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Oracle Public Sector Financials (International) Implementation Guide
Release 12.1
Part Number E13417-04
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Inflation Accounting for Assets Setup

Overview

Inflation Accounting for Assets provides the functionality to support revaluation of fixed assets and associated accounting entries. This is part of the UK government’s initiative on resource accounting and budgeting.

Setting Up Price Indexes

Price indexes represent the rate of change in the value of assets. Multiple price indexes can be set up, and linked to appropriate asset categories.

Price indexes can be updated as necessary. Estimates of anticipated price index changes can be entered and used in the Inflation Accounting Projection report. This report displays future depreciation charges for assets based on estimated price indexes.

Inflation Accounting Options

The Inflation Accounting Options window enables corporate books to be used with inflation accounting. You can perform these tasks:

For information on setting up or modifying assets, see Changing Asset Details, Oracle Assets User Guide.

Setting Up the Import/Export Process

Inflation Accounting for Assets includes migrating from Modified Historic Cost Accounting and corporate books in Oracle Assets. These profile options are available:

For information on the migration process, see Inflation Accounting for Assets Implementation Procedures.

For information on the Web ADI solution, see Oracle Web Applications Desktop Integrator User Guide.

Prerequisites

Before implementing Inflation Accounting for Assets, you should read the Inflation Accounting for Assets process information.

For information on inflation accounting, see Inflation Accounting for Assets Process, Oracle Public Sector Financials (International) User Guide.

Inflation Accounting for Assets Setup Steps

This table describes the setup steps for Inflation Accounting for Assets which include Oracle Assets and General Ledger setup.

Step Number Step Description Required or Optional
1 Descriptive Flexfield Concepts, Oracle Applications Flexfields Guide Optional
2 Account Generator. See Overview of the Account Generator, Oracle Applications Flexfields Guide Required
3 Define Default Accounting Rules Required
4 Asset Key Flexfields.
See Key Flexfield Segments Window, Oracle Applications Flexfields Guide
Required
5 Asset Category Flexfields. See Segment Values Window, Oracle Applications Flexfields Guide Required
6 Location Flexfields. See Segment Values Window, Oracle Applications Flexfields Guide Optional
7 Set UpProfile Options Required
8 Define Ledgers.
See Ledgers Window, Oracle General Ledger User Guide
Required
9 Define Journal Sources, Oracle General Ledger User Guide Required
10 Define Journal Categories, Oracle General Ledger User Guide Required
11 Define Unit of Measure Classes, Oracle Inventory User's Guide Optional
12 Define Unit of Measure Classes, Oracle Inventory User's Guide Optional
13 Define Suppliers, Oracle Payables User Guide Optional
14 Enter Person, Oracle HRMS HR Foundation Optional
15 Set Up Security, Oracle Human Resources Management Systems User's Guide Optional
16 Set Up Numbering.
See Specifying System Controls, Oracle Assets User Guide
Optional
17 Specifying System Controls, Oracle Assets User Guide Required
18 Define Locations, Oracle Assets User Guide Required
19 Define Asset Keys, Oracle Assets User Guide Optional
20 Enter Quick Codes, Oracle Assets User Guide Optional
21 Create Fiscal Years, Oracle Assets User Guide Required
22 Specify Dates for Calendar Periods, Oracle Assets User Guide Required
23 Set Up Security by Book, Oracle Assets User Guide Required
24 Define Book Controls.
See
Asset Books Setup, Oracle Public Sector Financials (International) User's Guide,
Historic or Corporate Books Setup, Oracle Public Sector Financials (International) User's Guide, and
Defining Depreciation Books, Oracle Assets User Guide.
Required
25 Enable Intercompany Accounting.
See Entering Accounting Rules for a Book, Oracle Assets User Guide
Optional
26 Define Additional Depreciation Methods, Oracle Assets User Guide Required
27 Set Up Depreciation Ceilings, Oracle Assets User Guide Optional
28 Investment Tax Credit.
See Tax Workbench, Oracle Assets User Guide
Optional
29 Specify Dates for Prorate Conventions, Oracle Assets User Guide Required
30 Define Price Indexes, Oracle Assets User Guide Optional
31 Set Up Asset Categories, Oracle Assets User Guide Required
32 Define Distribution Sets, Oracle Assets User Guide Optional
33 Enter Leases, Oracle Assets User Guide Optional
34 Define Asset Warranties, Oracle Assets User Guide Optional
35 Insurance.
See Fixed Assets Insurance Window Reference, Oracle Assets User Guide
Optional
36 Set Up Calendar Price Indexes for Inflation Accounting Procedure Required
37 Enable Corporate Books Required
38 Specify Directory Location for Export/Import Data Files Optional

Define Default Accounting Rules

Oracle Assets includes the following Application Accounting Definitions (AAD):

Inflation Accounting for Assets does not use the default subledger accounting method and, therefore, you must modify the seeded subledger accounting method and assign the new AAD to Oracle Assets. The Assets Standard Accounting with Inflation Accounting AAD is the same as Assets Standard Accounting Application Accounting Definition except for a new Journal Line Definition (JLD) called Inflation Standard Accounting JLD, which performs additional calculations for inflation by creating a common set or subset of journal entries for each event. The Journal Line Definition applies to all event classes and event types.

The following table describes the journal line types that are defined and assigned to the Inflation Standard Accounting JLD:

Journal Line Type Debit (Dr) or Credit (Cr)
Cost Dr
Depreciation Expense Dr
Depreciation Reserve Cr
Backlog Reserve Cr
Operating Expense Dr
General Fund Cr
Revaluation Reserve Cr
Revaluation Reserve Retire Cr

The following are the default account derivation rule for each journal line type:

Journal Line Type Account Derivation Rules
Cost CCID defined for Asset Category
Depreciation Expense CCID defined for Asset Category
Depreciation Reserve CCID defined for Asset Category
Backlog Reserve CCID defined in Inflation Accounting Options for an Asset Category
Operating Expense CCID defined in Inflation Accounting Options for an Asset Category
General Fund CCID defined in Inflation Accounting Options for an Asset Category
Revaluation Reserve CCID defined in Inflation Accounting Options for an Asset Category
Revaluation Reserve Retire CCID defined in Inflation Accounting Options for an Asset Category

The following are the seeded journal entry descriptions from source:

Accounting Methods Builder (AMB) Overview, Oracle Subledger Accounting Implementation Guide

Application Accounting Definitions, Oracle Subledger Accounting Implementation Guide

Subledger Accounting Method, Oracle Subledger Accounting Implementation Guide

Journal Line Types, Oracle Subledger Accounting Implementation Guide

Account Derivation Rules, Oracle Subledger Accounting Implementation Guide

Journal Entry Descriptions, Oracle Subledger Accounting Implementation Guide

Event Models

Accounting events are transactions that have a financial accounting impact. Examples of accounting events are issuing an invoice and disposing an asset. Financial accounting information are recorded for these events. Accounting events must be captured when transactions are committed in the subledgers. Accounting events are categorized into event types. Event types are grouped into event classes that in turn are grouped into event entities.

Inflation Accounting for Assets uses the following event entities of Oracle Assets:

Inflation Accounting for Assets uses the following event classes of Oracle Assets in addition to its own event class Inflation Revaluation:

Note: Inflation Accounting for Assets creates a process category called Inflation Revaluation for its event class.

Inflation Accounting for Assets uses the following event types of Oracle Assets in addition to its own event type Inflation Revaluation:

Event Model, Oracle Subledger Accounting Implementation Guide

Setting Up Calendar Price Indexes for Inflation Accounting

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To set up calendar price indexes for inflation accounting:

  1. Navigate to the Setup Calendar Price Indexes window.

  2. Enter a unique price index name.

    Note: The price index cannot be modified if it is associated with an asset category.

  3. In the Calendar field, select a calendar type to link to the price index. Duplicate calendar types cannot be attached to the same price index.

    In the Price Index Values region, the Date From and Date To fields are automatically populated.

  4. In the Value field, overtype the initial value and enter a price index value for the displayed dates.

    Note: Early unwanted periods can have an initial value of 9999.99 if there are valid index values for the earliest date placed in service of any asset to be used with an asset category that uses this price index. If no price index values exist for the earliest date in service and the assets become part of a periodic revaluation (at depreciation runtime) or occasional revaluation, the revaluation process will fail.

Enabling Corporate Books

the picture is described in the document text

To enable corporate books for use with inflation accounting:

  1. Navigate to the Inflation Accounting Options window.

  2. Select a corporate book.

  3. In the Journal Source field, select a source.

    Note: The default value is inflation accounting. The journal source cannot be changed once saved.

  4. In the Reval Period for Catchup field, select a fiscal period number for the book.

  5. Select the Journal Categories tab.

  6. In the Depreciation field, select a depreciation journal category.

  7. In the Revaluation field, select a revaluation journal category.

  8. In the Transaction field, select a transaction journal category.

  9. Select the Asset Categories tab.

  10. In the Category field, select a major and minor asset category flexfield.

  11. In the Backlog Account field, select a backlog account flexfield combination.

  12. In the General Fund field, select a general fund flexfield combination.

  13. In the Operating Account field, select an operating expense account flexfield combination.

  14. In the Reval Reserve field, select a revaluation reserve flexfield combination.

  15. In the Reval Reserve Retired field, select a retired revaluation reserve flexfield combination.

  16. In the Price Index Name field, select a price index if Allow Indexed Reval is selected.

  17. To enable indexed revaluation, select Allow Indexed Reval.

    Note: If the Allow Indexed Revaluation profile option is set to No, deselect it.

  18. To enable professional revaluation, select Allow Prof Reval.

    Note: If the Allow Professional Revaluation profile option is set to No, deselect it.

Note: All asset categories assigned to an asset corporate book should be assigned in the Inflation Accounting Options window if assets categories are selected as part of the Inflation Accounting revaluation process. If unassigned, the revaluation process will fail.

Specifying Directory Location for Export/Import Data Files

To specify the directory location for exporting and importing data files during Inflation Accounting for Assets implementation:

  1. Navigate to the Profile window.

  2. Select User.

  3. Select the user name.

  4. In the Profile field, select Inflation Accounting: Implementation Import/Export File Location.

  5. Click Find.

  6. In the Site field, enter the full pathname of the directory location in which to store the export and import data files, for example, /home/user/IHP/.

Specifying Method for Exporting/Importing Data Files

To specify the method for exporting and importing data files during Inflation Accounting for Assets implementation:

  1. Navigate to the Profile window.

  2. In the Profile field, select Inflation Accounting: Use WebADI to Import/Export.

  3. Click Find.

  4. In the Site field, select Yes to import and export data using a WebADI spreadsheet template.