Setting Up Accounting Entry and Financial Processing for PeopleSoft Asset Management

This chapter provides an overview of accounting entry and financial processing and discusses how to:

• Define accounting entries.

• Define financial processing.

• Define document sequencing.

Understanding Accounting Entry and Financial Processing

PeopleSoft Asset Management provides the tools to create accounting entries and manage financial reporting for your enterprise. To enable these functions, you must first define the tables used to process accounting entries and financial processes.

You may be required to set up transaction processing with document sequencing. The document sequencing features in PeopleSoft help you to maintain established business practices by meeting these requirements.

Defining Accounting Entries

Use the following components to set up accounting entries:

• Asset Book (BOOK_DEFN1).

• Accounting Entry Template ID (AMAE_TMPL_ID_PNL).

• Accounting Entry Template (DIST_TEMPLATE_DEFN).

• Accounting Templates in Mass (RUN_AMAEMASS).

• Accounting Entry Templates Report (RUN_AMAE1000)

• Transfer Definition (IU_TRF_DEFN_TBL).

• Transaction Codes (TRANSACTION_CODE).

• Transaction Groups (TRANS_PNL_GRP).

• Book Code (BOOK_CODE).

• Acct (accounting) Template Book Code Reset (RUN_AM_BKC_RESET).

• ChartField Mapping Templates (AM_CF_MAPPING).

This section provides an overview of accounting entry options, lists the pages used to set up accounting entries, and discusses how to:

• Set up transaction codes.

• Set up accounting entry template IDs.

• Create accounting entry templates.

• Create accounting entry templates in mass.

• Set up InterUnit transfer definitions.

Understanding Accounting Entry Options

PeopleSoft uses tables to support accounting entries for PeopleSoft Asset Management. Some tables are required for accounting entry processing and are noted as such. All others are optional.

Accounting Books

Defining asset books is required for accounting entry processing. Asset books are used to store financial information about assets such as cost history, depreciation rules, and retirement information.

An unlimited number of asset books per business unit can be defined. The number of books that you use depends on your reporting needs. Using multiple books enables you to keep separate cost and depreciation rules for each asset. Typically, organizations use at least two books: corporate and tax, also known as financial and fiscal. Your organization may need additional books if it does business in more than one state or country or uses any of the United States-recognized special tax treatments of accelerated current earnings (ACE) and alternative minimum tax (AMT).

Note. The depreciation criteria for each book are specified when you add assets or create asset profiles.

Accounting Entry Templates

The Accounting Entry template is the central table used for creating accounting entries to general ledger journals. Each is defined by an accounting entry template ID. When you add an accounting entry template, PeopleSoft Asset Management populates it with standard accounting entry types, based on the asset category, cost type, and transaction type that you specify. It also identifies each entry as either a debit or credit.

To begin, create accounting entry template IDs and if applicable in your business, mark the cost types for impairment and revaluation. For the setID, create or select an existing accounting entry template to apply depreciation features and distribution methods. These features control what distribution types need to be set up in the accounting entry template.

PeopleSoft Asset Management enables you to create one or multiple accounting entry templates in a single operation. You may generate accounting entry templates for an asset category for all transaction types. You can generate templates for cost type, transaction code, and retirement disposal code.

Once you have defined the accounting entry template IDs, run the Create Accounting Templates in Mass Application Engine process (AMAEMASS) that generates accounting entry templates for all transaction types and user-defined cost type, transaction code, and disposal code.

Multiple GAAPs and Book Codes

PeopleSoft delivers the ability to book accounting transactions according to different and often conflicting accounting principles for one Business Unit in one ledger and to maintain these entries in compliance with the rules of government and regulatory organizations. You can add book codes for PeopleSoft Asset Management to facilitate accounting entry processing.

Generally accepted accounting principles (GAAP) as determined in one country or jurisdiction often vary from country to country or by self-governing accounting bodies and jurisdictions. Consequently, organizations record and report their operations according to local accounting requirements as well as by rules applicable to parent corporations that are often under the rules of another national jurisdiction. PeopleSoft has provided the ability to maintain separate ledgers and ledger groups for different accounting principles, record transactions under varying statutory rules using Alternate Account and using MultiBook in PeopleSoft General Ledger and its subsystems for its automatic synchronization capabilities. A sometimes much favored method, especially within financial organizations, is defining book codes. This method enables you to simultaneously generate in one business unit and ledger all the relevant accounting entries for a transaction that addresses different local and corporate accounting rules.

You can use book codes to simultaneously generate sets of entries to record related transactions according to multiple GAAPs for the same business unit in the same ledger. For example, where local and corporate accounting principles are not compatible, you define a local (L) and a corporate (C) book code. For those situations where requirements are alike, you define a code for both (B). You can attach these book codes to accounts as attributes. This results in separate permutations of accounts and book codes in which you simultaneously record related transactions under local, corporate, or both rules. You can choose to associate a single book code with one account value. Using this method, a unique account value must be created for each book code.

See Managing Multiple GAAPs and Prior Period Adjustments.

Prerequisites

Before you can define accounting entry processing, you must first complete the following task:

• Define overall installation options to enable Book Code functionality. Use the Installation Options Overall (INSTALLATION_FS1) page.

• Define ChartField accounts.

• Define journals, ledgers and ledger groups.

Pages Used to Define Accounting Entry for PeopleSoft Asset Management

Setting Up Transaction Codes

Access the Transaction Codes page.

Trans Code (transaction code)

Enter a transaction code that identifies special asset transactions and that are used in combination with actions to create accounting entries. You can modify these codes by changing the description and short description. The transaction code associated with revaluation displays revaluation related distribution types for additions.

When you define accounting entry options for a book, you can choose to distribute by disposal code. If you choose this option, the disposal code appears by default as the transaction code. In this case, you must use the transaction codes from the delivered tableset defined for the tableset that you are using. You must also define corresponding accounting entry templates.

Note. The standard transactions are predefined and delivered with. To modify the transaction types, use the Asset Management (INSTALLATION_AM) page of the Installation Options (INSTALLATION) component.

See Defining Asset Management Installation Options.

Setting Up Accounting Entry Template IDs

Access the Accounting Entry Templates ID page.

(FRA) Derogatory Depreciation	Select to accumulate derogatory depreciation. Used in France, derogatory depreciation represents the difference between two methods of depreciation (usually straight-line versus declining balance) applied to the same asset, where one method best reflects the economic depreciation and the other is used for tax reporting purposes.
(USF) Like Kind Exchange	Select to accumulate like kind exchange in support of the US 1031 Like-Kind Exchange guidelines issued by the Internal Revenue Service (IRS). Note. Selecting this check box results in unrecognized gain and loss.
Revaluation	Select to accumulate differences derived from revaluation of tangible fixed assets and financial assets. This option not available if you have not selected the revaluation option on the Installation Options — Asset Management page.
Book Code	Select this check box to apply book code to this accounting entry template ID. If it is not applicable, all generated entries will be created with no Book Code and all entries will post to General Ledger. If it is applicable, the book code functionality will be applied either for every book or none of them in the same ledger group by default.
Create Gain/Loss Lines	Select this distribution method to distribute the accounting entries created by the template to gain and loss totals. There are two general methods of registering a fixed asset's sales. Create Gain/Loss Lines is used to reflect in only one account the gain or loss that the sale transaction represents for the company.
Create Net Book Value lines	Select this distribution method to distribute the accounting entries created by the template to net book value totals. There are two general methods of registering a fixed asset's sales. Create Net Book Value lines is used to reflect the proceeds of the sale in one account and the cost of sold asset in the other account. The PeopleSoft system provides the flexibility to generate entries for the wanted method.

Note. When setting up a new template or changing a template ID on a template that previously used either Gain/Loss or Net Book Value distribution, you may see a warning that the previous templates will be deleted. You have the option to go back and update the template instead.

See Also

Using the Global Features of PeopleSoft Asset Management

Creating Accounting Entry Templates

Access the Accounting Entry Template page.

Set up an accounting entry template for each possible combination of:

• Asset category.

• Cost type.

• Transaction type.

• Transaction code.

• Accounting entry template ID.

Note. If you enter an asset into your system by using a combination of these values for which no accounting entry template exists, your accounting entry process fails when you next attempt to run it.

For each accounting entry type, select:

Accounting Entry Types

Accounting entry types are set by the system. Each asset event has an associated set of accounting entry types.

For each possible combination of category, cost type, and transaction code, you must set up an accounting entry template for each of the following transaction types:

• ADD: Additions.

• ADJ: Adjustments.

• TRF: Transfers.

• RCT: Recategorizations.

• DPR: Depreciation expenses.

• PDP: Prior period depreciation.

  Note. The DPR and PDP transaction types are used only on an accounting entry template with a blank transaction code.

• RET: Retirements (also used for processing reinstatements).

• LPY: Lease payments.

• INF Inflation adjustment.

Book Code

Specify a book code for each account value.

The Allow Book Code Override option that is set on the Account (ACCOUNT) page determines whether this book code can be overridden on the transaction line. The Effective Date and Status fields on the Account page must match the settings for the account values to which the book code is attached. Assets take the most recent and active date to populate its templates. To avoid any situation where Book Code might generate unbalanced entries in General Ledger, a warning message is generated when the template is saved when there are paired distribution types with different Book Codes. Paired distribution types are those distribution types that play against other in order to balance the entry.

Creating Accounting Entry Templates in Mass

Access the Accounting Templates in Mass page.

When you begin the process, the page displays your request ID and default process frequency. Select the setID, account entry template ID, and category. Three actions can be carried out:

Distribution Options

The page displays a distribution type list and corresponding account and alternate account specific to the template ID or category selected. The list is refreshed when these values change.

If Book Code functionality is set up at Accounting Entry Template ID level, the book code related to the account displays. The Allow Book Code Override option set on the Account page determines whether the book code can be overridden for each distribution type. This process populates the book codes using the criteria defined for the Accounting Entry Template.

If the book code column does not display, it is not selected at Accounting Entry Template ID level. The template uses the book code based on the accounts effective date set in the Account definition page.

SetID Options

The page includes expandable subpages of options determined by setID.

See Also

Creating PeopleSoft Asset Management Accounting Entries

Setting Up InterUnit Transfer Definitions

Access the InterUnit Transfer Definition page.

To begin, from the search dialog page, select the books used by the To Business Unit business unit.

InterUnit transfer definitions act as templates to simplify performing InterUnit transfers.

InterUnit transfer definitions tell the system which books exist for the transfer from and transfer to business units, and what type of transactions the InterUnit transfer should generate for each book. If you are planning to perform many InterUnit transfers, it helps to first define all the possible InterUnit transfers.

For example, if you have three business units, US001, US002, and US003, and you expect to perform all possible InterUnit transfers, you would set up these six InterUnit transfer definitions:

When transferring from a business unit with two books to a business unit with three books, enter information into the extra To Book by using either the Add Book action or the Transfer Book action.

For example:

The transactions generated to pass book information for InterUnit transfers differ depending on how many To Book entries a From Book is passing information to, and whether it is passing the information by using a transfer action or an add book action.

Note. Assets that are transferred to new business units by using the add action will have a cost row of zero on the new business unit until you run the Depreciation Calculation process (AM_DEPR_CALC). Running this process updates the asset’s cost row with its net book value from the From Book.

When you use an asset profile, the book information appears by default from the profile.

Using a From Book Once

When a From Book is used once only, an add action generates a retirement for the From Book and an add to the To Book. A transfer action generates a transfer out for the From Book and a transfer in for the To Book.

The asset that is retired receives an asset status of Disposed.

Assets that are transferred between books by using the transfer action receive a status of Transferred:

Using a From Book for Two or More Transfers

When a From Book is used for two or more transfer book actions, only one transfer out transaction is generated. Because this takes care of the cost on the From Book, no additional transfer outs are generated for that book.

Assets that are transferred between books by using the transfer book action receive a status of Transferred:

Using a From Book for Both Transfer and Add

When a From Book is used for both a transfer and an add action, a transfer out is generated for the Transfer Book. Because this takes care of the cost on the From Book, the add action does not generate a retirement for that book.

Assets that are transferred between books by using the transfer book action receive a status of Transferred:

Using a From Book for Two or More Adds

When a From Book is used for two or more add actions, a retirement is generated for the first add action. Because this takes care of the cost on the From Book, no further retirements are generated for it.

The asset that was retired receives a status of Disposed:

Note. When you transfer from a business unit with three books to a business unit with two books, the cost information on the extra From Book is automatically retired. You do not need to enter an action.

See Adjusting, Transferring, and Evaluating Assets.

Retiring a Book

Assets that are retired receive a status of Disposed:

See Retiring Assets.

Defining Financial Processing for PeopleSoft Asset Management

Use the Asset Categories (CATEGORY_DEFN) component and the Capitalization Limits (DEPR_CAP_LIMIT) component to define financial processing in PeopleSoft Asset Management.

This section provides an overview of financial processing, lists the pages to define financial processing and describes how to:

• Define asset categories.

• Set up capitalization limits.

Understanding Financial Processing in PeopleSoft Asset Management

PeopleSoft Asset Management enables you to apply various attributes to assets for financial reporting purposes, such as categories, cost types, financing codes, and indexes. The purpose of defining these asset attributes to help in refining asset information into meaningful information blocks.

The combination of asset category and transaction code determines into which accounts an asset transaction is entered. Asset category is required.

To group assets by class for reporting or informational purposes only, use the asset class field.

Cost types represent different cost components of an asset, such as materials, labor, and overhead. For example, you can differentiate between the cost of building an asset and its market value by allocating the cost of production to one cost type and the margin of profit to another cost type. Cost type, in combination with asset category and transaction code, determines into which accounts the costs are entered in the general ledger.

Use indexes to remeasure assets according to set percentages. An index may consist of several subindexes, each of which has a separate index amount. You can set up a subindex for each asset category, with amounts that correspond to the inflation or valuation percentages for that year.

You also use indexes and subindexes to calculate replacement costs for assets. Tying an index, such as the consumer price index (CPI), to an asset profile enables replacement cost to be updated in adjustment, partial InterUnit transfer, partial retirement, and partial reinstatement transactions. Revaluation indexes are usually dictated by regulatory agencies, but you can also set up your own.

PeopleSoft Asset Management validates capitalization limits when you add assets. At the business unit or book level, indicate whether validation should occur against a specific limit or against a table where you have stored step limit amounts and specified various messages for assets whose costs fall below these steps. You can also specify incremental valuation thresholds that identify the asset as a low value asset and how it should be treated during processing.

The capitalization limit table accommodates the processing requirements of various countries. In some countries, a low value asset must be fully depreciated in the year of acquisition; in others, a low value asset may be added but must be taken as an expense.

Pages Used to Define Financial Processing

(Required) Defining Asset Categories

Access the Category page.

Complete the appropriate fields for each asset category. Identify the depreciable status and whether the asset category is for intangible or leased assets. You can optionally associate inflation processing information with the category.

Defining Cost Types

Access the Cost Types page.

Impairment Process	Select to use this cost type for impairment. Selecting this check box displays impairment related accounts at the accounting entry template level. This field is not displayed if impairment options are not selected on the Installation Option — Asset Management page. Note. This option cannot be selected with the Revaluation Process option for a single cost type.
Revaluation Process	Select to use this cost type for revaluation. Selecting this check box displays revaluation related accounts at the accounting entry template level. This field is not displayed if revaluation options are not selected on the Installation Option — Asset Management page. Note. This option cannot be selected with the Impairment Process option for a single cost type.

Note. When selecting a cost type for impairment or revaluation you should update the accounting entry templates because new accounting entries need to be set up for these transactions.

Setting Up Capitalization Limits

Access the Capitalization Limit CD page.

Complete the applicable fields, and select the Low Value Switch check box to identify which limit amount triggers low value asset reporting. This is used only in certain countries.

For example, you might set up capitalization limits for Germany. Using the Cap Limit table, you can set up your system so that assets with a cost less than 800.00 EUR could be added, but the system would generate a warning that the cost was below the capitalization limit; likewise, assets with a cost less than 100.00 EUR could not be added and would generate an error message.

See Also

Processing Low-Value Assets

Defining Document Sequencing

Use the Document Type Template (AM_DOCTYPE_TMPL) component to define document sequencing.

This section provides an overview of document sequencing for PeopleSoft Asset Management, lists pages used to set up document sequencing, and describes how to define Document Sequence Type Templates.

Understanding Document Sequencing for PeopleSoft Asset Management

Statutory requirements in some countries require that all financial transactions (documents) be classified into different transaction types, and that within each transaction type, all documents entered be numbered sequentially. The document sequencing feature helps you maintain established business practices by meeting both of these requirements.

Document sequencing is available for transactions that you create either online or through background (batch) processing. When you activate document sequencing, the system automatically assigns a sequence number to each document (invoice, voucher, journal, and so on) that you create. You can also enter sequence numbers manually. When you delete, change, or unpost a document, the system may generate additional document sequence numbers, as appropriate.

PeopleSoft Asset Management uses the Document Type Template (AM_DOCTYPE_TMPL) page to add and maintain document types relevant to specific asset categories or transactions. Before you can establish a document type template, you must first establish the following:

• The Document Sequence Range (SEQ_RANGE) page maintains the sequence number range; the range is user-defined, and often based on an annual (AN) or monthly (MN) counter.

• Use the Journal Code (JRNL_CODE) page to define journal codes, specify sequence ranges, and determine how document sequence numbers are assigned for each journal code.

• The Document Type (DOC_TYPE) page establishes document sequencing options for PeopleSoft Asset Management business processes that generate financial transactions. This is the equivalent of the Journal Type used by General Ledger.

Document sequencing occurs at either the journal code level or the document type level within a journal code. If sequencing occurs at the journal code level, all document types within a journal code share the same sequence numbers. If sequencing occurs at the document type level, each document type has its own sequence numbers. This is determined by the Sequence By field on the Journal Code table. In PeopleSoft Asset Management, this is defined on the Document Type Template (AM_DOCTYPE_TMPL) page.

Document sequencing can either be set to manual or automatic. In the case where the document sequence allows for manual entry, the system validates the number to ensure that the number falls within the appropriate range and is unique. If the option has been set to automatic, the system selects the next available number in the sequence. If the option is set to manual without entering a value, an error is generated. In cases where the option is set to manual, and a batch process inserts the sequence number, the batch process generates the numbers sequentially and the numbers can not be altered.

As transactions with document sequencing occur through online processing and from batch processes such as the transaction loader process (AMIF1000), the PeopleSoft Asset Management document sequencing table (AM_DOC_SEQ) stores the transaction data by row. This table joins with the PS_DIST_LN table so that the entries are created in General Ledger. If journals are created through the Journal Generator process from subsystem accounting entries, document sequence numbers are already assigned when the option to retain detail is selected. Assigned document sequence numbers are carried forward to the journal lines. When the summarization option is selected, document sequencing field values are left blank

The document sequence page (AM_DOC_SEQ) is used throughout the PeopleSoft Asset Management application where a financial transaction occurs: Express Add, Basic Add, Cost Transfer/Adjust, Leases, Copy Assets, Adjust Accumulated Depreciation, Update/Delete Pending Transactions, Impairment, and Retirement. Each page displays a document sequencing tab for the entry and allows you to view, enter or override document sequence information.

When using multiple ledger groups with multiple ledger assigned, the following rules apply: If the Keep ledgers in synch(KLS) option is enabled, the ledger group will maintain the same sequencing number across ledgers. Only the primary ledger group/ledger combination will have a unique sequencing number. If KLS is not enabled, then both ledgers assigned to the ledger group have different sequence numbers. If multiple ledger groups are assigned to a business unit, even with KLS on, the ledger groups would have different sequence numbers. They can independently have KLS enabled or not.

This table shows the details associated with each component, page or process where access to document sequencing is available.

A Parent asset that disposes, transfers or makes recategorizations to its children can have a different document type from its defaulted one. You can manually override it but the child assets inherit the parent asset document type. In such a case, the document type needs to be defined as automatically generated.

Group assets are treated as one entity for the purpose of depreciation, but as multiple entities for all other purposes. Therefore, these assets do not generate a different sequence number at asset level. For any other transactions, they are treated as ordinary assets. AMDPCGRP defines the sequence to be given to that transaction based on the accounting entry template selected. For transfers by Group ID, the system generates sequenced numbers for the transfer out transaction. The transfer in transaction is handled by GL in the same manner as a regular InterUnit transaction.

No transaction detail is carried by individual composite members. All transaction detail, including any gain or loss accrued upon retirement, is rolled up to the composite asset level. Once this roll up occurs, no transaction detail is retained by composite members. Composite assets will be treated as ordinary assets but not their members. These do not generate sequenced numbers.

Joint Ventures are not supported for participant business units.

Prerequisites

Before you can begin using the Document Sequencing feature in PeopleSoft Asset Management, you must:

1. Enable document sequencing at the installation level.

   The system does not perform any document sequencing functions unless you select the Document Sequencing option on the Installation Options - Overall page.

2. Enable document sequencing at the PeopleSoft General Ledger business unit level.

   Once you enable document sequencing at the installation level, activate it for designated General Ledger business units on the General Ledger Definition page.

3. Specify a document sequence range.

4. Define the journal types and journal codes.

5. Define the document types.

Document sequencing uses the following components:

• Journal Type (JRNL_TYPE)

• Journal Code (JRNL_CODE)

• Document Types (DOC_TYPE)

• Sequence Range (SEQ_RANGE)

See Setting Installation Options for PeopleSoft Applications.

See Defining Document Sequencing.

See Defining General Ledger Business Units.

See Establishing PeopleSoft Asset Management Business Units.

Pages Used to Define Document Sequencing for PeopleSoft Asset Management

Defining Document Type Templates

Access the Document Type Template page.

Assign document types to be used by default by document sequencing for asset categories and asset transaction codes.

Note. If you are using revaluation, you need to define a template for the revaluation transaction code.