(JPN) Using PeopleSoft Asset Management Options to Meet Japanese Requirements

Many of the features for processing assets for Japan are dependent on the business unit information definitions established at the business unit level. You must establish these business unit definitions in order to complete processing for Japanese requirements.

Access the Business Unit Info for Japan page from the AM Business Unit Definition component (Set Up Financials/Supply Chain > Business Unit Related > Assets > Asset Management Definition > AM Business Unit Definition) > Click the JPN Info link.

See Business Unit info for Japan Page.

The following steps are recommended when implementing Japanese tax reform changes:

1. Establish the memorandum amount on the Business Unit Info for Japan page.

2. Verify that the proper and most current depreciation rates, guaranteed rates, and revised rates are represented on the Life and Rate information secondary page [MR_AM_LIFERATE].

3. Select the appropriate depreciation methods at the asset profile level or override them at the asset level.

4. Use the Extended Depreciation Worksheet to select the eligible assets for extended depreciation. As an alternative to the Extended Depreciation Worksheet, you can extend depreciation manually, asset by asset, from the Define Tax/Depr Book page.

5. Run the Transaction Loader process prior to calculating depreciation and closing. However, this step is not necessary if you have manually extended depreciation from the Define Tax/Depr Book page.

PeopleSoft Asset Management supports depreciation methods that are used in Japan for both fixed assets and leased assets.

Depreciation Rate - User Defined – Life and Rate Information Page

PeopleSoft Asset Management supports useful life in years as specified for Japan. This is applied from the Rate-User Defined table (UD_DEPR_RATE_TBL, MR_AM_LIFERATE) in the Depreciation Rate-User Defined component. To apply the appropriate depreciation rates, use the delivered depreciation methods for Japan or add new ones as needed.

Use the Depreciation Rate-User Defined page (UD_DEPR_RATE_TBL) to set up useful life and depreciation rate tables.

Navigation:

Set Up Financials/Supply Chain > Product Related > Asset Management > Depreciation > User-Defined Depreciation Rate

Select a setID and a depreciation method code matching the depreciation method to be used. Enter the effective date, and click the Life and Rate Information button. The Life and Rate Information page displays.

This example illustrates the fields and controls on the Life and Rate Information page. You can find definitions for the fields and controls later on this page.

Enter the useful life and corresponding rates as determined by regulations issued from the Ministry of Finance. The Guarantee Rate and Revised Rate fields are only used in the Tangible/Declining Balance depreciation method.

Note: Useful Life rates also use the Residual Rate Definition.

See Understanding Depreciation Processing

Use the Extended Depreciation Worksheet page (AM_EXTENDED_DEPR) to search for candidate assets according to desired parameters.

Select to extend or not extend the depreciation period, remove from the list and enter the dates to resume depreciation.

Navigation:

Asset Management > Depreciation > Processing > Extended Depr Worksheet > Extended Depreciation Worksheet

The 2007 Japanese Tax Reform affects not only assets that are placed in service after March 31, 2007 but also increases the depreciation basis and expands the depreciation period for those fully depreciated assets that are using the Tangible/Straight Line and Tangible/Declining Balance depreciation methods. As a result, those depreciable assets acquired before April 1, 2007 are allowed, after having depreciated to the final depreciable limit, to depreciate the existing salvage value to the memorandum value of 1 JPY in five years using the Straight Line method.

Use the Extended Depreciation Worksheet to apply the extended depreciation calculation to assets after they have reached the depreciation limit under the Tangible/Straight Line and Tangible/Declining Balance depreciation methods. You can also identify assets that qualify for the extended depreciation using the Extended Depreciation Worksheet.

This example illustrates the fields and controls on the Extended Depreciation page. You can find definitions for the fields and controls later on this page.

Enter the required fields Business Unit, Book Name, and Method to retrieve assets that are candidates for extended depreciation (those assets depreciated using the Tangible/Straight Line and Tangible/Declining Balance methods and are fully depreciated up to 95% of asset cost). You can also search by ChartField by clicking the ChartField Search Criteria link or use a date range to retrieve assets whose original transaction dates fall within the given period.

The Transaction Information section relates to the information needed to perform the extension of the asset useful life. It is applicable to the assets in the Results section. The Transaction Date should match the date that depreciation resumes for extended depreciation. The Life End Date field shows the calculated date in which the depreciation activity stops, including the additional period due to rounding down the remaining depreciation.

PeopleSoft Asset Management supports special depreciation (initial and accelerated) and increased depreciation used in Japan. This table shows the types of special depreciations and their associated accounting methods, depreciation calculations, and additional notes as appropriate:

For the initial special depreciation and accelerated depreciation rate, specify the useful life in years and the depreciation rate on the Depreciation Terms Definition page.

For the increased depreciation rate, enter the specific rate on the Depreciation Details page.

See Processing Depreciation

See Understanding How PeopleSoft Asset Management Calculates Depreciation.

You can also use advanced depreciation for Japan. This table shows the accounting methods that you can use with advanced depreciation:

Composite depreciation, as practiced in Japan, is supported by calculating the useful life in years or by using the 5 percent retirement method.

Use the Run Mass Transactions page to process composite depreciation for Japan.

Navigation:

Asset Management > Asset Transactions > Mass Transactions > Run Mass Transactions

You can add composite depreciable assets and individual assets by using the Asset Basic Information page. When you add composite depreciable assets, you must enter a profile ID, transaction date, and accounting date, and then click the Capitalize button on the Asset Acquisition Details page. When you add individual assets, you must enter the Reporting Lifein periods on the Asset Information page.

After adding composite depreciable assets and individual assets for composite assets, you must capitalize by using the Mass Transaction CC-JPN Capitalize Composite.

Japanese accounting principles require that assets that are offered as collateral be treated according to financial reporting regulations under commercial law. Collateral assets are identified on the Cost/Asset Information page in the Asset ExpressAdd component as one of these types in compliance with Japanese reporting requirements:

• Factory Foundation Mortgage.

• Fixed Mortgage.

• Mortgage.

• Other.

See Adding Assets with the Asset ExpressAdd Component.

Rounding options are applied to depreciation calculations and asset salvage values. You can select rounding options to be used for depreciation calculations on the Business Unit/Book Definition page in the Establish Business Units - Asset Management Definition component, and for salvage value calculations on the Depreciation page in the Asset Profiles component.

Select a rounding rule, which determines the type of rounding that is performed. Select the Currency rounding type.

Select the rounding precision, rounding factor, and truncation. Round precision is the number of places to the right or left of the decimal point to which the amount or number is rounded. Rounding factor is the number to which the amount is rounded.

See Creating PeopleSoft Asset Management Business Units.

See Setting Up Asset Profiles.

Asset Management supports reporting requirements defined by Japanese local tax laws. The system provides these reports, including all required information for the local depreciable asset tax return:

• Depreciable Asset Tax Return (Tax Roll or Depreciable Assets) report (AMLT1000).

• Asset Detail (Increased Assets/All Assets) report (AMLT1100).

• Asset Detail (Decreased Assets) report (AMLT1200).

Use the Owner Information page (Processing Local Tax ReportsOWNER_INFO_DEFN) to enter owner information that is printed on the Depreciable Asset Tax Return (Tax Roll) report.

Navigation:

Set Up Financials/Supply Chain > Product Related > Asset Management > Owner Information Definition

Use the Return Information page (RETURN_INFO_DEFN1) to enter information that is required for the Depreciable Asset Tax Return (Tax Roll) report.

Navigation:

Set Up Financials/Supply Chain > Product Related > Asset Management > Return Information Definition

To set up local tax reporting:

1. Define the localization country as Japan.

   This enables the business unit information link for Japan. The link appears in the Establish Business Units component. Use the User Preferences component, and set the overall preferences localization country to JPN.

   See User Preferences - Overall Preferences Page.

2. Define business unit information for Japan.

   This defines the corporate and tax default books for Japan, as well as enables advanced depreciation, composite asset functionality, and local tax usage. Specify the corporate and tax book that you use for Japan when you establish asset management business units, and select the Use JPN Local Tax check box.

   See Creating PeopleSoft Asset Management Business Units.

3. Define owner information definition for Japanese assets.

   This defines the information needed to process your local tax return.

   See Establishing Asset Ownership.

4. Define local tax information in the Asset Information component.

   See Maintaining Asset Book Information.

5. Define the local tax return processing information.

To run the reports:

• Process the theoretical net book value and assessment value calculation. (Theoretical NBV is not needed since 2009, but still available for historical reporting).

• Process local tax reports.

Defining Local Tax Return Information

Use the Return Information page to define local tax return information.

Navigation:

Set Up Financials/Supply Chain > Product Related > Asset Management > Taxes > AM Return Information Defn JPN > Return Information Defn. - JPN.

This example illustrates the fields and controls on the Return Information Defn. - JPN page. You can find definitions for the fields and controls later on this page.

Select an owner ID. Enter an owner code, capital amount (in millions of yen), recipient name of the taxation office where the return is filed, business category, and the year and month that the company commenced business.

Enter address information for up to three branch offices within the same city, district, or town (place of tax payment).

Note: If a branch office is located at the same address that is defined on the Owner Information page, you can leave these fields blank.

Field or Control	Description
Tax Exception	Select if you have assets to apply to the special treatment of the taxation standard.
Special/Advanced Depreciation	Select if you have assets to be applied to special depreciation under the Special Taxation Measures Law, or to be applied to advanced depreciation under Articles 42 to 50 and Article 142 of the Corporation Tax Law, or from Article 42 to 44 and Article 165, or Article 58 of the Tax on Income Law.
Tax Free Asset	Select if you have assets without taxation.
Life Reduction	Select if you have assets that have been applied a shorter useful life approved by the Director or the District Tax Office under the Corporate Tax Law − Govt. Order 57-1 and Tax on Income − Govt. Order 130-1.
Increase Depreciation Notice	Select if you have assets that have been submitted on a detailed statement for increased depreciation to the tax office under the Corporation Tax Law − Govt. Order 60 and Tax on Income Law − Govt. Order 133.
Blue Returns	Select if you file a blue return under the Corporation Tax Law, Article 122.
Tax Acct Depr (tax account depreciation)	Select a depreciation method in tax accounting.
Building Category	Select the possession classification of the building for the business place.
Reply Person	Enter the name and telephone number of the accounting representative.
Licensed Tax Accountant	Enter the name and telephone number of the licensed tax accountant.
Rental Asset	Select if you have rental assets.
Lessor Name and Telephone	Enter the name and telephone number of the lessor.

Use the Notes region to add any relevant descriptions, such as appendixes or remarks, or to identify any attachments.

Asset Management supports Japanese consumption tax on asset sales by using VAT functionality on the asset Retirement page. In addition to entering VAT information, you can enter customer information for asset sales.

See VAT Page.

See Creating PeopleSoft Asset Management Business Units.