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Oracle® Fusion Applications Financials Implementation Guide
11g Release 1 (11.1.2)
Part Number E20375-02
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20 Define Assets Configuration

This chapter contains the following:

Asset Category Key Flexfield: Explained

System Controls: Explained

Fiscal Years: Explained

Asset Key Flexfield: Explained

Asset Categories: Explained

Location Flexfield: Explained

Creating Calendars: Points to Consider

Prorate and Retirement Conventions: Explained

Depreciation Methods: Explained

Creating or Modifying Asset Books: Points to Consider

Oracle Fusion Assets Profile Options: Critical Choices

Asset Category Descriptive Flexfield: Explained

Oracle Fusion Assets Descriptive Flexfields: Explained

Asset Category Key Flexfield: Explained

Define the Asset Category key flexfield so that you can create categories and group assets by financial information in relevant categories. Define your Asset Category flexfield segments to fit the specific needs of your organization. You must define at least one subcategory segment to allow for distinctions within a major category.

You can define up to seven segments for your Asset Category key flexfield. Since Oracle Fusion Assets only displays a limited number of characters on its forms and reports, you may want to use only two or three segments so that all of them can be displayed. Also, since you must define depreciation rules for each category flexfield combination, more segments require more setup and maintenance effort.

Warning

Plan your flexfield carefully. Once you begin entering assets using the flexfield, you cannot change it.

System Controls: Explained

System controls provide information about the structure of your company.

Define system controls by identifying:

Enterprise Name

The enterprise name establishes the name that appears on Oracle Fusion Assets reports.

Oldest Date Placed in Service

The oldest date placed in service controls what dates are valid to place assets in service and on what date to begin your calendars. You can only update the oldest date placed in service before you assign any calendars to depreciation books.

Flexfield Structures

Define your company's Category, Location, and Asset Key flexfields structures, which will be used to record transactions.

Configure flexfield segments to capture data that represents the values of attributes. You can define any number of segments for each flexfield, but Assets supports only one structure. The administrator must choose a structure for each key flexfield that will be used to record transactions.

Automatic Asset Numbering

The starting asset number defines the number to begin automatically numbering your assets. Note that some asset numbers may be skipped.

When you use automatic numbering, then manual numbering must be less than the starting asset number that you have established. In other words, if you start automatic numbering at 50,001, manual numbering must be between 1 and 50,000. Asset numbers with a letter in them are not reserved for automatic asset numbering, since the automatic numbers are a numerical sequence.

If you are converting from another system, you can enter a starting number greater than the number of assets you want to convert so converted assets keep the same number from the previous system. For example, if you are converting 75,000 assets, you can enter 100,001 as the starting number to reserve the numbers 1 to 100,000 for manual asset numbering. Note that adding the 75,000 assets will increment the automatic numbering sequence by 75,000 (automatically numbered assets will begin at 175,001).

Fiscal Years: Explained

A fiscal year is a standard set of periods used to prepare annual financial statements for reporting and tax purposes. Normally its twelve months period, this will vary from business to business and also country to country. A fiscal year can also be referred to as a financial year or a budget year.

You need to define the start date and end date for each of your fiscal years starting from the earliest date placed in service through at least one fiscal year beyond the current fiscal year. You need to define at least one calendar for each fiscal year to break the fiscal year into multiple reportable periods, such as months.

Note

Depreciation will fail if the current fiscal year is the last fiscal year you have set up.

Consider the following when setting up your fiscal years.

Multiple Fiscal Years

You can set up multiple fiscal years and assign different fiscal years to your different corporate books to meet the various reporting and tax requirements.

Tax Books

The fiscal year should be the same for a corporate book and all its associated tax books. In other words, the calendar for a tax book must use the same fiscal year name as the calendar for its associated corporate book.

Asset Key Flexfield: Explained

Use the Asset Key flexfield in Oracle Fusion Assets to group your assets by non-financial information. You design your Asset Key flexfield to record the information you want. You can assign the same asset key to many assets to easily find similar assets. All Assets transaction pages allow you to query assets using the asset key, and help you find your assets without an asset number.

Even If you choose not to track assets using the asset key, you must define at least one segment Asset Key flexfield without validation because the Asset Key flexfield structure is required to set up the system controls.

Warning

Plan your flexfield carefully. Once you begin entering assets using the flexfield, you cannot change it.

Asset Categories: Explained

Asset categories let you define information that is common to a group of assets, such as the depreciation method and the prorate convention.

General category information includes a description of the category, and default information such as whether assets in this category are leased or owned, personal or real property, and whether they are capitalized. You can also specify if assets by default are in physical inventory or are enabled in Oracle Fusion Assets.

Asset categories also contain:

General Ledger Accounts

You assign General Ledger accounts to your category during category setup.

Assign the following General Ledger accounts when defining asset categories:

Default Depreciation Rules

Set up default depreciation rules for each category in each book. The default depreciation rules that you set up for a category also depend upon the date placed in service ranges you specify. Oracle Fusion Assets defaults the depreciation rules when you add an asset, to help you add assets quickly. If the default does not apply, you can override many of the defaults for an individual asset.

Set up the following default depreciation rules when defining asset categories:

Tax Book Depreciation Rules

The following depreciation rules are specific only to tax books:

Default Subcomponent Depreciation Rules

The following depreciation rules are specific only to assets that are subcomponent assets of parent assets:

Group Asset Depreciation Rules

The following depreciation rules are specific only to group assets and their member assets:

Location Flexfield: Explained

Oracle Fusion Assets uses the Location flexfield to group and track your assets by physical location. Define the Location flexfield structure to fit the specific needs of your organization. Choose the number of segments, the length of each segment, the name, and the order of each segment in your Location flexfield. You must define a state segment and up to six other location segments.

For example, if you do business internationally (or plan to do so in the future), you may want to track the country an asset is in. You may also want to include segments for state, city, and site. If you track asset locations in more detail, for example, if you use barcodes, you can also add segments for the building and room number.

The location name (all segments concatenated) appears on forms and reports, which display only a limited number of characters. You may want to abbreviate some location segment values.

Warning

Plan your flexfield carefully. Once you begin entering assets using the flexfield, you cannot change it.

Creating Calendars: Points to Consider

Calendars break down your fiscal year into accounting periods. Define your calendars with as many periods as necessary for your reporting and tax regulation requirements. Each book you set up requires a depreciation calendar and a prorate calendar. You can use one calendar for multiple depreciation books and as both the depreciation and prorate calendar for a book.

Corporate books can share the same calendar. A tax book can have a different calendar than its associated corporate book. The calendar for a tax book must use the same fiscal year name as the calendar for the associated tax book.

Important

You must initially set up all calendar periods from the period corresponding to the oldest date placed in service to the last day of the current fiscal year. You must set up at least one period before the current period. At the end of each fiscal year, Oracle Fusion Assets automatically sets up the periods for the next fiscal year.

Define calendars according to your needs. For example, to define a 4-4-5 calendar, set up your fiscal years, depreciation calendar, and prorate calendar with different start and end dates, and fill in the uneven periods. You can divide annual depreciation proportionately according to the number of days in each period or evenly in each period.

Before you can set up a calendar, you must have completed setting up the following:

Depreciation Calendar

The depreciation calendar determines the number of accounting periods in your fiscal year.

Important

If you assign the depreciation calendar to a book from which you create journal entries and transfer it to your general ledger, you must set up your depreciation calendar with the same period names you set up in your general ledger.

Prorate Calendar

The prorate calendar determines what rate Assets uses to calculate annual depreciation by mapping each date to a prorate period, which corresponds to a set of rates in the rate table.

The Depreciation process uses the prorate calendar to determine the prorate period that is used to choose the depreciation rate.

Prorate and Retirement Conventions: Explained

Oracle Fusion Assets uses prorate and retirement conventions to determine how much depreciation to take in the first and last year of an asset's life.

To determine depreciation, set up:

Prorate Conventions

Define prorate conventions to determine depreciation in the first and last year of an asset's life, based on when you place the asset in service. Since assets can be acquired at any time in a given period, prorate conventions must account for every date in the fiscal year for assets to depreciate properly. The prorate convention and the date placed in service determine the prorate date. Assets uses the prorate date to determine the prorate period in your prorate calendar.

Important

You must initially set up all your prorate conventions from the convention period corresponding to the oldest date placed in service through the end of the current fiscal year. At the end of each fiscal year, Assets automatically sets up your prorate conventions for the next fiscal year.

Assets prorates the depreciation taken for an asset in its first fiscal year of life according to the prorate date. For example, if you use the half-year prorate convention, the prorate date of all assets using that convention is simply the midpoint of your fiscal year. So assets acquired in the same fiscal year take the same amount (half a year's worth) of depreciation in the first year. If however, you use the following month prorate convention, the prorate date is the beginning of the month following the month placed in service, so the amount of depreciation taken for assets acquired in the same fiscal year varies according to the month they were placed in service.

Your reporting authority's depreciation regulations determine the amount of depreciation to take in the asset's first year of life. For example, some governments require that you prorate depreciation according to the number of months you hold an asset in its first fiscal year of life. In this case, your prorate convention has twelve rate periods, one for each month of the year. Other reporting authorities require that you prorate depreciation according to the number of days that you hold an asset in its first year of life. This means that the fiscal year depreciation amount would vary depending on the day you added the asset. Thus, your prorate convention contains 365 prorate periods, one for each day of the year.

Retirement Conventions

If you do business in a country that requires you to use a different prorate convention for retirements than for additions, set up retirement conventions to determine how much depreciation to take in the last year of life, based on the retirement date.

If you retire the asset before it is fully reserved, then Assets uses the prorate date from the retirement convention to determine how much depreciation to take in the asset's last year of life.

Depreciation Methods: Explained

Depreciation methods specify how to allocate the asset cost. Use Oracle Fusion Assets predefined depreciation methods or define additional depreciation methods to accommodate your financial and accounting needs.

Consider the following when using or customizing depreciation methods.

Predefined Depreciation Methods

Assets provides the following predefined depreciation methods:

Custom Depreciation Methods

Your financial and accounting needs may require that you set up additional depreciation methods other than the predefined methods Assets includes. For example, once a depreciation method is in use, it cannot be modified. Therefore, any modification to existing rates within a method requires that you define a new depreciation method.

Define the following types of depreciation methods:

Formula-Based Depreciation Methods

Define formula-based depreciation methods when the existing methods are not adequate to handle your company's depreciation requirements.

Assets provides predefined variables and functions you use to create formula-based depreciation methods. Any formulas you create are saved for later use.

Important

It is essential that you plan and thoroughly test your custom depreciation formulas to ensure that your assets will depreciate correctly. Poorly thought out depreciation formulas can cause unexpected and incorrect depreciation rates.

Bonus Depreciation Rules

Use bonus rules to increase the annual depreciation expense for assets in the early years of an asset's life using flat-rate, straight-line, table-based, and formula-based depreciation methods. A bonus rule can have a different bonus rate for each year of the asset's life. You can modify the rate at any time for current and future fiscal years. You can use bonus rules with corporate books as well as tax books.

You can also set up negative bonus rates to amortize bonus reserve.

Note

You cannot remove the bonus rule from an asset. You can only change the bonus rule. If the asset is not required to take additional depreciation then you need to change the bonus rule to another rule with rate of zero.

Depreciable Basis Rules

Assets provides depreciable basis rules feature to accommodate depreciation method setup requirements not met by the cost or net book value calculation basis types. The combination of the depreciable basis rule and the depreciation method determine how the depreciable basis is derived.

Creating or Modifying Asset Books: Points to Consider

You can set up an unlimited number of independent asset books. Each book has its own set of depreciation rules, accounts, and calendars to organize and implement your fixed assets accounting policies more effectively. You must set up your asset books before you can add assets to them.

An asset can have different financial information and depreciation rules in each book. For example, you can make the asset cost in your tax book different from the cost in the associated corporate book. Because the books are independent, you can run depreciation for each book on a different schedule.

In Oracle Fusion Assets, user access to the data is secured at the asset book level. Each user can view and update the assets only in the asset book to which they have access.

While defining your asset books you need to select the reference data set for the following set up and lookup objects:

While defining these set up and lookup objects, you need to use the same reference data set value that you assigned to the book for which these are created. While adding an asset or performing any transaction on an asset in the book, you will see only the setup object values that share the reference data set with this book.

Before you can set up an asset book, you must have completed setting up the following:

You can define the following types of asset books:

Defining Corporate Books

An asset can belong to any number of tax books, but must belong to only one corporate book. New or existing assets must first be added to a corporate book and then can be easily copied to all the associated tax books.

You can set up multiple corporate books that create journal entries for different ledgers, or for the same ledger. In either case, you must run depreciation and create journal entries for each book. For each corporate book, you can set up multiple tax books and associate all of them to the corporate book.

Defining Tax Books

A tax book must be associated with a corporate book so that the assets and transactions are easily copied from the corporate book. This helps to maintain multiple accounting and depreciation representations for assets with minimal effort.

Tax books can have different calendars than their associated corporate books, as long as both calendars uses the same fiscal year. You can use the tax rules to control what transactions need to be copied from the corporate book to the tax book.

You can associate the tax book to ledger of its corporate book or to a different ledger. You can also optionally create journal entries and transfer to your general ledger. The different ledger must be a secondary ledger of the ledger assigned to the corporate book and the following conditions must be satisfied:

Note

When setting up a tax book that is linked to a secondary ledger, the chart of accounts and currency must be the same as the primary ledger that is linked to the corporate book.

Oracle Fusion Assets Profile Options: Critical Choices

Set profile options to specify how Oracle Fusion Assets controls access to and processes data, such as:

Parallel Request Number

This profile option controls the number of requests you can run in parallel for Assets processes that can run in parallel. For example, use this profile option to run parallel depreciation processes.


Profile Option Display Name

Default Value

Effect

Parallel Request Number

1

You can enter a number between 1 and 20 to specify the maximum number of parallel requests you want to allow. If you set a value that is greater than 1, you can run multiple processes at the same time. For example, if you set the value to 5, you can run multiple Depreciation processes.

Timing Diagnostics

You set whether timing diagnostic messages are printed in concurrent program log files. Support personnel can use this profile option as a tool to identify problems with the code.


Profile Option Display Name

Default Value

Effect of Enabling

Effect of Disabling

Timing Diagnostics

No value (No)

Enables printing of timing information

Disables printing of timing information

Cache Sizing Factor

This profile option controls the amount of database information retained in concurrent process for performance improvement.


Profile Option Display Name

Default Value

Effect

Cache Sizing Factor

25

You can set a value from 0 to 25. The number you enter controls the amount of information that can be stored in the cache. If you enter a value of 0, only one record is retained in the cache. If you enter a value of 25, a large amount of data is retained in the cache. In general, a small cache size works better for a very simple data structure. A large cache size works well for a more complex data structure, for example, setup data that uses many depreciation methods, bonus rules, depreciation ceilings, and retirement conventions.

Depreciation Single

This profile option controls the caching buffer used when you run the Depreciation process.


Profile Option Display Name

Default Value

Effect of Enabling

Effect of Disabling

Depreciation Single

No value (No)

Cache is reset after every asset

Note

Set this profile to Yes only temporarily if some assets failed previously when running the Depreciation process. In this case, rerun the Depreciation process for any set of 20 assets that failed depreciation. When this profile option is set to Yes, the log file provides information on each asset so that you can determine which asset failed. When the assets have depreciated successfully, reset the profile option to No. Running depreciation with the profile option set to Yes can slow performance considerably.

Cache is reset after every 20 assets

Batch Size

This profile option sets the batch size for the Mass Transactions process.


Profile Option Display Name

Default Value

Effect

Batch Size

200

The value indicates the number of records in a batch. For example, if you use the default value of 200, each batch contains 200 records. The value can be between 1 and 10,000.

Default Book

This profile option specifies the book that appears by default on Assets pages.


Profile Option Display Name

Default Value

Effect of Enabling

Effect of Disabling

Default Book

None

The default book appears as the value in all Assets pages where the Book field appears.

You must select a book from the menu in all Assets pages where the Book field appears.

Asset Category Descriptive Flexfield: Explained

Set up the Asset Category descriptive flexfield to store additional information based on the asset category.

Enter the category code as the reference field to base the descriptive flexfield structure on the value of your Asset Category flexfield. You define your context field values (structure names) to exactly match your concatenated Asset Category Flexfield combinations. For example, if you have a major category value of BUILDING, and a minor category value of OFFICE, your Asset Category Flexfield combination is BUILDING.OFFICE, so you define BUILDING.OFFICE as your context value. Similarly, you can define another context value as VEHICLE.DELIVERY.

Note

The segment separator, spelling, and case must exactly match your Category Flexfield combination.

You do not need to define a descriptive flexfield structure for each combination of your Asset Category flexfield. Define structures only for those categories in which you want to capture additional information (such as the license number or insurance policy number).

Warning

Plan your flexfield carefully. Once you begin entering assets using the flexfield, you cannot change it.

Oracle Fusion Assets Descriptive Flexfields: Explained

Oracle Fusion Assets allows you to record and track all standard asset information on the Assets pages. However, there may be additional information you need to record for your assets that needs to be tracked for reporting purposes. You can set up descriptive flexfields to record and track additional information in Assets. You can set up a descriptive flexfield for each asset category to collect information relevant to your business. For example, you can track the license number for cars and the square footage for buildings. When you assign a new asset to a category, you can enter the additional information in a descriptive flexfield.

The following table lists the descriptive flexfields available in Assets and their corresponding Assets pages:


Descriptive Flexfield

Associated Assets Page

Asset Category

Add Asset

Edit Source Line

Add Assets and Prepare Source Lines spreadsheets

Assets Invoices

Add Asset

Edit Source Line

Add Source Lines

Change Source Lines

Source Line Retirement

Add Assets and Prepare Source Lines spreadsheets

Bonus Rates

Create Bonus Rule

Edit Bonus Rule

Bonus Rules

Create Bonus Rule

Edit Bonus Rule

Book Controls

Create Book

Edit Book

Calendar Types

Create Calendar

Edit Calendar

Categories

Create Category

Edit Category

Category Books

Create Category

Edit Category

Category Book Defaults

Create Category

Edit Category

Ceilings

Create Ceiling

Edit Ceiling

Convention Types

Create Prorate Convention

Edit Prorate Convention

Fiscal Year

Create Fiscal Year

Edit Fiscal Year

Flat Rates

Create Depreciation Method

Edit Depreciation Method

Locations

Manage Locations

Methods

Create Depreciation Method

Edit Depreciation Method

Retirements

Cost Retirement

Unit Retirement

Source Line Retirement

System Controls

Manage System Controls

Transactions

Add Asset

Edit Source Line

Preview Add to Asset

Change Financial Details

Suspend Depreciation

Add Source Lines

Change Source Lines

Transfer Source Lines

Change Category

Perform Unplanned Depreciation

Transfer Reserve

Change Group Asset

Cost Retirement

Source Line Retirement

Unit Retirement

Transfer Asset

Adjust Units

Add Assets and Prepare Source Lines spreadsheets