Understanding Asset Management Business and Cash Generating Units

You determine how to define business units in PeopleSoft Asset Management to best facilitate asset management processing within your organization. You can set up an asset management business unit for each legal entity in your organization. You could, for example, have asset management activities processed by a central asset management department which will interface with and manage assets for each business unit. Alternatively, you could set up one business unit for each plant or branch office of your company, enabling these entities to manage their own assets independently while sending journals to a common general ledger business unit. You should establish your business units in the manner that best suits your organizational, structural, and reporting needs.

Note: You must complete the tasks related to Business Unit and Cash Generating Unit setup in order to implement PeopleSoft Asset Management.

TableSet Sharing and PeopleSoft Trees

When you plan your business unit structure, you need to be familiar with TableSets, which are used in all PeopleSoft Financials products. The accounting structure and processing rules for each PeopleSoft application are defined in a series of control tables. A TableSet is a group of rows across control tables upon which you define the accounting structure for each of your business units, such as asset management book definitions, asset profiles, depreciation tables, tax classes, and so forth. For a business unit to process transactions, it must have an associated TableSet Control.

A setID identifies each TableSet. You can have as many setIDs as you want. However, using numerous setIDs creates complex TableSet sharing. You must create at least one setID, even if you do not use TableSet sharing.

PeopleSoft provides a tool called Tree Manager to group business units together into a hierarchical structure. Tree Manager and your business unit structure provide a mechanism for defining reporting parameters.

PeopleSoft Financials uses setID-driven trees. So that Asset Management trees will work properly, the setID assigned to the record group for Tree Node and Tree Level Tables (FS_21) for each business unit must equal the business unit value. If the setID for FS_21 does not equal the business unit value, you cannot easily access your assets from the correct asset tree.

When you use the Real Estate application, you will define a default tree for the business unit. The tree names available will depend on the trees you have defined. Plan your tree definitions with business unit definitions in mind.

Note: Each time you create a business unit, whether you copy the TableSet Control from another business unit or create a generic TableSet sharing setup, the system automatically establishes the setID for the Projects record group (FS_08) to equal the business unit that you are creating. You should not change this definition.

See "Planning Records, Control Tables, and TableSets" topic in the PeopleTools: PeopleSoft Application Designer Developer's Guide

See "Sharing Trees Across SetIDs" topic in the PeopleTools: PeopleSoft Tree Manager

Asset Management Business Unit Default Hierarchies and Options

A business unit is the highest level in the hierarchy and you must set default values for business units. All other entities fall beneath them in the hierarchy. Some of the attributes set at the business unit level may be set at lower levels in the hierarchy, such as the customer or item level, but are not required.

Default hierarchies exist throughout the system. Any time that a default hierarchy exists, you can:

  • Leave information blank at lower levels, because defaults are inherited from the next higher level.

  • Override information set at higher levels by entering different information at the lower levels.

Some business processes in Asset Management are based on your business unit definitions. These processes may require that you define field entries to be used by default or other options for transactions that are processed at the business unit level. These options include:

  • Asset Management processing options.

    Besides asset management processing defaults, you should consider your requirements for value-added tax (VAT) processing, processing group assets and ChartField summarization, depreciation period end and closing processes, and asset book and accounting entry defaults.

  • (JPN) Asset Management numerical rounding options.

    Define the rounding type for depreciation amounts.

  • Payables interface processing options.

    Select voucher close transaction types and lease payment options.

  • Purchasing interface processing options.

    Select the map ChartField option to assign the ChartFields that come to assets from a different ChartField value by using the criteria established on the ChartField Mapping Template page.

  • Billing interface options.

    Designate the defaulting business unit to run the Billing interface and define values for Billing business units, bill types, bill sources, and bill by identifiers.

  • Lease Administration (space allocation) interface options.

    Designate the defaulting tree name, statistics code and statistical accounts to be used when interfacing with Lease Administration.

  • Maintenance Management interface options.

    Designate the default options enabling retirements and transfer in or out of assets from work orders. Designate the default options for including or excluding subcomponents for transactions coming from MM.

If you are using PeopleSoft General Ledger, you must also define at least one general ledger business unit to which you will generate journal entries from the asset management business unit. If PeopleSoft General Ledger is already implemented, this step may have already been performed.

You can override most business unit defaults at a lower level when you enter asset information. Asset Management is delivered with a series of standard definition tables. Examine these tables to determine if the business unit that you are setting up can share the same financial structure. If so, you can minimize the need to set up additional tables.

VAT Processing

Value-added tax (VAT) defaults are controlled by VAT drivers at various levels of the hierarchy and the VAT defaults themselves are stored in a common set of defaulting tables. Depending on the driver, certain fields are available for setting and, lower in the hierarchy, overriding. There are two main components that control the VAT defaulting: the VAT Defaults Setup component and the Services VAT Treatment Setup component. Asset Management only handles goods for VAT setup. You can access these components from the common VAT menu (Set Up Financials/Supply Chain > Common Definition > VAT and Intrastat > Value Added Tax) or from the applicable application pages. If you access these components from the VAT menu, the driver you select determines the fields that display. If you access either of these components from the application pages, the component you are accessing from determines the fields displayed. The VAT Defaults Setup and Services VAT Treatment Drivers Setup components and functionality are described in depth in the common VAT topic in the PeopleSoft Global Options and Reports product documentation.

The values selected here become the default values for the business unit and can be overridden in the Asset Retirements component. If you leave these fields blank, you must enter this information in the Asset Retirements component each time VAT applies to the transaction.

Use the VAT Default page to specify VAT processing options. For countries that use VAT, PeopleSoft Asset Management stores default information at the business unit, customer, customer location, and asset class levels to calculate VAT on asset retirements. VAT transaction types and VAT codes are set up in Set Up Financials/Supply Chain > Common Definitions > VAT and Intrastat > Value Added Tax. You can select values for these and other control fields on this page.

See Understanding VAT.

Cash Generating Units

Cash generating units (CGUs) become important when you must perform impairment assessment and processing for an individual asset and the recoverable amount of that asset is in doubt. If an organization cannot determine recoverable value for an individual asset, it is required in some countries to identify the lowest aggregation of assets that generate largely independent cash flows. These aggregations of assets are known as cash generating units. A CGU is the smallest identifiable group of assets that generate cash inflows from continuing use and are largely independent of the cash inflows from other assets or groups of assets and should be defined consistently from period to period.

PeopleSoft supports the implementation of International Accounting Standards (IAS) 36 by providing for the definition of a Cash Generating Unit and enabling the association of CGUs with business units. This facilitates impairment processing within a defined business unit. You must define the business unit before it can be associated to a CGU definition.

See Adjusting for Asset Impairment.