Defining Oracle Assets for Mass Additions
Defining Oracle Assets is the most important phase of a conversion, so take sufficient care to make decisions that you can live with in the long term. Complete the following steps to define Oracle Assets before you begin importing your asset data:
During this phase, make important business decisions about how to define Oracle Assets and then actually perform the setup process.
1. Define your Account structure.
Most sites do not run Oracle Assets as a stand-alone system, so an account flexfield may already exist for your Oracle General Ledger. If you plan to run Oracle Assets as a stand-alone system, you need to define the account.
2. Define your location flexfield.
Most companies plan to do business internationally, if they do not already, so the location flexfield must begin with the country. State, possibly county, city, and site are the typical segments of a location flexfield. Many companies find it useful to pinpoint the exact building and room for some assets, for example, for barcoding. Add these segments if needed.
3. Define your category flexfield.
Most companies prefer to set up categories which match their chart of accounts. Each chart account defines a major category. Usually the first segment, or major category, corresponds to the asset accounts in the company's chart of accounts. Define at least one subcategory segment to allow for distinctions within a major category. You can define up to seven segments if necessary.
You probably want to set up no more than 3 category segments due to maintenance issues, and limited reporting space on Oracle Assets reports.
Potential uses for a subcategory segment include such information as personal/real, capitalized/expensed, owned/leased, project numbers, foreign, and luxury items.
4. Define your asset key flexfield.
A company may have a system for grouping similar assets. Many companies find it useful to group assets associated with a specific project, department, or location. For example, you can use the asset key flexfield to track your construction-in-process assets. Define an asset key flexfield that describes asset groups in your organization.
If you do not choose to track assets using the asset key, define a one segment asset key flexfield without validation. Then, when you navigate to the asset key flexfield on a window, the flexfield window does not open and you can return through the field. You can define up to ten segments for the asset key flexfield if required.
5. Define default locations, cost centers, asset key flexfield combinations and suppliers.
If you track this information electronically, set up each location, expense code combination, asset key flexfield combination, and supplier before import. If you do not already track this information, define default values. The defaults you define are used in place of actual values until the actual value is known.
Many companies do not currently track asset location. If you do not, then set up a default location to be used in the import. Once the assets are imported, you can locate the assets by performing an asset inventory and then transfer the assets from the default location to the actual location. If you already track location, then set up each location before import.
Some companies do not track assets on a cost center level. If you do not, then set up a default cost center for your incoming assets. To define the default cost center, create a code combination in each depreciation expense account for the default cost center. When you start tracking assets by cost center, you can transfer each asset from the default cost center the actual one. If you already track assets by cost center, create each expense account code combination.
- Default Asset Key Flexfield Combination
Some companies do not use the asset key flexfield. If you do not, then define a default combination to be used for incoming assets. Give the default combination an 'inactive date' so you do not use the combination accidentally at a future time. If you start using the asset key flexfield, you can change the combination from the default combination to the actual one. If you already use the asset key flexfield, create each asset key flexfield combination.
Many companies do not track suppliers on an asset level. If you do not, then define a default supplier to be used for incoming assets. Give the default supplier an 'inactive date' so you do not use the supplier name accidentally at a future time. When you start tracking asset suppliers, you can change the supplier from the default supplier to the actual one. If you already track asset suppliers, then enter all suppliers for all incoming assets. If you use Oracle Payables or Oracle Purchasing, your suppliers are already defined there and Oracle Assets shares the information.
6. Define when to perform the initial depreciation run.
Typically, the best time for the initial depreciation run after a conversion is the end of the fiscal year just before the current one. This year provides accumulated depreciation numbers that you can reconcile with your company's financial statements. It also ensures that the year-to-date numbers on your reports are correct during the current fiscal year.
Decide whether to enter assets with accumulated depreciation, or enter them without accumulated depreciation and let Oracle Assets calculate it for you. If you do not enter accumulated depreciation, Oracle Assets calculates the accumulated depreciation and revaluation reserve if necessary the first time you run depreciation. If you enter your assets with accumulated depreciation, Oracle Assets does not recalculate it, unless you make an adjustment to that asset. You must enter the correct accumulated depreciation.
Year-to-date numbers are important because the Depreciation program expenses all the catchup depreciation to the period in which it is run. If you enter your assets without accumulated depreciation, the first time you run depreciation, the depreciation expense is equal to the accumulated depreciation. The first period absorbs that one-time expense and, since the result from that period is not be posted to the general ledger, the general ledger is not affected and your year-to-date numbers in the next year are correct in Oracle Assets.
When you want to use the values for accumulated depreciation from the old assets system, you should start with the first period of the current fiscal year. Otherwise, your year-to-date values will not include the year-to-date depreciation you specify in the FA_MASS_ADDITIONS table.
You determine the initial depreciation period when you set up your books using the Book Controls window. Enter the period of your initial depreciation period in the Current Period Name field.
7. Define your asset numbering scheme.
Determine if you want to use your own asset numbering system, or if you want to use Oracle Assets automatic numbering system. In either case you must choose a starting value for automatic numbering in the System Controls window. Even if you do not use automatic numbering for the conversion, Oracle Assets uses the value internally as the ASSET_ID, so you must still choose the starting value carefully. You must use a value that is large enough to leave sufficient asset numbers unclaimed by automatic numbering. However, you cannot use asset numbers larger than 2,000,000,000.
If you do use automatic numbering, enter a value on the System Controls window that is the starting value you want to use plus the number of assets you are converting. By entering a value larger than you use for any conversion asset, you ensure that Oracle Assets does not try to assign an existing asset ASSET_ID to a newly added asset after the conversion. Using specific ranges of numbers for groups of assets makes it easier to keep track of related items.
8. Define your depreciation methods for all assets in all books.
Determine the depreciation methods for all assets in all books. Oracle Assets seeds most depreciation methods, but you must enter any customized method. Decide what depreciation method, prorate convention, and other depreciation rules will be used for each asset in each book. You must set up the depreciation methods and rates, depreciation ceilings, investment tax credit rates, prorate conventions, and price indexes you will need before you can define your categories.
9. Define your asset categories.
Use category names that match the corresponding chart asset account. Define subcategories so that all the assets in a subcategory have the same depreciation method, prorate convention, and other depreciation rules. For assets in your tax books that you acquired under different, past tax laws, you can set up the asset category with different depreciation rule defaults for different date placed in service ranges. The asset category and date placed in service determine the depreciation rule defaults for an asset.
You need to set up categories because the Mass Additions Posting program gets depreciation method information for each asset from the defaults defined in the Asset Categories window.
If you have only a few assets that use a particular depreciation method, you do not necessarily need to define a separate category for them. Instead, you can place them in another category and then manually change the depreciation information using the Books window before you run depreciation for the first time. Note that you should place these assets in a compatible category because the asset and reserve accounts are determined by your category choice, and the capitalize flag and the category type cannot be changed on the Books window.
For each book, create a plan to give all assets the correct depreciation information. Most assets should receive the correct information from the category books values. You can change the depreciation information for individual exceptions. Create your categories to minimize the number of individual transactions.
Try to keep the major category names short, ideally less than 20 characters, since Oracle Assets reports print only a limited number of characters for the category.
10. Define your Oracle Assets installation.
Complete the standard setup procedure with the information you obtained in the previous steps.
11. Define your asset key values.
Define values for your Asset Key flexfield that describe the different groups of assets within the company. Many companies find it useful to group assets associated with a specific project, department, or location. You can use the asset key flexfield to track your construction-in-process assets.
See Also
About the Mass Additions Open Interface
Planning Your Import
Loading Your Asset Data
FA_MASS_ADDITIONS Interface Table
Importing Your Asset Information
Finishing Your Import
