for your capital budgets and compare actual and planned capital spending in Oracle Assets.

After you create a budget book and budget assets, you can run budget reports and project depreciation expense for amounts budgeted to each category.

You can project depreciation expense on any of your budget books. You can enter budget information and create budget assets for each category from the information. Then you project depreciation for the budget assets in the budget book using the category default depreciation rules from the associated corporate book.

Compare Actual to Budgeted Spending to Plan Purchases

You can compare the cost of the assets you actually acquired in a period to the cost you budgeted for that period using the Budget-to-Actual Report. This report lists the actual and budgeted amounts for each category, and the percent variance between the two amounts. It also shows you how much you spent for each category for which you did not enter a budget amount.

Enter budget information either at the major category level, or for each full category flexfield combination. Enter a budget amount for each period.

You can create an asset in the budget book for each budget amount, category, and general ledger depreciation expense account you enter. The budget asset is placed in service in the period for which you specified the budget amount. The budget book depreciation calendar must be the same as the associated corporate book and can have up to twelve periods.

When you project depreciation, Oracle Assets projects depreciation for these budget assets, to the detail entered. It projects on a budget book based on the budget amounts you enter for each period. So, if you have entered budget amounts for a year in advance, the projection includes projected depreciation for additions during all twelve periods.

To run the Capital Spending Report, Oracle Assets requires full category flexfield combinations. However, when you compare spending using the Budget-to-Actual Report, Oracle Assets reports on the major category and cost center for each company, regardless of the budget information detail. The report compares budgeted and actual amounts for all categories for which there exists a budget, and it sums them by major category. It also sums the actual expenditures for non-budgeted categories by major category.

If you enter budget amounts for each major category, Oracle Assets projects depreciation expense using the depreciation rules from the major category where the other segments have a value such as NONE. To enter major category budget amounts for the purposes of depreciation projection, set up a category combination for the associated corporate book for each major category. Define the category using the major category value and a value such as NONE for the other segments. Specify the general depreciation rules for assets in this major category.

Note: The value NONE is an example of a dummy category; Oracle Assets does not compare budget amounts entered for this dummy category with actual expenditures in other categories with the same major category.

If you entered a budget amount for each full category combination, the depreciation program projects depreciation expense for each category using the depreciation rules from that category.

Capital Budgeting

Compare Actual to Budgeted Spending to Plan Purchases

See Also