This chapter covers the following topics:
The Asset Return to Disposal process covers record keeping of returned assets, handling amortization and writedowns, evaluating the condition of an asset, determining what you want to do with the asset, and deploying your end-of-term strategies.
Asset Disposal refers to what you do with an off-lease asset after you have returned and evaluated it. Choices for asset disposal include scrapping the returned asset, remarketing the returned asset, re-leasing the returned asset, and repurchasing the returned asset.
The main topics of Asset Disposal are:
Remarketing - Standard Process
Custom Remarketing Process
Re-Lease the Off-Lease Asset
Repurchase the Off-Lease Asset
Scrap the Off-Lease Asset
The Standard or Custom remarketing process is applicable to the entire operating unit. You can modify the remarketing process for each operating unit.
When you choose to remarket an off-lease asset, the following processes:
Create a new item in inventory using the item description from the asset return request.
Update the price on the Price List from the price on the asset return request.
Let you enable the item for re-sale through iStore.
Continue depreciation, as applicable.
This section covers how can use Oracle Lease and Finance Management to process returned off-least assets for resale. Other remarketing actions take place in other Oracle modules, such as Oracle iStore and Order Management. When you sell an asset through Oracle iStore, the Order Management module captures the details of the asset sale and creates the sale. In Oracle Lease and Finance Management, you can view details of the remarketing effort and the billing for the buyer of your asset. For more information on iStore and Order Management, refer to the document for those modules.
In Oracle Lease and Finance Management, you can monitor an asset's remarketing status and bill the buyer of the asset.
Topics in this section include:
Specify Availability for Sale
Search for Remarket Orders
View Asset Sale Information
View the Billing for a Sold Off-Lease Asset
The Custom remarketing process flow provides an alternative for creating sales orders for off-lease equipment through Oracle Order Management, instead of, or in addition to, through Oracle iStore. The Custom remarketing process helps you to create inventory items without having the Available-to-Promise (ATP) attribute selected, and allows you to define your own inventory item numbers. With the Custom remarketing flow, you are not required to configure Oracle iStore to remarket assets, and you can modify the custom remarketing workflow to implement enhanced processes.
When you select Custom, a workflow is started to:
Validate the prerequisite setups.
Create the item in Oracle Inventory. The item attributes default from the item template you set up. If you do not specify a template, the default item attributes are applied.
Update the quantity in Oracle Inventory.
Update the price for the item in Oracle Advanced Pricing.
Finally, the remarketer can set up the Order Management, Order Line workflow to modify any of the steps in the workflow. For example, you can change the item attributes on the item created in Oracle Inventory. The remarketer is not required to configure Oracle iStore.
The remarketer enters the sale in Oracle Order Management, which launches an Oracle Order Management workflow that:
Issues the quantity purchased in Oracle Inventory.
Generates the bill of sale in Oracle Lease and Finance Management.
Closes the sales order in Oracle Order Management.
Retires the assets in Oracle Assets, and
Updates the asset return status in Oracle Lease and Finance Management.
You can modify, add to, or remove most of these processes, except::
You cannot manually update the asset status to Available for Sale in Oracle Lease and Finance Management.
If the entire quantity has been sold, you cannot retire assets in Oracle Assets or update the asset return status in Oracle Lease and Finance Management.
You can modify the item number to be created in Oracle Inventory, update the processes when the asset is made available for sale, and update the processes in the Order Management workflow, after the sale of the asset. Updates must include the retirement of the assets in Oracle Assets, and updating the asset return status in Oracle Lease and Finance Management.
You can specify whether the item to be applied on the remarketing invoice that is created through Oracle Lease and Finance Management, is a Contract item or a Remarketing item.
You can set up inventory items to remarket in Lease and Finance Management. Before you can create an inventory item for remarketing, however, you must first create a price list in Oracle Pricing, and then set up the following remarketing options for each operating unit: 1. On the Update Operational Options page, select the Inventory Organization, Subinventory, Price List, Remarketing Process, Item Template, and Item Invoiced. 2. Select Remarketing Process, Custom, to use the enhanced flow.
To create an inventory item to remarket, use the Asset Return page to view all assets to be returned, or refine your search using a search parameter. Select the asset and click the Return icon to change the Asset Return status to Available for Sale in the Asset Return Details page.
The Available for Sale status initiates the Custom remarketing process. The Inventory Item Number field is blank so you can create a unique inventory item. Enter the inventory item number, price, and details as desired, and click Update.
To specify that an off-lease asset is available for sale, you update the asset's Return Status field to Available for Sale.
You have updated the item description.
You have updated the item price.
You have updated the Like Kind Exchange, if applicable.
Update Asset Return Status.
When you make an asset available for sale:
The Asset Status changes to Available for Sale.
A validation process verifies that the contract has expired or terminated.
If validation passes, then this creates an item in inventory using the description and price you entered.
When you sell an item through iStore:
The Asset Status changes to Remarketed.
A validation process verifies that the previous Asset Status was Available for Sale, and there are order lines for the entire quantity of assets.
If validation passes, then you cannot update the Asset Status to any other choice.
Select a topic:
Search for Remarket Orders
View Asset Sale Information
View the Billing for a Sold Off-Lease Asset
You can locate and view remarket orders of off-lease assets that you are offering for resale.
Note: The system creates the sales order after a sale occurs in the iStore module
The Order Management module includes the sales order for your asset.
Perform the following steps using the Remarket Orders page:
Enter one or more search criteria to locate and place the remarket order into context:
Asset Number: Asset number for asset sold; lets you navigate to Asset Details page.
Item Number: Sale information for the asset.
Order Number: Sale information for the asset.
Customer: The person or company that purchased the asset.
Remarketer: The name of the person or business who is the remarketer.
Click Go.
In the Results area, matches appear and show you, Order Number, Order Date, Asset Number, Item Number, Customer, Remarketer, and Price.
Under the Order Number column, click the order number of the asset to view more information.
When the vendor repurchases an off-lease asset, the process automatically triggers a sale to the vendor based on the terms and conditions defined on the vendor program contract.
The repurchasing of off-lease asset topics are:
Specify Availability for Repurchasing: to indicate that the asset is available for repurchasing.
Update Asset Return Status: to specify that the asset is available for repurchasing.
Repurchase Asset: to record the repurchasing of the off-lease asset.
To specify that an off-lease asset is available for repurchase, you update the asset's Return Status field to Repurchased. See Update Asset Return Status.
When you specify that an asset available for repurchasing:
The Asset Status changes to Repurchase.
A validation process verifies that the vendor has accepted the repurchase quote.
If validation passes, you cannot change the Asset Status to any other choice.
The following table shows valid combinations of quote line types and contract situations for repurchase quotes.
| Line Type | Applicability Based on Terms and Conditions | Ability to Specify Formula on Contract | Updatable After Creation of Quote | Define Stream for Billing and Accounting | Available for Manual Termination Quotes |
|---|---|---|---|---|---|
| Discount Rate | Yes | Yes | Yes | Yes | Yes |
| Quote Fee | Yes | Yes | Yes | Yes | No |
| Tax / VAT | Always applicable | Yes (at site level) | No | No | Yes |
| Miscellaneous | Yes | Yes | Yes | Yes | Yes |
| Sale Price | Yes | Yes | Yes | Yes | Not Applicable |
Use this procedure to record the sale of an asset to the vendor. In order to undertake a repurchase, you must have a repurchase agreement. You create the repurchase agreement when you author the contract. The repurchase agreement can be part of a vendor program agreement.
You have created the asset return and placed the asset into context.
A repurchase agreement exists with a third party.
The contract's terms and conditions includes a formula that defines the terms for repurchasing an asset.
On the Asset Returns page, locate the asset by specifying one or more search criteria:
Asset Number
Asset Description
Remarketer
Click the Go button.
In the Results area, matches appear.
Under the Asset Number hypertext link, click the asset number that you want to use for repurchasing.
The Asset's detail page appears. This puts the asset into context.
On the navigation menu, click Repurchase Asset.
The Repurchase Asset page opens.
Click the Create Quote button.
The Repurchase Asset page shows more information, including the quote, calculated amounts, and the legal entity specified in the contract.
Edit one or more of these fields:
Effective To: date field
Accepted (check box): third party accepted the quote.
Comments: free-form text
Click the Update button to apply any changes.
Click the Send Quote button to send the quote to the third party.
Use the procedures in this section to view details of the asset that you sold through the iStore product. The Order Management module captures the details of the asset sale. In order to view the sold asset's details, you must put the asset into context by searching for it.
Someone bought the asset through iStore.
Perform the following steps:
In the Remarket Orders page, enter one or more search criteria to locate and place the remarket order into context:
Asset Number: Asset number for asset sold; lets you navigate to Asset Details page.
Item Number: Sale information for the asset.
Order Number: Sale information for the asset.
Customer: The person or company that purchased the asset.
Remarketer: The name of the person or business who is the remarketer responsible for the disposal of the asset.
Click the Go button.
In the Results area, matching assets appear.
In the Results area under the Order Number column, click the order's hypertext link.
The Asset Sale Details page opens. The Asset Sale Details page shows you the completed order information:
Asset Number: Asset number for asset sold.
Description: Brief asset description
Currency
Order Number: Sale information for the asset.
Order Date: The date of the sales order.
Price: Price of the item.
Cost: Lessor's cost of the asset.
Item Number: Sale information for the asset.
Description: Item description.
Customer: The person or business that bought the asset.
Ship To: The address to which you shipped the asset.
Ship Date: The date the shipping occurred.
You can view the billing to the buyer of your sold off-lease asset.
You sold the asset.
Perform the following steps:
In the Remarket Orders page, enter one or more search criteria to locate and place the remarket order into context:
Asset Number: Asset number for asset sold; lets you navigate to Asset Details page.
Item Number: Sale information for the asset.
Order Number: Sale information for the asset.
Customer: The person or company that purchased the asset.
Remarketer: The name of the person or business who is the remarketer.
Click the Go button.
In the Results area, matching assets appear.
In the Results area under the Order Number column, click the order's hypertext link.
The Asset Sale Details page opens.
Click Billing.
The Asset Sale Details page shows you the billing information, such as Asset Number, Item Number, Description, Currency, Bill To, Bill Date, Invoice Number, Invoice Date, and Invoice Amount.
When you choose to re-lease an off-lease asset, the asset becomes available for selection in the Re-leasing process in the Origination part of Oracle Lease and Finance Management.
To specify that an off-lease asset is available for re-leasing, you update the asset's Return Status field to Re-lease. See Update Asset Return Status.
When you specify that an asset is available for re-lease:
The Asset Status changes to Re-lease.
A validation process verifies that the contract has expired or terminated.
If validation passes, then the item is available for re-leasing.
When you choose to scrap an off-lease asset, the following processes happen:
The asset is retired from Oracle Assets at a value of zero.
Calculation is triggered for a gain or loss on disposal of the asset.
To scrap an off-lease asset, update the asset's Return Status field to Scrapped. See Update Asset Return Status.
When you specify that an asset is available for scrapping:
The Asset Status changes to Scrapped.
A validation process verifies that the contract has expired or terminated.
If validation passes, then you cannot change the Asset Status to any other choice.
When an Asset Manager sells, disposes, or scraps an asset, the Install Base record is retained so that other Oracle applications, such as Service Contract and Oracle Service can service the asset.