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Journal Entries for Additions and Capitalizations

This section includes addition and capitalization journal entry examples for the following transactions:

Current and Prior Period Addition

Merge Mass Additions

Construction-in-Process (CIP) Addition

Deleted Mass Additions

Capitalization

Asset Type Adjustments

For manual additions, Oracle Assets gets the clearing account from the category. For mass additions, the clearing account comes from your source system.

Example: The recoverable cost is $4,000 and the method is straight-line 4 years.

Current and Prior Period Addition

You purchase and place the asset into service in Year 1, Quarter 1.



You place an asset in service in Year 1, Quarter 1, but you do not enter it into Oracle Assets until Year 2, Quarter 2. Your payables system creates the same journal entries to asset clearing and accounts payable liability as for a current period addition.


Merge Mass Additions

When you merge two mass additions, Oracle Assets adds the asset cost of the mass addition that you are merging to the asset account of the mass addition you are merging into. Oracle Assets records the merge when you perform the transaction. Oracle Assets does not change the asset clearing account journal entries it creates for each line, so each of the appropriate clearing accounts clears separately.

As an audit trail after the merge, the original cost of the invoice line remains on each line. When you create an asset from the merged line, the asset cost is the total merged cost.

Oracle Assets creates journal entries for the asset cost account for the mass addition into which the others were merged. Oracle Assets creates journal entries for each asset clearing account. For example, you merge mass addition #1 into mass addition #2, so Oracle Assets creates the following journal entries:


Construction-In-Process (CIP) Addition

You add a CIP asset. (CIP assets do not depreciate)


Deleted Mass Additions

Oracle Assets creates no journal entries for deleted mass additions and does not clear the asset clearing accounts credited by accounts payable. You clear the accounts by either reversing the invoice in your payables system, or creating manual journal entries in your general ledger.

Capitalization

A capitalization transaction is similar to an addition transaction: you place the asset in service so you can begin depreciating it. When you capitalize an asset in the period you added it, Oracle Assets creates the following journal entries:



When you capitalize an asset in a period after the period you added it, Oracle Assets creates journal entries that transfer the cost from the CIP cost account to the asset cost account. The clearing account has already been cleared.


Asset Type Adjustments

If you change the asset type from capitalized to CIP, Oracle Assets creates journal entries to debit the CIP cost account and credit the asset clearing account. Oracle Assets does not create capitalization or reverse capitalization journal entries for CIP reverse transactions.


See Also

Asset Setup Processes (Additions)

Depreciation Rules (Books)

Construction-In-Process (CIP) Assets

Cost Adjustment by Adding a Mass Addition to an Existing Asset

Adding an Asset Accepting Defaults (QuickAdditions)

Adding an Asset Specifying Details (Detail Additions)

Adding an Asset Automatically from External Sources (Mass Additions)

Placing Construction-In-Process (CIP) Assets in Service

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