Defining Accounting Entries

Accounting Books

Defining asset books is required for accounting entry processing. Asset books are used to store financial information about assets such as cost history, depreciation rules, and retirement information.

An unlimited number of asset books per business unit can be defined. The number of books that you use depends on your reporting needs. Using multiple books enables you to keep separate cost and depreciation rules for each asset. Typically, organizations use at least two books: corporate and tax, also known as financial and fiscal. Your organization may need additional books if it does business in more than one state or country or uses any of the United States-recognized special tax treatments of accelerated current earnings (ACE) and alternative minimum tax (AMT).

Accounting Entry Templates

The Accounting Entry template is the central table used for creating accounting entries to general ledger journals. Each is defined by an accounting entry template ID. When you add an accounting entry template, PeopleSoft Asset Management populates it with standard accounting entry types, based on the asset category, cost type, and transaction type that you specify. It also identifies each entry as either a debit or credit.

To begin, create accounting entry template IDs and if applicable in your business, mark the cost types for impairment and revaluation. For the SetID, create or select an existing accounting entry template to apply depreciation features and distribution methods. These features control what distribution types need to be set up in the accounting entry template.

PeopleSoft Asset Management enables you to create one or multiple accounting entry templates in a single operation. You may generate accounting entry templates for an asset category for all transaction types. You can generate templates for cost type, transaction code, and retirement disposal code.

Once you have defined the accounting entry template IDs, run the Create Accounting Templates en Masse Application Engine process (AMAEMASS) that generates accounting entry templates for all transaction types and user-defined cost type, transaction code, and disposal code.

Multiple GAAP and Book Codes

PeopleSoft delivers the ability to book accounting transactions according to different and often conflicting accounting principles for one Business Unit in one ledger and to maintain these entries in compliance with the rules of government and regulatory organizations. You can add book codes for PeopleSoft Asset Management to facilitate accounting entry processing.

Generally accepted accounting principles (GAAP) as determined in one country or jurisdiction often vary from country to country or by self-governing accounting bodies and jurisdictions. Consequently, organizations record and report their operations according to local accounting requirements as well as by rules applicable to parent corporations that are often under the rules of another national jurisdiction. PeopleSoft has provided the ability to maintain separate ledgers and ledger groups for different accounting principles, record transactions under varying statutory rules using Alternate Account and using MultiBook in PeopleSoft General Ledger and its subsystems for its automatic synchronization capabilities. A sometimes much favored method, especially within financial organizations, is defining book codes. This method enables you to simultaneously generate in one business unit and ledger all the relevant accounting entries for a transaction that addresses different local and corporate accounting rules.

You can use book codes to simultaneously generate sets of entries to record related transactions according to multiple GAAP for the same business unit in the same ledger. For example, where local and corporate accounting principles are not compatible, you define a local (L) and a corporate (C) book code. For those situations where requirements are alike, you define a code for both (B). You can attach these book codes to accounts as attributes. This results in separate permutations of accounts and book codes in which you simultaneously record related transactions under local, corporate, or both rules. You can choose to associate a single book code with one account value. Using this method, a unique account value must be created for each book code.

See Understanding Multiple GAAPs and Prior Period Adjustments.

Accounting Entry Types

Accounting entry types are set by the system. Each asset event has an associated set of accounting entry types.

For each possible combination of category, cost type, and transaction code, you must set up an accounting entry template for each of the following transaction types:

• ACR: Accretion Expense.

• ADD: Additions.

• ADJ: Adjustments.

• TRF: Transfers.

• RCT: Recategorizations.

• DPR: Depreciation expenses.

• PDP: Prior period depreciation.

  Note: The DPR and PDP transaction types are used only on an accounting entry template with a blank transaction code.

• PLP: Prior Lease Payment.

• RET: Retirements (also used for processing reinstatements).

• LPY: Lease payments.

• INF: Inflation adjustment.

• LEX: Lease Expense.

Book Code

Specify a book code for each account value.

The Allow Book Code Override option that is set on the Account (ACCOUNT) page determines whether this book code can be overridden on the transaction line. The Effective Date and Status fields on the Account page must match the settings for the account values to which the book code is attached. Assets take the most recent and active date to populate its templates. To avoid any situation where Book Code might generate unbalanced entries in General Ledger, a warning message is generated when the template is saved when there are paired distribution types with different Book Codes. Paired distribution types are those distribution types that play against other in order to balance the entry.

Distribution Options

The page displays a distribution type list and corresponding account and alternate account specific to the template ID or category selected. The list is refreshed when these values change.

If Book Code functionality is set up at Accounting Entry Template ID level, the book code related to the account displays. The Allow Book Code Override option set on the Account page determines whether the book code can be overridden for each distribution type. This process populates the book codes using the criteria defined for the Accounting Entry Template.

If the book code column does not display, it is not selected at Accounting Entry Template ID level. The template uses the book code based on the accounts effective date set in the Account definition page.

SetID Options

The page includes expandable subpages of options determined by SetID.

Using a From Book Once

When a From Book is used once only, an add action generates a retirement for the From Book and an add to the To Book. A transfer action generates a transfer out for the From Book and a transfer in for the To Book.

The asset that is retired receives an asset status of Disposed.

Assets that are transferred between books by using the transfer action receive a status of Transferred:

Using a From Book for Two or More Transfers

When a From Book is used for two or more transfer book actions, only one transfer out transaction is generated. Because this takes care of the cost on the From Book, no additional transfer outs are generated for that book.

Assets that are transferred between books by using the transfer book action receive a status of Transferred:

Using a From Book for Both Transfer and Add

When a From Book is used for both a transfer and an add action, a transfer out is generated for the Transfer Book. Because this takes care of the cost on the From Book, the add action does not generate a retirement for that book.

Assets that are transferred between books by using the transfer book action receive a status of Transferred:

Using a From Book for Two or More Adds

When a From Book is used for two or more add actions, a retirement is generated for the first add action. Because this takes care of the cost on the From Book, no further retirements are generated for it.

The asset that was retired receives a status of Disposed:

See Understanding Adjusting, Transferring, Reversing, and Evaluating Assets.

Retiring a Book

Assets that are retired receive a status of Disposed:

See Understanding Asset Retirement.