Skip Headers

Oracle Financials for the Americas User Guide
Release 12.1
Part Number E13422-03
Go to Table of Contents
Contents
Go to previous page
Previous
Go to next page
Next

Chile

Oracle General Ledger

Inflation Adjustment Overview

In Chile, companies must adjust non-monetary accounts for inflation and report the inflation-adjusted balances to the government. Oracle General Ledger for Chile provides three methods for you to adjust your accounts for inflation: adjusting balances based on a price index, revaluing balances based on a direct foreign exchange rate, and revaluing balances based on a foreign exchange rate using a stable currency. Each of these three methods satisfies a different set of business requirements.

When you adjust your non-monetary accounts at the end of the month, choose the method that meets your requirements according to your ledger currency, the currency that the transactions are entered in, your industry, and the type of account that you want to adjust.

For more information, see Adjusting Balances Based on a Price Index and Revaluing Balances Based on a Foreign Exchange Rate.

Choosing an Inflation Adjustment Method

Follow these steps to choose an inflation adjustment method and the path you might take to choose an inflation adjustment method for each account.

  1. Determine if this account is non-monetary. If the account is non-monetary, you do need not perform inflation adjustment.

  2. Determine if the ledger currency is Chilean pesos. If the ledger currency is not Chilean pesos, you must revalue the balance at the end of the month based on the direct foreign exchange rate.

  3. Find out if the transactions are entered in Chilean pesos. If transactions are not entered in Chilean pesos, adjust the account at the end of the month using the price index inflation adjustment method.

  4. Determine if the company is in the banking or insurance industry. Otherwise, the account balance must be revalued at the end of the month based on the foreign direct exchange rate.

  5. Determine if the account is classified as a revenue or expense account and revalue the account balance at the end of the month based on the foreign exchange rate using a stable currency. Otherwise, revalue the account balance at the end of the month based on the foreign direct exchange.

Adjusting Balances Based on a Price Index

Oracle General Ledger for Chile provides a method for you to adjust your non-monetary accounts for inflation based on a price index. The price index values are used to calculate the correction factor that represents the inflation rate. Oracle General Ledger multiplies the historical balances by the correction factor to find the adjusted balances. You can use this method when your ledger currency and the currency that you enter your transactions in are both your local currency.

Prerequisites

The Chilean government only requires companies to report inflation-adjusted balances; you do not need to report historical balances. You can satisfy Chilean reporting requirements by keeping your transactions in a single ledger that you adjust for inflation. Follow the prerequisite steps for the adjusted-only option described in the Common Country Features topics in this guide.

Defining Inflation Ratio Precision

In Chile, companies are legally required to calculate inflation rates with a precision of three decimal positions. To meet this requirement, you must define the JL: Inflation Ratio Precision profile option in the System Profile Values window of the System Administrator responsibility before you use the price index inflation adjustment method for Chile. Assign this profile option a value of 3.

Using Inflation Adjustment Based on a Price Index

Example for adjusting balances based on a price index

This example shows how inflation rates and adjustment amounts are calculated to adjust account balances based on a price index. Assume that the ledger currency for this company's ledger is Chilean pesos and that the account balances are composed of amounts entered in Chilean pesos. Assume also that the year end for the company is December 31, 2000.

This table shows price index values for this example:

Period Price Index Value
Nov 100
Dec 101.1
Jan 102.5
Feb 103.4
Mar 106

The correction factors for the inflation rates are calculated with a precision of three decimal positions. The calculations are based on this formula:

Correction Factor = (Index Value for Month Before Last Month of Period Range / Index Value for Month Before First Month of Period Range) - 1

This table shows correction factors for this example:

Period Range Correction Factor (Inflation Rate)
Dec-Apr 0.060
Jan-Apr 0.048
Feb-Apr 0.034
Mar-Apr 0.025

Assume that the Period To Date (PTD) and To Date (TD) balances of the Goodwill account are as shown in this table for the periods December 2000 through March 2001:

Balances Dec Jan Feb Mar
PTD - 20,000 30,000 40,000
TD 10,000 30,000 60,000 100,000

Note: The balances do not include the balance at the beginning of the period; they only include activity within the period. You can calculate the PTD balance for a period by subtracting the balance at the beginning of the period from the balance at the end of the period.

The inflation adjustment amount for the periods January through April is calculated as follows:

April Adjustment = (Previous Year Ending Balance * Dec-Apr Correction Factor) + (Jan PTD Balance * Jan-Apr Correction Factor) + (Feb PTD Balance * Feb-Apr Correction Factor) + (Mar PTD Balance * Mar-Apr Correction Factor)

April Adjustment = (10,000 * 0.060) + (20,000 * 0.048) + (30,000 * 0.034) + (40,000 * 0.025)

April Adjustment = 3,580

This table shows the journal entry to adjust the Goodwill account for inflation:

Account Debit Credit
Goodwill 3,580  
     R.E.I. Account   3,580

Using the Inflation Adjustment Date

The Inflation Adjustment Date (Fecha Valor) feature lets you adjust a journal entry for a period that is before the effective date. For example, you can enter a journal entry for June and adjust the journal entry for a period that starts in January.

Note: If you enter an inflation adjustment date that is after the journal entry effective date, Oracle General Ledger does not use that inflation adjustment date. Instead, the inflation adjustment is calculated based on the journal entry effective date.

To use the Inflation Adjustment Date feature, you must define the ledger where you will run the inflation adjustment process as an MRC primary ledger, even if you do not use the MRC feature in Oracle General Ledger. You can classify a ledger as primary in the Multiple Reporting Currencies tabbed region in the Ledger window.

Use the Change Currency window to enter the inflation adjustment date. You can navigate to the Change Currency window by pressing the Change Currency button in the Journals window. Enter the inflation adjustment date in the To Date field.

Oracle General Ledger only adjusts the lines with accounting flexfield combinations that fall within the account ranges you specified when you submitted the inflation adjustment process.

Using the inflation adjustment date with preliminary reporting

In Chile, you can use the Inflation Adjustment Date feature to help you calculate the correct inflation adjustments for different fiscal reporting periods. For example, although you do not record the final amounts for inflation adjustment until the end of the year, you might want to calculate preliminary inflation adjustments at the end of the quarter for reporting purposes.

In this case, you run the inflation adjustment process at the end of the quarter, creating journal entries that are effective on the last day of that quarter. With these preliminary adjustments, you can report on the inflation-adjusted balances of your accounts at the end of the quarter.

The preliminary adjustments must not remain on your books, however, because you calculate final inflation adjustments for the entire fiscal year at the end of the year. For this reason, you reverse the preliminary adjustment journal entries.

The effective date of the reversing journal entries is the first day of the next quarter, however. Since the preliminary journal entries and the reversing journal entries are effective in different periods, these journal entries will be adjusted for inflation for different periods, leaving a net difference on your books.

In order to completely eliminate the effects of the preliminary adjustments, you must set the inflation adjustment date for the reversing journal entries as the last day of the previous quarter, matching the effective date of the preliminary adjustments. In this way, you ensure that the preliminary journal entries and the reversing journal entries are adjusted for inflation for exactly the same periods, leaving no net effect on your books.

Example for using the inflation adjustment date

This example shows how journal entry lines are adjusted for inflation according to the inflation adjustment date. Assume that the ledger currency for this company's ledger is Chilean pesos (CLP) and that the journal entry is also entered in Chilean pesos.

This table shows price index values for this example.

Period Price Index Value
Jan 120
Feb 150
Mar 170
Apr 190
May 205

Journal Entry #1 is effective on March 14. Assume that the current month is April. Only the Franchise Initial Fee account and the Capital account are within the specified account ranges. This table shows the journal entry:

Account Debit Credit
Franchise Initial Fee 100  
Cash 250  
     Accounts Payable   50
     Capital   300

Case 1 - Adjust Journal Entry #1 for inflation with the same effective and inflation adjustment dates. The inflation adjustment is calculated from the effective date.

Correction Factor = (Index Value for Month Before Last Month of Period Range / Index Value for Month Before First Month of Period Range) - 1

Correction Factor March - April = (170 / 150) - 1 = 0.133

This table shows the resulting journal entry:

Account Debit Credit
Franchise Initial Fee 13  
R.E.I. Account 27  
     Capital   40

Case 2 - Adjust Journal Entry #1 for inflation with the inflation adjustment date set to February 10. The inflation adjustment is calculated from the inflation adjustment date.

Correction Factor February - April = (170 / 120) - 1 = 0.417

This table shows the resulting journal entry:

Accounts Debit Credit
Franchise Initial Fee 42  
R.E.I. Account 84  
     Capital   126

Related Topics

Entering Foreign Currency Journals, Oracle General Ledger User Guide

Revaluing Balances Based on a Foreign Exchange Rate

You can use the standard Oracle General Ledger revaluation feature to adjust specific accounts for unrealized foreign exchange gains and losses through inflation at the end of the month. Choose this method when either your ledger currency or the currency that you enter your transactions in is not Chilean pesos. For example, use this method when your transactions are entered in a foreign currency or in the Chilean Index currency (UF).

Oracle General Ledger revalues the account balances based on the exchange rate as of the end of the month. You can calculate the exchange rate directly from the foreign currency to your ledger currency, or you can calculate the exchange rate from the foreign currency to a stable currency and then from the stable currency to your ledger currency.

Related Topics

Revaluing Balances, Oracle General Ledger User Guide

Revaluing Balances Based on a Direct Foreign Exchange Rate

You can revalue your accounts to adjust them for inflation with a direct exchange rate if you are not legally required to calculate the exchange rate using a stable currency. The direct exchange rate is the default rate for Oracle General Ledger revaluation.

If you select the Single Currency option in the Revalue Balances window, Oracle General Ledger automatically displays the revaluation rate that you defined for the accounting period and currency that you choose. Accept this default rate to revalue your accounts based on the direct exchange rate.

If you select the All Currencies option, Oracle General Ledger uses the direct exchange rate as of the end of the period to revalue your accounts.

Example for revaluing balances based on a direct foreign exchange rate

This example shows how adjustment amounts are calculated to revalue balances based on a direct foreign exchange rate. Assume that the ledger currency for this company's ledger is Chilean pesos and that the year end for the company is December 31, 2000.

This table provides, for this example, the exchange rate from USD to CLP at the end of each month from November 2000 through March 2001:

Period Exchange Rate
Nov 450
Dec 500
Jan 510
Feb 515
Mar 520

Assume that the transactions for the fiscal year 2000 are as shown in this table:

Date Amount in USD Exchange Rate Amount in CLP
06/15/00 50 400 20,000
10/20/00 30 450 13,500
12/24/00 20 480 9,600

The ending balance for FY 2000 is 100 USD or 43,100 CLP.

The adjusted ending balance in CLP for FY 2000 is calculated based on this formula:

Ending Balance in USD * Year-End Exchange Rate

For example, 100 * 500, or 50,000

The adjustment amount in CLP at the end of FY 2000 is calculated based on this formula:

Adjusted Ending Balance in CLP - Unadjusted Ending Balance in CLP

For example, 50,000 - 43,100, or 6,900

Assume that the transactions for the fiscal year 2001 are as shown in this table:

Date Amount in USD Exchange Rate Amount in CLP
FY 2000 Ending Balance (Adjusted) 100   50,000
01/15/01 10 510 5,100
02/20/01 5 512 2,560
03/12/01 3 515 1,545

The ending balance for March 2001 is 118 USD or 59,205 CLP.

The adjusted ending balance in CLP for March 2000 is calculated according to this formula:

Ending Balance in USD * Month-End Exchange Rate

For example, 118 * 520, or 61,360

The adjustment amount in CLP for the period January - March 2001 is calculated according to this formula:

Adjusted Ending Balance in CLP - Unadjusted Ending Balance in CLP

For example, 61,360 - 59,205, or 2,155

Revaluing Balances Based on a Foreign Exchange Rate Using a Stable Currency

In Chile, the banking and insurance industries are legally required to revalue revenue and expense accounts based on an exchange rate calculated using a stable currency. You can use the Oracle General Ledger revaluation feature to meet this requirement by entering the exchange rate using a stable currency in the Revalue Balances window.

Select the Single Currency option in the Revalue Balances window. Oracle General Ledger automatically displays the revaluation rate that you defined for the accounting period and currency that you choose. This rate is the rate calculated directly from the foreign currency to your ledger currency. You must override the default exchange rate by entering the correct exchange rate using a stable currency.

To find the correct rate, you must first express the foreign currency in terms of the stable currency and then translate the stable currency into your ledger currency. For example, if you want to revalue balances in Canadian dollars (CAD) using US dollars (USD) as the stable currency and your ledger currency is Chilean pesos (CLP), use this formula to calculate the correct revaluation rate:

Exchange Rate from CAD to CLP using USD as Stable Currency = (Exchange Rate from CAD to USD) * (Exchange Rate from USD to CLP)

Example for revaluing balances based on a foreign exchange rate using a stable currency

This example shows how adjustment amount is calculated to revalue balances based on a foreign exchange rate using a stable currency. Assume that the ledger currency for this company's ledger is Chilean pesos and that the year end for the company is December 31.

Assume that the exchange rates on the given dates are as shown in this table:

Date Exchange Rate from CAD to USD Exchange Rate from USD to CLP Exchange Rate from CAD to CLP
01/01 0.005263 380 2
01/31 0.0051282 400 2.052
02/01 0.005 400 2.06
02/28 0.006 420 2.55

Note: Due to rounding differences, the exchange rates from CAD to CLP may not be the same as the exchange rates from CAD to USD to CLP.

Assume that the transactions for the fiscal year are as shown in this table:

Date Amount in CAD Direct CAD-CLP Exchange Rate Amount in CLP
01/01 600,000 2 1,200,000
02/01 10,000 2.06 20,600

The ending balance for February is 610,000 CAD or 1,220,600 CLP.

The adjusted ending balance in CLP for February is calculated according to this formula:

Ending Balance in CAD * (CAD-USD Exchange Rate * USD-CLP Exchange Rate)

For example, 610,000 * (0.006 * 420), or 1,537,200

The adjustment amount in CLP at the end of February is:

Adjusted Ending Balance in CLP - Unadjusted Ending Balance in CLP

For example, 1,537,200 - 1,220,600, or 316,600

Setup (Legal Journal Categories)

This section describes how to set up Oracle General Ledger for Chile for legal journal categories. Use this checklist to help you complete the appropriate steps in the correct order.

Step Task
1 Enable Sequential Numbering
2 Define Document Sequences
3 Assign Document Sequences to Internal Journal Categories

Enable Sequential Numbering

Enable sequential numbering for your document sequences by entering Always Used or Partially Used for the Sequential Numbering profile option. Use the System Profile Values window in the System Administrator responsibility to assign a value to the Sequential Numbering profile option.

Related Topics

Overview of Setting User Profiles, Oracle Applications System Administrator's Guide

Define Document Sequences

Define a document sequence for each legal or standard journal category that you use. The document sequences determine how your journal entries are classified and numbered on the General Ledger Journal Entry report.

Use the Document Sequences window in the System Administrator responsibility to define document sequences. Oracle General Ledger prints the names of the document sequences on the legal reports exactly as you enter the names in the Document Sequences window. For this reason, you should enter the names exactly as you want them to appear on the report.

After you define document sequences, you can associate internal journal categories with the sequences to classify your journal entries into the legal or standard journal categories represented by the sequences.

Renewing sequence numbering

You can use the effective dates for a document sequence to choose how often to renew your journal entry sequence numbering. Some common numbering schemes in Chile include:

To renew the numbering periodically for your legal or standard journal categories, define a separate document sequence for each category in each numbering period. Enter the first day of the numbering period as the effective from date for the sequence. Enter the last day of the numbering period as the effective to date for the sequence. You can then begin using a new sequence for the next period.

Note: You might want to include the numbering period in the name of the document sequence to help you identify the sequence.

To use perpetual numbering, define one document sequence for each legal or standard journal category that you use. Enter the day when you start using the document sequence as the effective from date for the sequence. Leave the Effective To field blank to continue using the sequence indefinitely.

Note: When you associate an internal journal category with a document sequence, the start date and end date that you enter for the sequence assignment should match the effective dates that you define for the document sequence.

Example for renewing sequence numbering

This table shows one example of how to set up document sequences for the legal journal category Egreso with monthly numbering.

Name Effective From Effective To
Egreso - JAN 99 01-JAN-99 31-JAN-99
Egreso - FEB 99 01- FEB -99 28-FEB-99
Egreso - MAR 99 01-MAR-99 31-MAR-99
Egreso - APR 99 01-APR-99 30-APR-99
Egreso - MAY 99 01-MAY-99 31-MAY-99
Egreso - JUN 99 01-JUN-99 30-JUN-99
Egreso - JUL 99 01-JUL-99 31-JUL-99
Egreso - AUG 99 01-AUG-99 31-AUG-99
Egreso - SEP 99 01-SEP-99 30-SEP-99
Egreso - OCT 99 01-OCT-99 31-OCT-99
Egreso - NOV 99 01-NOV-99 30-NOV-99
Egreso - DEC 99 01-DEC-99 31-DEC-99

This table shows one example of how to set up document sequences for the legal journal category Egreso with yearly numbering.

Name Effective From Effective To
Egreso 1999 01-JAN-99 31-DEC-99
Egreso 2000 01-JAN-00 31-DEC-00
Egreso 2001 01-JAN-01 31-DEC-01

This table shows one example of how to set up a document sequence for the legal journal category Egreso with perpetual numbering.

Name Effective From Effective To
Egreso 01-JAN-00 Blank

Related Topics

Defining a Document Sequence, Oracle Applications System Administrator's Guide

Assign Document Sequences to Internal Journal Categories

You must assign one of the document sequences representing the legal or standard journal categories to each of your internal journal categories. You can assign the same document sequence to several internal categories.

Use the Sequence Assignments window in the System Administrator responsibility to assign document sequences to internal journal categories. The start date and end date that you enter for the sequence assignment should match the effective dates that you defined for the document sequence.

The journal entries in each document sequence then appear in the corresponding legal or standard journal category on the Chilean General Ledger Daily Book report and Chilean General Ledger Journal Entries report.

Note: Only journal entries for actual journals are numbered by the document sequences. Journal entries for encumbrance journals and budget journals are not included in the document sequences.

Related Topics

Assigning Document Sequences, Oracle General Ledger User Guide

Entering Journals

You can enter journals in the Enter Journals window in General Ledger, or you can import journals from a subledger with the Journal Import process. In either case, you can assign the journal one of these types:

If you select Actual, the transactions in the journal are included on the Chilean legal reports. If you select Budget or Encumbrance, the transactions are not included on the Chilean legal reports.

You can also select an internal journal category when you enter a journal. The internal journal category determines which legal or standard journal category the journal belongs to.

The legal and standard journal categories do not appear in the Enter Journals window or the Journal Entry Inquiry window. Only the internal journal categories appear in these windows. The Enter Journals window and the Journal Entry Inquiry window do, however, show the document sequence number for each journal entry, according to the document sequences you defined for your legal and standard journal categories.

The internal journal category, the legal or standard journal category as defined in the document sequence, and the document sequence number for each journal entry all appear on the Chilean General Ledger Daily Book report and Chilean General Ledger Journal Entries report. In this way, the reports provide a clear audit trail for your journals.

Related Topics

Entering Journals, Oracle General Ledger User Guide

Defining a Cash Accounting Model

You can use the Chilean General Ledger Cash Ledger report to report monthly inflows and outflows for your cash accounts. To specify which accounts you use as cash accounts, you must define an accounting model for your cash accounts.

An accounting model lets you select individual General Ledger accounts as well as account ranges, group those accounts into a set, and give a name to that set. Use the Accounting Models window to define an accounting model.

After you define a set of accounts as a cash accounting model, you can use the accounting model to specify the accounts that should be included on the Chilean General Ledger Cash Ledger report.

Once an accounting model is defined for a particular group of accounts, you can reuse that accounting model whenever you want to report on that group of accounts.

For example, if you have 20 accounts numbered 1-20 and you want to report on accounts 5-7, 9, and 12-14, you could group those accounts together as an accounting model. You can now specify these accounts with the new name that you gave this group in the accounting model.

To define a cash accounting model:

  1. Navigate to the Accounting Models window.

  2. Enter the accounting model name in the Name field.

  3. Enter the accounting model description in the Description field.

  4. In the Account Ranges - From field, enter the low segment values for the range of accounts that you want to assign to this accounting model.

  5. In the Account Ranges - To field, enter the high segment values for the range of accounts that you want to assign to this accounting model.

    Note: When you enter low and high segment values, you define the range you want for each segment separately from the other segments. The accounting model includes only those accounting flexfields whose segment values each fall within the range for that segment.

    For example, suppose you enter the low segment values 91-000-4000 and the high segment values 92-000-5000. In this case, the accounting model includes only the accounting flexfields from 91-000-4000 through 91-000-5000 and from 92-000-4000 through 92-000-5000.

  6. Repeat steps 4 and 5 for each range of accounts that you want to assign to this accounting model.

  7. Save your work.

Chilean General Ledger Cash Ledger Report

Use the Chilean General Ledger Cash Ledger report (Libro de Caja y Banco) to show the activity for your cash accounts in a particular period. For each account, the Chilean General Ledger Cash Ledger report lists the cash inflows and outflows from the journal entries posted to the account during the period. The Chilean General Ledger Cash Ledger report also shows the beginning balance, total inflows and outflows, and ending balance for the account in the period.

Only actual journal entries appear on the Chilean General Ledger Cash Ledger report. The report sorts journal entries by currency, period, account number, and journal entry effective date. Oracle General Ledger prints a separate section for each entered currency in each account.

Use the Standard Request Submission windows to submit the Chilean General Ledger Cash Ledger report.

Prerequisites

Before you run the Chilean General Ledger Cash Ledger report, you must:

Report Parameters

Period From

Enter the earliest accounting period that you want to include on the report.

Period To

Enter the latest accounting period that you want to include on the report.

Account Model

Enter the name of the accounting model that you defined for your cash accounts.

Print Company Information

Enter Yes if you want to print company information in the headings of the report. Enter No if you do not want to print company information. The default for this parameter is No.

Report Headings

In this heading... General Ledger prints...
Company Name Your company name
Address Your company address
Taxpayer ID Your company taxpayer ID
Service Type The service type
<Report Title> Chilean Cash Ledger Report
Period From The earliest period included on the report
Period To The latest period included on the report
Model Name The name of the accounting model that you defined for your accounts
Report Date The date and time that you ran the report
Page The current and total page numbers

Column Headings

In this column... General Ledger prints...
Date The journal entry effective date
Batch Name The journal entry batch name
Journal Entry Name The journal entry name
Line Description A description of the journal entry line
Document Type The document type of the source document for the journal entry
Document Number The document number of the source document for the journal entry
Inflows The cash inflow amount
Outflows The cash outflow amount

Row Headings

In this row... General Ledger prints...
Currency The entered currency of the journal entries
Period The period name
Account The accounting flexfield and account description
Total for Account for Period The total cash inflow and outflow amounts for the account
Beginning Balance The beginning balance of the account
Period Total Inflows The total cash inflow amount for the period
Period Total Outflows The total cash outflow amount for the period
Ending Balance The ending balance of the account

Related Topics

Using Standard Request Submission, Oracle Applications User Guide

Oracle Receivables

Chilean Receivables Sales Ledger Overview

In Chile, companies must report sales information on the Chilean Receivables Sales Ledger report (Libro de Ventas). The Chilean Receivables Sales Ledger report displays all the transactions associated with sales operations in a particular period, including invoices, debit notes, and credit notes.

You can use the Chilean Receivables Sales Ledger report in Oracle Receivables to meet these legal requirements:

Chilean legal document classifications include the following:

You can use Oracle Receivables to set up your document classifications for the Chilean Receivables Sales Ledger report. Oracle Receivables for Chile lets you classify your transaction documents according to the legal document classifications, determine the order in which the classifications appear on the Chilean Receivables Sales Ledger report, and ensure that the document sequences are gapless.

After you set up your document classifications and tax code identifiers, you can run the Chilean Receivables Sales Ledger report. For more information, see Chilean Receivables Sales Ledger Report.

Document Classification Overview

Oracle Receivables lets you set up document classifications to meet legal requirements for reporting your sales transactions on the Chilean Receivables Sales Ledger Report. You can associate transaction types with legal document classifications and use document sequencing to ensure gapless numbering within each classification.

To use document sequencing, you must create a document category for each of your transaction types. You then create a document sequence for each of the legal document classifications and assign each document category to one of the document sequences. In this way, you can associate your transactions with the appropriate document classifications for legal reporting purposes.

Oracle Receivables also lets you determine the order in which the document classifications appear on the Chilean Receivables Sales Ledger report. You can specify the order of the document classifications when you define your transaction types. For more information, see Define Transaction Types.

Example for document classification

This table shows an example of one way to set up the document classifications for sales transactions. Assume that a company needs to include the following legal document classifications on the Chilean Receivables Sales Ledger report, in this order:

  1. Boleta

  2. Factura Nacional

  3. Factura Extranjera

  4. Nota de Debito

  5. Nota de Credito

The transactions within each legal document classification must be presented in a gapless sequence on the Chilean Receivables Sales Ledger report. This table shows the document category and document sequence each transaction type is associated with, and the order in which the document sequences appear on the Chilean Receivables Sales Ledger report. The table also lists the sequence numbers that Oracle Receivables assigns to transactions in each document sequence.

Transaction Number Transaction Type Document Sequence Order Value Document Category Document Sequence (Legal Document Classification) Document Sequence Number
101 Boleta 1 1 Boleta 1 Boleta 1
102 Boleta 2 1 Boleta 2 Boleta 2
103 Factura Nacional - Services 2 Factura Nacional - Services Factura Nacional 1
104 Factura Nacional - Goods - A 2 Factura Nacional - Goods - A Factura Nacional 2
105 Factura Nacional - Goods - B 2 Factura Nacional - Goods - B Factura Nacional 3
106 Factura Extranjera 3 Factura Extranjera Factura Extranjera 1
107 Factura Extranjera 3 Factura Extranjera Factura Extranjera 2
108 Nota de Debito 4 Nota de Debito Nota de Debito 1
109 Nota de Credito 5 Nota de Credito Nota de Credito 1

Note: This example shows how transaction types are grouped together in a legal document classification.

Each transaction type is in a one-to-one relationship with a document category. However, several document categories can be associated with a single document sequence, as shown by transactions 103, 104, and 105.

All the transaction types associated with the same document sequence appear in the same document classification grouping on the Chilean Receivables Sales Ledger report.

Related Topics

Implementing Document Sequences, Oracle Receivables User Guide

Setup

To ensure that your Chilean Receivables Sales Ledger report meets legal requirements, you must perform these document classification setup steps. Use this checklist to help you complete the appropriate steps in the correct order.

Step Task
1 Define Transaction Types
2 Define Transaction Batch Sources
3 Enable Sequential Numbering
4 Define Document Sequences
5 Define Document Categories
6 Define Sequence Assignments

Define Transaction Types

Define the transaction types that you need for your sales transactions in the Transaction Types window. You can associate the transaction types with document categories for document sequencing. You must give each transaction type the same name as the corresponding document category to create the association between the two.

Use the globalization flexfield in the Transaction Types window to set up your transaction types for the Chilean Receivables Sales Ledger Report. You can perform these steps:

Note: When you void a transaction, the transaction type associated with the transaction changes. For reporting purposes, however, the transaction still belongs to the document sequence associated with the original transaction type. On the Chilean Receivables Sales Ledger report, the transaction still appears in the section for the original legal document classification, although the transaction is marked as void.

To define a transaction type for the Chilean Receivables Sales Ledger report:

  1. Navigate to the Transaction Types window.

  2. Enter information to define a transaction type.

  3. Navigate to the globalization flexfield.

  4. Enter Yes in the Include in Sales Ledger field if you want transactions of this type to appear on the Chilean Receivables Sales Ledger report. Enter No if you do not want transactions of this type to appear on the Chilean Receivables Sales Ledger report. If you do not enter a value, the Include in Sales Ledger field defaults to Yes.

  5. If you enter Yes in the Include in Sales Ledger field, you must enter a value in the Document Seq Order field to specify the order in which document sequences appear on the Chilean Receivables Sales Ledger report.

    Each transaction type is associated with its own document category, and each document category is assigned to a document sequence. You enter the document sequence order value at transaction type level.

    Note: If you enter No in the Include in Sales Ledger field, leave the Document Seq Order field blank. You need not enter a document sequence order value for transaction types that do not appear on the Chilean Receivables Sales Ledger report.

  6. Enter Yes in the Void Original Transaction field if you want to designate this transaction type for the Copy and Void Invoices feature. Enter No if you do not want to use this transaction type for the Copy and Void Invoices feature.

Related Topics

Define the Void Transaction Type

Copy and Void Invoices Overview

Transaction Types, Oracle Receivables User Guide

Define Transaction Batch Sources

In Chile, some legal documents are printed on pre-numbered forms. For example, you print your invoices, both domestic and foreign, on one set of forms, and your boletas on another set of forms.

You can enter the form numbers as the transaction numbers in Oracle Receivables by setting up transaction batch sources with automatic transaction numbering. Define a transaction batch source with automatic transaction numbering enabled for each set of pre-numbered forms. Assign the transaction types for the transactions printed on those forms to the appropriate transaction batch source. You can assign several transaction types to one transaction batch source. Oracle Receivables automatically numbers all the transactions with the same source in the same transaction number sequence.

Example for transaction batch sources

The following table shows an example of setting up a transaction batch source for invoices. The example shows the transaction types associated with the transaction batch source, and the transaction numbers assigned to transactions of these types. The example also lists the document sequence numbers that Oracle Receivables assigns to the transactions, according to the document sequence associated with each transaction type.

Transaction Batch Source Transaction Type Transaction Number Document Sequence Number
Chile Factura Factura Nacional 100000 1
Chile Factura Factura Extranjera 100001 1
Chile Factura Factura Extranjera 100002 2
Chile Factura Factura Extranjera 100003 3
Chile Factura Factura Nacional 100004 2

Note: Oracle Receivables assigns document sequence numbers to transactions independently of the transaction numbers.

The transaction numbers are assigned based on the transaction batch source that a transaction type is associated with. In this example, the transaction types Factura Nacional and Factura Extranjera are associated with the same transaction batch source, so all the transactions are numbered in the same transaction number sequence.

The document sequence numbers are assigned based on the document sequence that a transaction type is associated with. In this example, the Factura Nacional and Factura Extranjera transaction types belong to different document sequences for different legal document classifications, so the Factura Nacional transactions are numbered in a different document sequence from the Factura Extranjera transactions.

Related Topics

Transaction Batch Sources, Oracle Receivables User Guide

Enable Sequential Numbering

Enable sequential numbering for your document sequences by entering Always Used or Partially Used for the Sequential Numbering profile option. Use the System Profile Values window to assign a value to the Sequential Numbering profile option.

Related Topics

Profile Options, Oracle Receivables User Guide

Define Document Sequences

Define document sequences that correspond to the legal document classifications required by the Chilean government. The document sequences that you define determine how your documents are grouped on the Chilean Receivables Sales Ledger Report.

You should define a document sequence for each legal document classification. Oracle Receivables prints the names of the document sequences on the Chilean Receivables Sales Ledger report as you enter the names in the Document Sequences window. You should enter the names as you want them to appear on the report.

To meet the legal requirement for gapless sequences within your document classifications, select the Gapless type for your document sequences in the Document Sequences window.

Define Document Categories

Define a document category for each of your transaction types. You must give each document category the same name as the corresponding transaction type to associate the document category and the transaction type. Enter the document category name in the Document Categories window as you entered the transaction type name in the Transaction Types window.

Define Sequence Assignments

Assign each of your document categories to a document sequence. You can assign several document categories to a single document sequence.

Since each document category corresponds to a transaction type, the transaction type is automatically associated with the document sequence that you assign the document category to. You can group the transaction types in a document sequence. The transactions in each document sequence then appear in the corresponding legal document classification in the Chilean Receivables Sales Ledger Report.

Tax Reporting Codes Overview

The Chilean Receivables Sales Ledger Report lists all the posted sales transactions for a particular period, as well as the tax components for each transaction that is subject to tax. The Chilean government requires companies to separate the tax components of each transaction into either:

To meet this requirement, Oracle E-Business Tax lets you assign a tax reporting codes to each tax rate, classifying the tax code as either VAT or Non VAT. For more information, see Assigning Tax Reporting Codes. Oracle E-Business Tax uses the tax reporting code for the tax rate associated with each transaction line to determine to which category the tax amount belongs.

Note: If a transaction line is associated with a tax group that applies to multiple tax rates, Oracle E-Business Tax stores each tax rate as a separate tax line on the invoice. The tax reporting code for each rate determines the classification to which each separate tax amount belongs.

Assigning Tax Reporting Codes

Use Oracle E-Business Tax to assign tax reporting codes to tax rates by navigating to the Tax Reporting Codes region in the Rate flow. The Tax Code Classification reporting type code (CL_TAX_CODE_CLASSIF) classifies a tax rate as VAT or Non-VAT.

To assign tax reporting codes:

  1. Navigate to the Rate flow as follows:

  2. Search for the desired tax rate.

    Note: You must update the tax rates belonging to Chilean taxes.

  3. Click Rate Details and navigate to the Tax Reporting Codes region.

  4. Add a row and select CL_TAX_CODE_CLASSIF in the Tax Reporting Type Code field.

  5. Enter VAT or Non-VAT in the Tax Reporting Code field.

  6. Click Apply.

Related Topics

Using the Regime to Rate Flow, Oracle E-Business Tax User Guide

Setting Up Tax Rates, Oracle E-Business Tax User Guide

Setting Up Tax Reporting Types, Oracle E-Business Tax User Guide

Chilean Receivables Sales Ledger Report

The Chilean Receivables Sales Ledger report (Libro de Ventas) displays all transactions associated with sales operations in a particular period, including invoices, debit notes, and credit notes. You can use the Chilean Receivables Sales Ledger report to meet these legal requirements:

The Chilean Receivables Sales Ledger report groups transactions according to the document sequences that you defined to correspond to the legal document classifications. Oracle Receivables prints the classifications in the order that you defined in the globalization flexfield in the Transaction Types window. Within each classification, Oracle Receivables orders transactions in ascending order by document sequence number.

The Chilean Receivables Sales Ledger report includes only transactions posted to General Ledger and voided transactions. To print transactions in a gapless sequence on the Chilean Receivables Sales Ledger report, ensure that you either post or void each transaction for a period before you run the Chilean Receivables Sales Ledger report.

For each transaction, the Chilean Receivables Sales Ledger report shows the exempt amount, the amount subject to tax, the VAT amount, and the amount of other taxes.

Note: Some legal documents, such as boletas, displays amounts inclusive of tax. For these documents, Oracle Receivables separates the amount subject to tax from the tax amount to meet the legal requirements for reporting tax amounts on the Chilean Sales Ledger report.

Determining Exempt Amounts and Amounts Subject to Tax

Oracle Receivables uses the tax handling method and the tax rate associated with each transaction line to determine whether the amount is exempt or subject to tax:

If the tax handling method is Exempt, then the amount is classified as exempt on the Chilean Receivables Sales Ledger report, regardless of the tax rate.

Oracle Receivables prints summary information at the end of the Chilean Receivables Sales Ledger report. The Detail of Other Taxes section provides a summary for each tax identified as Non VAT. The report also shows a summary of total amounts for each document classification, with the total number of valid and voided transactions in each classification.

Use the Standard Request Submission windows to submit the Chilean Receivables Sales Ledger report.

Prerequisites

Before you can run the Chilean Receivables Sales Ledger report, you must:

Report Parameters

Ledger Currency

The ledger currency to use for this report.

Period

Enter the accounting period that you want to report transactions for.

Print Company Information

Enter Yes if you want to print company information in the headings of the report. Enter No if you do not want to print company information. The default for this parameter is Yes.

Report Headings

In this heading... Oracle Receivables prints...
Company Name Your company name
Address Your company address
Taxpayer ID Your company taxpayer ID
Legal Representative The name of your legal representative
Representative Tax ID Your taxpayer ID
Service Type The service type
Report Date The date and time that the report was printed
Page The current and total page numbers
<Report Title> Chilean Sales Ledger Report
Period The period you selected
Currency The functional currency of the set of books that you run the report from

Column Headings

In this column... Oracle Receivables prints...
Document Type The document sequence name.
Date The date of the transaction.
Transaction Number The transaction number.
Void Transaction An asterisk if this transaction is void. Oracle Receivables leaves this column blank for transactions that are not void.
Document Number The document sequence number.
Taxpayer ID The customer's taxpayer ID.
Customer Name The customer name.
Transaction Currency The currency that the transaction was entered in.
Tax Exempt Amount The exempt amount.
Taxable Amount The amount subject to tax. This includes amounts subject to any kind of taxes, not just VAT.
VAT Amount The VAT amount.
Other Taxes The tax amount for other taxes.
Transaction Amount The total transaction amount.
Total The totals for this document type.

Summary Column Headings

These column headings appear in the Detail of Other Taxes section of the Chilean Receivables Sales Ledger report.

In this column... Oracle Receivables prints...
Name The tax code name
Tax Type The tax type
Rate (%) The tax rate as a percentage
Total The total amount for this tax code

These column headings appear at the end of the Chilean Receivables Sales Ledger report.

In this column... Oracle Receivables prints...
Document Type The document sequence name
Count The number of transactions for this document type, not including voided transactions
Void The number of void transactions for this document type
Tax Exempt Amount The total exempt amount for this document type
Taxable Amount The total amount subject to tax for this document type
VAT Amount The total VAT amount for this document type
Other Taxes The total for other taxes for this document type
Transaction Amount The total transaction amount for this document type
Total The totals for all document types

Related Topics

Using Standard Request Submission, Oracle Applications User Guide

Oracle Payables

Document Type Overview

In Chile, companies must report invoice information to the government on the Chilean Payables Purchase Ledger report and the Chilean Payables Withholding of Fees Ledger report, and to suppliers on withholding tax certificates. The Chilean government has defined legal document types that determine the report on which an invoice must appear. The legal document types include:

Purchase documents, such as domestic invoices, foreign invoices, debit memos, and credit memos, must appear on the Chilean Payables Purchase Ledger report. Documents that include withholding tax amounts, such as professional service fee boletas and professional services and participation fee boletas, must appear on the Chilean Payables Withholding of Fees Ledger report as well as on withholding tax certificates to suppliers.

Use the globalization flexfield in the Invoices window to assign document types to your invoices. You must assign a document type to all invoices with an invoice type of either Standard or Credit Memo. For all other invoice types, you must leave the Document Type field blank.

For invoices with an invoice type of Credit Memo, you must choose the document type Credit Memo. For invoices with an invoice type of Standard, you can assign one of these legal document types:

You can also assign the document type Internal to an invoice with an invoice type of Standard. Invoices with a document type of Internal do not appear on any legal reports.

The document type of an invoice determines which legal reports include the invoice, as shown in this table:

Invoice Type Document Type Legal Reports
Standard Debit Memo Chilean Payables Purchase Ledger report
Standard Domestic Invoice Chilean Payables Purchase Ledger report
Standard Foreign Invoice Chilean Payables Purchase Ledger report
Standard Internal None
Standard Professional Service Fee Chilean Payables Withholding of Fees Ledger report, Chilean Payables Professional Fees Certificate, and Chilean Payables Professional Fees and Participation Certificate
Standard Professional Services and Participation Fee Chilean Payables Withholding of Fees Ledger report and Chilean Payables Professional Fees and Participation Certificate
Credit Memo Credit Memo Chilean Payables Purchase Ledger report
All other invoice types None None

In Chile, two documents that come from the same supplier can have the same document number if the documents belong to different legal document types. In Oracle Payables, however, all documents that come from the same supplier and belong to the same invoice type must have unique document numbers.

If you enter an invoice in Oracle Payables that has the same number as another invoice from the same supplier, and the two invoices belong to different document types, you can add an identifier to the beginning of the document number to make the number unique. For example, if you are entering a debit memo whose number is 25534, and you have already entered a domestic invoice with the number 25534 from the same supplier, you can enter DM25534 as the unique document number for the debit memo.

Assigning Document Types

Use the globalization flexfield to assign a document type to invoices that you enter in the Invoices window.

To assign document types in the Invoices window:

  1. Navigate to the Invoices window.

  2. Enter an invoice.

  3. Navigate to the globalization flexfield.

  4. Enter the document type in the Document Type field.

  5. Choose the OK button.

Related Topics

Entering Invoices Overview, Oracle Payables User Guide

Chilean Payables Purchase Ledger Report

The Chilean Payables Purchase Ledger report (Libro de Compras) displays all the transactions associated with purchase operations in a particular period, including invoices, debit memos, and credit memos. In Chile, companies are legally required to submit the Chilean Payables Purchase Ledger report to the tax authorities at the end of each month.

The Chilean Payables Purchase Ledger report includes only invoices with these document types:

You can assign document types to your invoices in the globalization flexfield in the Invoices window. For more information, see Assigning Document Types.

For each invoice, the Chilean Payables Purchase Ledger report shows the exempt amount, the amount subject to tax, the VAT amount, and the amount of other taxes.

Determining Exempt Amounts and Amounts Subject to Tax

Oracle Payables uses the tax code and tax rate associated with each invoice distribution line to determine whether the amount is exempt or subject to tax:

If a transaction is subject to tax, the Chilean government requires the corresponding tax amounts to be identified as either VAT or other taxes. Oracle Payables uses the tax category that you assigned to the tax code in the globalization flexfield in the Tax Codes window to determine how to classify a tax amount.

Oracle Payables prints summary information at the end of the Chilean Payables Purchase Ledger report. The Detail of Other Taxes section provides a summary for each tax identified as Non VAT. The report also shows a summary of total amounts for each document type, with the total number of transactions in each type.

Use the Standard Request Submission windows to submit the Chilean Payables Purchase Ledger report.

Prerequisites

Before you run the Chilean Payables Purchase Ledger report, you must:

Report Parameters

Ledger Currency

The ledger currency to use for this report.

Period

Enter the accounting period that you want to report transactions for. The Chilean Payables Purchase Ledger report prints invoices entered during the period that you specify.

Print Company Information

Enter Yes if you want to print company information in the headings of the report. Enter No if you do not want to print company information. The default for this parameter is Yes.

Report Headings

In this heading... Oracle Payables prints...
Company Name Your company name
Address Your company address
Taxpayer ID Your company taxpayer ID
Service Type The service type
Report Date The date and time that you ran the report
Page The current and total page numbers
<Report Title> Chilean Purchase Ledger Report
Period The period you selected

Column Headings

In this column... Oracle Payables prints...
Document Date The invoice date.
Document Number The invoice number.
Taxpayer ID The supplier taxpayer ID.
Supplier Number The supplier number.
Supplier Name The supplier name.
Exempt The exempt amount.
Effective The amount subject to tax. This includes amounts subject to any kind of taxes, not just VAT.
VAT The VAT amount.
Other Taxes The tax amount for other taxes.
Total The total amount for the document, including the exempt amount, the amount subject to tax, the VAT amount, and the amount of other taxes.

Row Headings

In this row... Oracle Payables prints...
Document Type The document type
<Document Type> Total The totals for the document type
Report Total The totals for the report

Summary Column Headings

These column headings appear in the Detail of Other Taxes section of the Chilean Payables Purchase Ledger report.

In this column... Oracle Payables prints...
Name The tax code
Tax Type The tax type
Rate The tax rate
Total The total amount for this tax code
Total The total amount for all other taxes

These column headings appear at the end of the Chilean Payables Purchase Ledger report.

In this column... Oracle Payables prints...
Document Type The document type
Count The number of transactions for this document type
Exempt The total exempt amount for this document type
Subject to Tax The total amount subject to tax for this document type
VAT Amount The total VAT amount for this document type
Other Taxes The total amount for other taxes for this document type
Total The total amount of all documents for this document type

Related Topics

Using Standard Request Submission, Oracle Applications User Guide

Chilean Payables Withholding of Fees Ledger Report

The Chilean Payables Withholding of Fees Ledger report (Libro de Retencion de Honorarios) details all the invoices paid during a particular period on which amounts were withheld. Use the Chilean Payables Withholding of Fees Ledger report to show tax authorities that you withheld taxes for invoices subject to withholding tax.

The Chilean Payables Withholding of Fees Ledger report includes only invoices subject to withholding tax, identified by a document type of Professional Service Fee or Professional Services and Participation. You can assign document types to your invoices in the globalization flexfield in the Invoices window. For more information, see Assigning Document Types.

The Chilean Payables Withholding of Fees Ledger report shows only invoices in your ledger currency that have already been paid and accounted for in Oracle Payables. Also, the report includes only invoices with an invoice currency of Chilean pesos.

For each invoice, the Chilean Payables Withholding of Fees Ledger report shows information about the supplier as well as the gross amount before tax withholding, the amount of tax withheld, and the total net invoice amount. The gross amount and amount of tax withheld are not affected by discounts or other taxes.

Note: Payables only prints supplier information for suppliers that have a bill-to and ship-to address defined at the supplier site level.

The transactions on the Chilean Payables Withholding of Fees Ledger report are grouped by document type. Within each document type, the transactions are sorted by invoice date.

Use the Standard Request Submission windows to submit the Chilean Payables Withholding of Fees Ledger report. You can select the period that you want to report invoices for. You can also choose whether to print company information such as taxpayer ID and legal representative.

Prerequisites

Before you run the Chilean Payables Withholding of Fees Ledger report, you must:

Report Parameters

Legal Entity

Enter the legal entity that you want to report on.

Period

Enter the accounting period that you want to report transactions for. The Chilean Payables Withholding of Fees Ledger report prints invoices paid during the period that you specify.

Print Company Information

Enter Yes if you want to print company information in the headings of the report. Enter No if you do not want to print company information. The default for this parameter is Yes.

Report Headings

This table shows the report headings.

In this heading... Oracle Payables prints...
Company Name Your company name
Address Your company address
Taxpayer ID Your company taxpayer ID
Service Type The service type
Report Date The date and time that you ran the report
Page The current and total page numbers
<Report Title> Withholding of Fees Ledger Report
Period The period you selected

Column Headings

This table shows the column headings.

In this column... Oracle Payables prints...
Document Date The invoice date
Document Number The invoice number
Supplier Name The supplier name
Taxpayer ID The supplier taxpayer ID
Supplier Address The supplier site address
Supplier City The supplier site city
Gross Amount The gross amount of the invoice
Withheld Tax The amount of tax withheld from the invoice
Net Amount The net amount of the invoice, calculated by subtracting the withheld tax from the gross amount

Row Headings

This table shows the row headings.

In this row... Oracle Payables prints...
Document Type The document type
Total The totals for the document type
Report Total The totals for the report

Related Topics

Using Standard Request Submission, Oracle Applications User Guide

Defining Sequences for Withholding Tax Certificate Numbering

In Chile, you must send your suppliers withholding tax certificates to certify that you withheld taxes from the professional service fees and participation amounts you paid the suppliers. You can use the Chilean Payables Withholding Certificate in Oracle Payables for Chile to print withholding tax certificates.

Before you run the Chilean Payables Withholding Certificate, however, you must define document sequences with sequential numbering for Oracle Payables to use in numbering the certificates. You can assign document sequences to the seeded Chilean Payables Withholding Certificate document category to determine which sequences are used for certificate numbering.

Enabling Sequential Numbering

Enable sequential numbering for your document sequences by entering Always Used or Partially Used for the Sequential Numbering profile option. Use the System Profile Values window to assign a value to the Sequential Numbering profile option.

Related Topics

Voucher Numbers and Document Sequences, Oracle Payables User Guide

Defining Document Sequences

Define a document sequence for withholding tax certificate numbering. You should define at least one document sequence for each tax year to ensure that a unique certificate is generated for each tax year. Use the Document Sequences window in the System Administrator responsibility to define a document sequence. You can use the Initial Value field to define the first number in the sequence.

You can define more than one sequence for the same year if you want to use different number ranges for your certificates. You can only assign one document sequence to the Chilean Withholding Tax Certificate document category at a time, however.

Related Topics

Voucher Numbers and Document Sequences, Oracle Payables User Guide

Defining Sequence Assignments

Assign the document sequence that you want to use for withholding tax certificate numbering to the seeded Chilean Withholding Tax Certificate document category. Use the Sequence Assignments window in the System Administrator responsibility to define the sequence assignment. You can only assign one document sequence to the Chilean Withholding Tax Certificate document category at a time.

Related Topics

Voucher Numbers and Document Sequences, Oracle Payables User Guide

Chilean Payables Withholding Certificate Overview

In Chile, you must send your suppliers withholding tax certificates to certify that you withheld taxes from the professional service fees and participation amounts you paid the suppliers. The withholding tax certificates show both the gross invoice amounts and the tax withheld for each month in the tax year.

If a supplier had only professional service fees in a particular tax year, you must send the supplier a Fees Certificate. If a supplier had both professional service fees and participation, you must send the supplier a Fees and Participation Certificate.

You can use the Chilean Payables Withholding Certificate to print both kinds of withholding tax certificates. When you run the Chilean Payables Withholding Certificate, Oracle Payables uses the document types you assigned to the invoices from each supplier to determine which withholding certificate to print for the supplier.

The Chilean Payables Withholding Certificate selects only invoices subject to withholding tax, identified by a document type of Professional Service Fee or Professional Services and Participation. Other document types are not included on the withholding tax certificates. If a supplier had neither Professional Service Fee invoices nor Professional Services and Participation invoices, Oracle Payables does not generate a withholding tax certificate for that supplier.

You can assign document types to your invoices in the globalization flexfield in the Invoices window. For more information, see Assigning Document Types.

Adjusting Invoice Amounts for Inflation

To meet Chilean legal requirements, the withholding tax certificates must show both historical amounts and inflation-adjusted amounts for the gross invoice amounts and the tax withheld amounts in a tax year.

The Chilean government publishes price index values monthly to measure inflation. You can use the Price Indexes window in the General Ledger responsibility to define price indexes. You must enter the price index value for each month of the calendar year for which you print certificates. The effective dates of the price index values must match the beginning and ending dates of the calendar months.

When you submit the Chilean Payables Withholding Certificate, Oracle Payables uses the price index that you select to adjust the invoice amounts for inflation. Oracle Payables uses the price index values to calculate the inflation factors representing the inflation rates.

The invoice amounts must be adjusted for inflation for the period range from the invoice date through the end of the calendar year. Chilean law mandates that an inflation factor be used to adjust amounts for inflation. The historical invoice amounts are multiplied by the inflation factor to calculate the adjusted amounts. The inflation factors are calculated based on this formula:

Inflation Factor = (Index Value for Month Before Last Month of Period Range / Index Value for Month Before First Month of Period Range)

For example, if the invoice date is in February, the inflation factor is equal to the index value for January divided by the index value for November. If the invoice date is July, the inflation factor is equal to the index value for June divided by the index value for November.

Note: Since the formula for the inflation factor uses an index value from the month before the first month of the period range, you must define the index value for the last period of the previous year, in addition to defining the index values for the current year, before you can calculate inflation for the current year. For example, before you calculate inflation for 2001, you must define the index value for December 2000 so that this index value can be used to calculate the inflation factor for January 2001.

For more information about the certificates created by the Chilean Payables Withholding Certificate, see Chilean Payables Professional Fees Certificate, Chilean Payables Professional Fees and Participation Certificate, and Chilean Payables Withholding Certificate Summary Report.

Note: You can only run the Chilean Payables Withholding Certificate for a fiscal year that has a status of Closed or Permanently Closed for all periods.

Use the Standard Request Submission windows to submit the Chilean Payables Withholding Certificate.

Report Modes

You can run the Chilean Payables Withholding Certificate in different modes to meet different reporting needs. Enter the mode that you want in the Report Mode parameter when you submit the Chilean Payables Withholding Certificate. Oracle Payables for Chile provides these report modes:

Preview

Use the Preview mode to generate preliminary certificates as well as a Chilean Payables Withholding Certificate Summary report listing all the certificates. You can use the preliminary certificates to check your withholding information for accuracy and completeness.

Oracle Payables does not assign certificate numbers to certificates generated in Preview mode.

After you run the Chilean Payables Withholding Certificate in Preview mode, you can only rerun the report in Preliminary mode or Final Generation mode

Note: You can only run the Chilean Payables Withholding Certificate for a fiscal year that has a status of Closed or Permanently Closed for all periods. If you run the Chilean Payables Withholding Certificate in Preview mode for a year that has periods with a status of Closed, and you find that you need to change the withholding invoice information for the year, you can reopen the closed periods and make the changes. Then you can run the Chilean Payables Withholding Certificate in Preview mode again to verify the changed information.

If you assign the periods a status of Permanently Closed before running the Chilean Payables Withholding Certificate in Preview mode, you cannot make any more changes to the invoice information for those periods.

Final Generation

After you determine that the results of the certificates printed in Preview mode are correct, use the Final Generation mode to print the official certificates for the year. You can optionally run the Chilean Payables Withholding Certificate Summary report to show summarized information for these certificates.

Oracle Payables assigns certificate numbers to certificates generated in Final Generation mode. The certificate numbers are based on the document sequence you assigned to the Chilean Withholding Tax Certificate document category.

Each supplier can have only one final certificate per year. Oracle Payables assigns certificate numbers only for suppliers that have the Allow Withholding Tax option enabled. The certificate numbering follows the alphabetical order of the supplier names.

When you generate final certificates, Oracle Payables stores information about the certificates, including the certificate number, calendar year, supplier taxpayer ID, supplier number, and price index. The Chilean Payables Withholding Certificate uses this information to reprint certificates when you run the report in Reprint mode.

After you run the Chilean Payables Withholding Certificate in Final Generation mode, you can only rerun the report in Review mode or Reprint mode.

Note: Once you run the Chilean Payables Withholding Certificate in Final Generation mode for a particular year, you must not make any more changes, such as voiding invoices, to the invoice information for that year. If you assign the periods for that year a status of Permanently Closed, Oracle Payables prevents you from changing any invoice information for those periods.

Even if the periods only have a status of Closed, however, you must not reopen the periods and make any more changes to the withholding invoice information for the year. If you do make changes after generating the final certificates, the information on the certificates will be inconsistent with the supplier information stored in your General Ledger. For this reason, you should ensure that you enter all the information for invoices subject to withholding tax for a year before you run the Chilean Payables Withholding Certificate in Final Generation mode for that year.

Review

Use the Review mode to reprint the Chilean Payables Withholding Certificate Summary report that Oracle Payables created when you ran the Chilean Payables Withholding Certificate in Final Generation mode. You can use the summary report to review summarized information for all the certificates created in a particular year.

Note: The information on the reprinted summary report is the same as the information on the original summary report unless you purged data from Oracle Payables after creating the original summary report. If you purged invoices with withholding tax, the reprinted summary report shows zeros for the tax withheld amounts.

After you run the Chilean Payables Withholding Certificate in Review mode, you can only rerun the report in Review mode or Reprint mode.

Reprint

Use the Reprint mode to reprint the final withholding certificate for a particular supplier in a particular year. You can choose the supplier that you want by entering the supplier taxpayer ID in the Taxpayer ID (Reprint) parameter. In this case, the Price Index and Print Company Information parameters are not used. Instead, Oracle Payables reprints the certificate with the information stored when the certificate was originally created.

Note: The information on the reprinted certificate is the same as the information on the original certificate, except for the report date. The report date for a reprinted certificate is the reprint date.

After you run the Chilean Payables Withholding Certificate in Reprint mode, you can only rerun the report in Review mode or Reprint mode.

Prerequisites

Report Parameters

Legal Entity

Enter the legal entity that you want to report on.

Ledger Currency

Enter the currency to use for the report. The default value is the default currency of the primary ledger. If the primary and reporting ledger both use the same default currency, choose either primary or reporting ledger from the list of values. You can also choose any other currency defined for the reporting ledger.

Certificate Year

Enter the four-digit calendar year for which you want to print certificates. You should only enter years that have a status of Closed or Permanently Closed for all periods.

Report Mode

Select the mode in which you want to run the report. Choose one of these modes:

Taxpayer ID (Reprint)

If you are running the report in Reprint mode, select the taxpayer ID of the supplier for whom you want to reprint a withholding certificate. In this case, the remaining parameters are not used. Instead, Oracle Payables reprints the certificate with the information stored when the certificate was originally created.

If you are not running the report in Reprint mode, leave this parameter blank.

Price Index

Select the price index that you want to use to adjust the gross amounts and withheld tax amounts for inflation.

Print Company Information

Enter Yes if you want to print company information in the headings of the report. Enter No if you do not want to print company information. The default for this parameter is Yes.

Related Topics

Using Standard Request Submission, Oracle Applications User Guide

Setting Up Withholding Tax, Oracle Payables User Guide

Entering Suppliers, Oracle Payables User Guide

Opening and Closing Accounting Periods, Oracle General Ledger User Guide

Chilean Payables Professional Fees Certificate

Use the Chilean Payables Professional Fees Certificate (Certificado Sobre Honorarios) to certify that you withheld taxes from the fees that you paid to an independent contractor during a particular tax year for professional service rendered. Before you send the certificate to the supplier, your company's legal representative must sign the certificate in order to make the certificate legally valid.

For each month of the year, the Fees Certificate shows both the historical and the inflation-adjusted values for the gross amount of the professional service fees subject to tax and the amount of tax withheld.

Oracle Payables generates Fees Certificates along with Fees and Participation Certificates when you run the Chilean Payables Withholding Certificate. The Fees Certificate is generated for suppliers who have invoices with a document type of Professional Service Fee but do not have invoices with a document type of Professional Services and Participation. For more information about submitting the Chilean Payables Withholding Certificate, see Chilean Payables Withholding Certificate Report Overview.

Report Headings

In this heading... Oracle Payables prints...
Company Name Your company name
Address Your company address
Taxpayer ID Your company taxpayer ID
Service Type The service type
<Title> Professional Fees Certificate
Certificate Number The certificate number
<City> The city of your company address
<Date> The date you ran the report
<Text> The text of the certificate, including your company name, the supplier name, the supplier's taxpayer ID, and the fiscal year of the certificate

Column Headings

In this column... Oracle Payables prints...
Periods The calendar month of the invoice date
Gross Income Taxable Service Fee The gross amount of the professional service fees for the month, as recorded on invoices with the document type Professional Service Fee
Amount Withheld The amount of tax withheld for the month
Price Index The inflation adjustment inflation factor
Adjusted Amount - Taxable Service Fee The gross professional fees amount multiplied by the inflation factor
Adjusted Amount - Amount Withheld The amount of tax withheld multiplied by the inflation factor
Total The totals for the certificate
<Text> The text of the certificate

Chilean Payables Professional Fees and Participation Certificate

Use the Chilean Payables Professional Fees and Participation Certificate (Certificado Sobre Honorarios y Participacion) to certify that you withheld taxes from the fees that you paid to a supplier during a particular tax year for professional service rendered and from participation amounts paid to the supplier. Participation consists of salaries and the monetary equivalent of company stock paid to members of your company's board of directors. Before you send the certificate to the supplier, your company's legal representative must sign the certificate in order to make the certificate legally valid.

For each month of the year, the Fees and Participation Certificate shows both the historical and the inflation-adjusted values for the gross amount of the professional service fees subject to tax, the gross amount of the participation fees subject to tax, and the amount of tax withheld.

Oracle Payables generates Fees and Participation Certificates along with Fees Certificates when you run the Chilean Payables Withholding Certificate. The Fees and Participation Certificate is generated for suppliers who have both invoices with a document type of Professional Service Fee and invoices with a document type of Professional Services and Participation. For more information about submitting the Chilean Payables Withholding Certificate, see Chilean Payables Withholding Certificate Report Overview.

Report Headings

In this heading... Oracle Payables prints...
Company Name Your company name
Address Your company address
Taxpayer ID Your company taxpayer ID
Service Type The service type
<Title> Professional Fees and Participation Certificate / Allowance to Directors Paid by Public Corporations
Certificate Number The certificate number
<City> The city of your company address
<Date> The date you ran the report
<Text> The text of the certificate, including your company name, the supplier name, the supplier's taxpayer ID, and the fiscal year of the certificate

Column Headings

In this column... Oracle Payables prints...
Periods The calendar month of the invoice date
Gross Income - Taxable Service Fee The gross amount of the professional service fees for the month, as recorded on invoices with the document type Professional Service Fee
Gross Income - Taxable Participation Fee The gross amount for participation or assignment for the month, as recorded on invoices with the document type Professional Services and Participation
Amount Withheld The amount of tax withheld for the month
Price Index The inflation adjustment inflation factor
Adjusted Amount - Taxable Service Fee The gross professional fees amount multiplied by the inflation factor
Adjusted Amount - Taxable Participation Fee The gross participation or assignment amount multiplied by the inflation factor
Adjusted Amount - Amount Withheld The amount of tax withheld multiplied by the inflation factor
Total The totals for the certificate
<Text> The text of the certificate

Chilean Payables Withholding Certificate Summary Report

Use the Chilean Payables Withholding Certificate Summary report to review summarized information about each supplier for whom you generated an official certificate within a legal entity. For each certificate, the Chilean Payables Withholding Certificate Summary report shows the certificate number, the supplier, the last date the certificate was printed, the taxable amounts for service fees and participation, if applicable, and the amount of tax withheld.

Oracle Payables generates the Chilean Payables Withholding Certificate Summary report in addition to the withholding tax certificates when you submit the Chilean Payables Withholding Certificate in Preview or Final Generation mode. After you create final certificates for a year, you can also reprint the Chilean Payables Withholding Certificate Summary report for that year by submitting the Chilean Payables Withholding Certificate in Review mode. For more information about submitting the Chilean Payables Withholding Certificate, see Chilean Payables Withholding Certificate Report Overview.

Report Headings

In this heading... Oracle Payables prints...
<Ledger> The ledger name
Calendar Year The calendar year of the certificates
<Report Title> Withholding Tax Certificate Summary Report
<Date and Time> The date and time that you ran the report
Page The current and total page numbers

Column Headings

In this column... Oracle Payables prints...
Certificate Number The certificate number
Supplier Name The supplier name
Taxpayer ID The supplier taxpayer ID
Last Print Date The most recent date the certificate was printed or reprinted
Taxable Service Fee The gross service fee amount that is subject to tax
Taxable Participation Fee The gross participation amount that is subject to tax
Amount Withheld The amount of tax withheld for the year
Total The totals for the report

Chilean Payables Supplier Statement Report

Use the Chilean Payables Supplier Statement report to provide supplier information in response to supplier inquiries. You can run the Chilean Payables Supplier Statement report for a single supplier, a range of suppliers, or all your suppliers.

For each supplier listed, the Chilean Payables Supplier Statement report shows all accounted transactions within a specified range of dates. Always run the Payables Accounting Process before you submit this report.

Note: Payables only prints supplier information for suppliers that have a bill-to and ship-to address defined at the supplier header level.

The Chilean Payables Supplier Statement report contains two sections. The first section lists all the transactions, including invoices, payments, withholdings, and applied prepayments. The second section lists unapplied or partially applied prepayments.

The report groups transactions by currency. If you run the report by ledger currency, the report prints only one currency section for each supplier. If you run the report by transaction currency, the report prints as many sections as there are transactions in that currency for each supplier.

Use the Standard Request Submission windows to submit the Chilean Payables Supplier Statement report.

Report Parameters

Ledger Currency

Enter the currency to use for the report. The default value is the default currency of the primary ledger. If the primary and reporting ledger both use the same default currency, choose either primary or reporting ledger from the list of values. You can also choose any other currency defined for the reporting ledger.

Report Currency

Choose the currency type that you want to show on the report. Valid values are:

Supplier Name From

Enter the name of the supplier that you want to report from.

Supplier Name To

Enter the name of the supplier that you want report to.

Supplier Taxpayer ID

Enter the taxpayer ID of the supplier that you want to include in the report. This parameter is exclusive to the Supplier Name From and Supplier Name To parameters.

Note: To report on all suppliers, leave the Supplier Name From, Supplier Name To, and Supplier Taxpayer ID parameters blank.

Start Date

Enter the earliest accounting date for transactions that you want to include in the report. The supplier beginning balance is computed for all transactions made before this date.

End Date

Enter the latest accounting date for transactions that you want to include in the report.

Note: The Chilean Payables Supplier Statement report shows only transactions that were accounted within your specified Start Date and End Date. Accounting dates for transactions may differ from the document dates.

Report Headings

This table shows the report headings.

In this heading… Oracle Payables prints…
<Company Name> Your company name
<Report Title> Supplier Statement
Report Date The date and time that you ran the report
Page The current and total pages of the report
Supplier Name The supplier name
Supplier Tax ID The supplier taxpayer ID
Supplier Address The supplier address
From Date The accounting date that you entered in the Start Date parameter to report transactions from
To The accounting date that you entered in the End Date parameter to report transactions to

Column Headings

Columns contain different information depending on whether the transaction is an invoice, payment, prepayment, or withholding.

This table shows the column headings.

In this column… Oracle Payables prints…
Date In the first section of the report:
  • Invoice - The invoice date

  • Payment - The check date

  • Prepayment - The invoice prepayment date

  • Withholding - The accounting date in the distributions table

    In the second section of the report, the invoice prepayment date.

Document Type In the first section of the report, the transaction type description. In the second section, Prepayments.
Transaction - Number The transaction number:
  • Invoice - The invoice number

  • Payment - The payment document number

  • Prepayment (applied) - The invoice prepayment number

Transaction - Currency The currency code of the original transaction.
Transaction - Amount The transaction amount in the transaction currency. In the first section of the report:
  • Invoice - The total amount of item and tax line distributions

  • Payment - The payment amount

  • Prepayment - The total amount of applied item lines

  • Withholding - The total amount of withholdings applied on invoices, including prepayment invoices


In the second section of the report, the total amount of item lines and withholding tax lines is printed for unapplied or partially applied prepayments.
Transaction/Ledger currency - Amount The transaction amount in original or ledger currency.
Transaction/Ledger Currency - Remaining Amount The remaining balance of the transaction. For invoices, the invoice amount due is printed. For prepayments, the unapplied item line distribution amount is printed in the second section of the report.
Transaction/Ledger Currency - Balance The supplier running total in original currency or ledger currency.
Reference Information - Date The document reference date. For payments, applied prepayments, and unapplied prepayments, the invoice date may be referenced. If withholdings are calculated at the time of approval, the invoice date is listed.
Reference Information - Document Type The type of document that is referenced:
  • Payment - Invoices

  • Prepayment - Invoices for unapplied prepayments that are partially applied and applied prepayments

  • Withholding - Invoices or Payments depending on the calculation method

Reference Information - Transaction Number The transaction number of the transaction that is referenced:
  • Payment - The invoice number

  • Prepayment - The invoice number for unapplied prepayments that are partially applied and applied prepayments

  • Withholding - The invoice or payment document number depending on the calculation method

Row Headings

This table shows the row headings.

In this row… Oracle Payables prints…
Beginning Balance The beginning balance and the currency code for the transactions with this currency code. If submitted in transaction currency, the report displays a beginning balance for each currency code. If submitted in the ledger currency, the report prints only the beginning balance of the ledger currency code.
The beginning balance is calculated with the information that exists in Payables subledger accounting entries.
<Report Section 2 Title> Unapplied Prepayments or Partially Applied Prepayments.
Ending Balance The ending balance and the currency code for the transactions with this currency code. In the first section of the report, the ending balance with all the transactions that were already applied for the supplier is printed. In the second section, the report prints what would be the ending balance if the unapplied transactions are applied.

Related Topics

Using Standard Request Submission, Oracle Applications User Guide

Oracle Assets

Inflation Adjustment Overview

In Chile, companies must adjust the cost, accumulated depreciation, and year-to-date depreciation expense amounts of their assets for inflation. The Chilean government only requires companies to report inflation-adjusted amounts for their assets; you do not need to report historical amounts.

If you do not use MRC, you can choose the adjusted-only option in Oracle Assets. With the adjusted-only option, you perform inflation adjustment in your corporate depreciation book. You should only choose this option if you do not expect to implement MRC at any time, because once your corporate book contains inflation adjustment transactions, you cannot use it as the MRC primary book.

If you want to use the Multiple Reporting Currencies (MRC) feature, however, you should choose the historical/adjusted option in Oracle Assets, even though you are not legally required to report historical amounts. The historical/adjusted option lets you maintain and report both historical amounts and inflation-adjusted amounts by using two separate depreciation books. Keep the historical amounts in a corporate book and the inflation-adjusted amounts in a tax book.

You need to use a historical depreciation book as your primary MRC book to avoid including inflation adjustment amounts when MRC converts your transactions to another currency. You must not use an adjusted depreciation book as your MRC primary book.

Inflation Adjustment Setup

This section describes how to set up Oracle Assets for Chile for the inflation adjustment process. Use this checklist to help you complete the appropriate steps.

Step Task
1 Enable Automatic Revaluation Rate Calculation
2 Define Price Indexes
3 Set Up Depreciation Books
4 Set Up Asset Categories
5 Define Inflation Start Dates
6 Set Up Assets in a Depreciation Book

Set Up Depreciation Books

Use the Book Controls window and the globalization flexfield to set up your depreciation books for inflation adjustment. You can enable or disable inflation adjustment at depreciation book level. If you enable inflation adjustment for a depreciation book, you can choose to enable or disable inflation adjustment for individual asset categories and assets when you define them. If you disable inflation adjustment for a depreciation book, none of the assets in that book can be adjusted.

To set up depreciation books:

  1. Navigate to the Book Controls window.

  2. Enter a depreciation book.

  3. Navigate to the globalization flexfield.

  4. Enter Yes in the Adjust for Inflation field to enable inflation adjustment for assets in this depreciation book. Enter No to disable inflation adjustment for all assets in this book.

  5. In the Journal Category for Depreciation Expense of Retired Assets field, enter the journal category that you want to use for the journal entries created by the Inflation Adjustment of Retired Assets process.

    After you perform inflation adjustment for this book, you can view information about the most recent inflation adjustment in the next two fields. Oracle Assets displays the period name for the most recent inflation adjustment in the Last Inflation Adjustment Period field, and the revaluation ID for the most recent inflation adjustment in the Last Inflation Adjustment field.

  6. Press the OK button.

  7. In the Book Controls window, navigate to the Calendar tabbed region.

  8. In the GL Ledger field, select the General Ledger ledger that you want to transfer this depreciation book's journal entries to. Select the General Ledger ledger for your adjusted depreciation book.

  9. Complete the Allow GL Posting check box according to your depreciation book's requirements, as shown in this table:

    For this book… Follow this step…
    Adjusted tax book (historical/adjusted option in Oracle Assets) or adjusted corporate book (adjusted-only option in Oracle Assets) Check the Allow GL Posting check box
    Historical corporate book (historical/adjusted option in Oracle Assets) Do not check the Allow GL Posting check box
  10. Navigate to the Accounting Rules tabbed region.

  11. If you want to allow revaluation in this book, check the Allow Revaluation check box.

  12. If you want to revalue accumulated depreciation, check the Revalue Accumulated Depreciation check box.

  13. If you want to revalue year-to-date depreciation, check the Revalue YTD Depreciation check box.

  14. If you want to retire revaluation reserve, check the Retire Revaluation Reserve check box. In Chile, you usually do not retire revaluation reserve.

  15. If you want to amortize revaluation reserve, check the Amortize Revaluation Reserve check box. In Chile, you usually do not amortize revaluation reserve.

  16. If you want to revalue fully reserved assets, check the Revalue Fully Reserved Assets check box. In Chile, you usually do not revalue fully reserved assets.

    If you do choose to revalue fully reserved assets, enter a life extension factor in the Life Extension Factor field. To maintain the current asset life without extending it, enter 1. You can also enter the maximum number of times an asset can be revalued as fully reserved in the Maximum Revaluations field and enter a life extension ceiling in the Life Extension Ceiling field.

  17. Navigate to the Tax Rules region.

  18. If you are defining a tax book and you want to include CIP assets in the tax book, check the Allow CIP Assets check box. You must include CIP assets in your adjusted tax book, if you are using the historical/adjusted option, so that you can adjust the CIP assets for inflation in the adjusted tax book.

  19. Save your work.

Related Topics

Defining Depreciation Books, Oracle Assets User Guide

Asset Management in a Highly Inflationary Economy (Revaluation), Oracle Assets User Guide

Construction-in-Process (CIP) Assets, Oracle Assets User Guide

Set Up Asset Categories

Use the Asset Categories window with the globalization flexfield and the Default Depreciation Rules window to set up your asset categories for inflation adjustment. In the Asset Categories window, you can specify the revaluation reserve account that you want to use to offset the inflation adjustments for assets in a category in a particular depreciation book.

In the globalization flexfield, you can enable or disable inflation adjustment for the asset category in a particular depreciation book. If you enable inflation adjustment for an asset category in a book, you can choose to enable or disable inflation adjustment for individual assets when you define them. If you disable inflation adjustment for an asset category in a book, none of the assets in that category can be adjusted in that book.

In this way, you can choose to adjust an asset category in one depreciation book while preventing the same asset category from being adjusted in another book. You can also choose to adjust some asset categories in a depreciation book for inflation while preventing other categories in the same book from being adjusted.

If inflation adjustment is disabled for an entire depreciation book, however, none of the asset categories in that book can be adjusted.

In the Default Depreciation Rules window, you can assign a price index to the asset category. The price index is used to calculate the inflation rate for all the assets in this asset category.

To set up asset categories:

  1. Navigate to the Asset Categories window.

  2. Enter an asset category.

  3. Navigate to the General Ledger Accounts region.

  4. Enter a depreciation book in the Book field.

  5. In the Revaluation Reserve field, enter the revaluation reserve account used to offset inflation adjustments for assets in this category.

  6. Navigate to the globalization flexfield.

  7. Enter Yes in the Adjust for Inflation field to enable inflation adjustment for assets in this asset category. Enter No to disable inflation adjustment for all assets in this category.

    If inflation adjustment is enabled for this depreciation book, the Adjust for Inflation field defaults to Yes. Otherwise, the Adjust for Inflation field defaults to No.

  8. Press the OK button.

  9. In the Asset Categories window, press the Default Rules button.

    The Default Depreciation Rules window appears.

  10. In the Price Index field, enter the price index that you want to use to calculate the inflation rate for this asset category.

  11. Enter appropriate information in the remaining fields.

  12. Save your work.

Related Topics

Setting Up Asset Categories, Oracle Assets User Guide

Asset Management in a Highly Inflationary Economy (Revaluation), Oracle Assets User Guide

Set Up Assets in a Depreciation Book

Use the globalization flexfield in the Books window to enable or disable inflation adjustment for individual assets. You enable or disable inflation adjustment for an asset in a particular depreciation book.

In this way, you can choose to adjust an asset in one depreciation book while preventing the same asset from being adjusted in another book. You can also choose to adjust some assets in a certain category in a depreciation book for inflation while preventing other assets in the same category and book from being adjusted.

If inflation adjustment is disabled for an entire depreciation book or an entire category in a book, however, none of the assets in that book or category can be adjusted.

To set up assets in a depreciation book:

  1. Navigate to the Asset Workbench.

  2. Enter or query an asset.

  3. Navigate to the Books window.

  4. Enter a depreciation book in the Book field.

  5. Navigate to the Depreciation region.

  6. Navigate to the globalization flexfield.

  7. Enter Yes in the Adjust for Inflation field to enable inflation adjustment for the asset. Enter No to disable inflation adjustment for the asset.

    If inflation adjustment is enabled for this depreciation book and for this category in this book, the Adjust for Inflation field defaults to Yes. Otherwise, the Adjust for Inflation field defaults to No.

  8. Press the OK button.

Related Topics

Asset Setup Processes (Additions), Oracle Assets User Guide

Revaluing Assets

Example for adjusting an asset for inflation

This example shows how inflation rates and adjustment amounts are calculated to adjust a capitalized asset for inflation in Chile. Assume that the price index values for the given periods are as shown in this table:

Period Price Index Value
January 281.17
February 283.52
March 284.41

The inflation rate in this example is calculated with a precision of ten decimal positions. The inflation rate is calculated according to this formula:

(Index Value for Previous Period / Index Value for Period Prior to Previous Period) - 1

For example, the March Inflation Rate is (283.52 / 281.17) - 1, or 0.0083579329

Assume that a company has an asset with the values in this table at the beginning of March:

Cost Accumulated Depreciation YTD Depreciation Expense
9,176 1,147 152

Assume also that there are no cost adjustments other than the inflation adjustment in March.

The inflation adjustment amount for cost in the current period is calculated on the current cost of the asset, including any cost adjustments made in the period before inflation adjustment is performed.

Note: If you want to adjust current period cost adjustment amounts for inflation, make the cost adjustments before you perform inflation adjustment for the current period. Otherwise, make the cost adjustments after you perform inflation adjustment for the current period.

The current cost for an asset is calculated according to this formula:

Beginning Cost + Current Period Cost Adjustments

For example, the March Current Cost is 9,176 + 0, or 9,176

The current period cost inflation adjustment is calculated according to this formula:

Current Cost * Inflation Rate

For example, the March Inflation Adjustment is 9,176 * 0.0083579329, or 77

The adjusted cost at the end of the period is calculated according to this formula:

Current Cost + Inflation Adjustment

For example, the March Adjusted Cost is 9,176 + 77, or 9,253

The inflation adjustment amounts for accumulated depreciation and YTD depreciation expense in the current period are calculated on the current accumulated depreciation and current YTD depreciation expense of the asset, before the asset is depreciated for the period.

The current period accumulated depreciation inflation adjustment is calculated according to this formula:

Current Accumulated Depreciation * Inflation Rate

For example, the March Inflation Adjustment is 1,147 * 0.0083579329, or 10

The adjusted accumulated depreciation at the end of the period, but before depreciation is run for the period, is calculated according to this formula:

Current Accumulated Depreciation + Inflation Adjustment

For example, the March Adjusted Accumulated Depreciation is 1,147 + 10, or 1,157

The current period YTD depreciation expense inflation adjustment is calculated according to this formula:

Current Depreciation Expense * Inflation Rate

For example, the March Inflation Adjustment is 152 * 0.0083579329, or 1

The adjusted YTD depreciation expense at the end of the period, but before depreciation is run for the period, is calculated according to this formula:

Current Depreciation Expense + Inflation Adjustment

For example, the March Adjusted Depreciation Expense is 152 + 1, or 153

This table shows the journal entry to record the inflation adjustments in March:

Account Debit Credit
Cost 77  
Depreciation Expense 1  
     Accumulated Depreciation   10
     Revaluation Reserve   68

Example for adjusting a CIP asset for inflation

This example shows how inflation rates and adjustment amounts are calculated to adjust a CIP asset for inflation in Chile.

When you build a CIP asset, you add the cost amounts resulting from invoice lines. The invoice line amounts added in the current period are never adjusted for inflation in the current period. The adjustment amount for the current period is calculated only on the asset's adjusted cost as of the beginning of the period.

Assume that the price index values for the given periods are as shown in this table:

Period Price Index Value
November 278.75
December 279.76
January 281.17
February 283.52

The inflation rates in this example are calculated with a precision of ten decimal positions. The inflation rates are calculated according to this formula:

(Index Value for Previous Period / Index Value for Period Prior to Previous Period) - 1

For example, the January Inflation Rate is (279.76 / 278.75) - 1, or 0.0036233183

February Inflation Rate is (281.17 / 279.76) - 1, or 0.0050400343

Assume that construction began on a CIP asset in December and that the invoice line amounts added each period are as shown in this table:

Period Invoice Line Amount
December 20,000
January 18,000
February 0

The current period cost inflation adjustment is calculated according to this formula:

Beginning Cost * Inflation Rate

The adjusted cost at the end of the period is calculated according to this formula:

Beginning Cost + Inflation Adjustment + Invoice Line Amounts

For example, the December Adjusted Cost is 0 + 0 + 20,000, or 20,000

January Inflation Adjustment is 20,000 * 0.0036233183, or 72

January Adjusted Cost is 20,000 + 72 + 18,000, or 38,072

This table shows the journal entry to record the inflation adjustment in January:

Account Debit Credit
Cost 72  
     Revaluation Reserve   72

February Inflation Adjustment is 38,072 * 0.0050400343, or 192

February Adjusted Cost is 38,072 + 192 + 0, or 38,264

This table shows the journal entry to record the inflation adjustment in February:

Account Debit Credit
Cost 192  
     Revaluation Reserve   192