Asset Acquisitions (Chapter 2) 20D

Add Assets

Considerations for Adding Assets

To add acquired assets to Oracle Fusion Assets, record the assets using one of the following methods:

Manual additions
Mass additions

Manual Additions

Manually add a single asset by entering all required information and any optional information directly into Assets using:

The Add Assets page (generally used to enter a single asset)
A spreadsheet (generally used to enter multiple assets)

Mass Additions

Add multiple assets automatically from an external source. Create assets from:

One or more invoice distribution lines in Oracle Fusion Payables
Construction-in-process (CIP) asset lines in Oracle Fusion Projects
Asset information from another assets system
Information from any other feeder system using the interface

You must prepare the mass additions to become assets before you post them to Assets.

Review Journal Entries for Addition Transactions

This example illustrates how a company can record a journal entry that can be used for asset additions.

Scenario

Acme Company is growing fast and needs a more powerful server to handle its applications. It's estimated that this new server will satisfy the company demands for the following four years. However, this server has very strict requirements in terms of temperature and humidity to work properly. As a result, Acme decided to build a new room to meet those conditions. Acme Company purchases the new server computer and assigns it to the Information Technology department. The server will eventually be physically located in the new room that the company is building. It's currently in the old server room where those conditions are barely met.

Current Period Addition Transaction Details

The new server computer was purchased and placed in service in year 1, quarter 1. The asset is added into Oracle Fusion Assets in the period it was acquired. The recoverable cost is 4,000 and the depreciation method is straight-line. The asset life is four years.

Analysis

The asset cost increases by 4,000. Debit 4,000 to the Asset Cost account and credit 4,000 to the Asset Clearing account. The contra account is the clearing account that balances with the payables clearing account. The calculated depreciation for the period is 250. Debit the depreciation expense account and credit the Accumulated Depreciation (reserve) account for that amount.

The calculated depreciation for the period is 250. The depreciation expense account is debited and the Accumulated Depreciation (reserve) account is credited for that amount.

Journal Entries for Additions

The following journal entry is created from your payables application:

Account	Debit	Credit
Asset Clearing	4,000 USD	None
Accounts Payable Liability	None	4,000 USD

The following journal entry is created from Assets:

Account	Debit	Credit
Asset Cost	4,000 USD	None
Depreciation Expense	250 USD	None
Asset Clearing	None	4,000 USD
Accumulated Depreciation	None	250 USD

In an alternate scenario, the new server computer was purchased and placed in service in year 1, quarter 1. However, the asset is entered into Assets in year 2, quarter 2.

The following journal entry is created from your payables application:

Account	Debit	Credit
Asset Clearing	4,000 USD	None
Accounts Payable Liability	None	4,000 USD

The following journal entry is created from Assets:

Account	Debit	Credit
Asset Cost	4,000 USD	None
Depreciation Expense	250 USD	None
Depreciation Expense (Adjustment)	1,250 USD	None
Asset Clearing	None	4,000 USD
Accumulated Depreciation	None	1,500 USD

Assets Watchlist

Use watchlists to monitor critical transaction processing progress in real time.

You can view the watchlists by clicking the Watchlist icon on the home page.

Oracle Fusion Assets provides four watchlist categories. Two of the categories contain predefined items. You can also create additional items using the saved search for any of the four categories.

The following watchlist categories are available:

Additions
Retirements
Financial Transactions
Tracking

Additions Watchlist

The Additions category contains the following predefined watchlist items. You can create additional watchlist items for this category.

Exceptions: Source lines in the Error queue. Selecting this watchlist item takes you to the list of exceptions in the Additions infotile. You can view the details and error for each line and make the necessary corrections before posting the transactions.
Incomplete: Source lines that aren't yet assigned to any preparer. Selecting this watchlist item takes you to the list of incomplete transactions in the Additions infotile. You can view the details for each line and add the missing information before posting the transactions.
Ready to post: Source lines in the Post queue. Selecting this watchlist item takes you to the list of transactions that are ready to post in the Additions infotile. You can click Post All to post all of the transactions that are ready to post.

Retirements Watchlist

The Retirements Watchlist category contains the following predefined watchlist item. You can create additional watchlist items for this category.

Incomplete: Retirements that are saved and that aren't yet posted to the asset. Selecting this watchlist item takes you to the list of incomplete transactions in the Retirements infotile. You can view the details for each line and add the missing information before posting the transactions.

Financial Transactions Watchlist

This category contains no predefined watchlist items, but you can create watchlist items for this category.

Tracking Watchlist

This category contains no predefined watchlist items, but you can create watchlist items for this category.

Related Topics

Add Multiple Assets

Mass Additions

You can create mass additions from Oracle Fusion Payables, other payables systems, Oracle Fusion Project Costing, or other asset systems.

Create Assets from Payables

To create mass additions from Payables:

Run the Create Mass Additions process in Payables to create mass additions from invoice information in Payables.

The Create Mass Additions process places the new mass additions in the FA_MASS_ADDITIONS table, which is separate from the main Assets tables.
Review and prepare the mass additions using the Assets user interface or a spreadsheet before the assets become asset additions.

Create Asset Additions from Another Payables System

You can easily integrate Oracle Fusion Assets with your other payables systems by doing the following:

Develop your own program to add mass additions to the FA_MASS_ADDITIONS table.
Use either the Assets user interface or a spreadsheet to review and prepare the mass addition lines before they become assets.

Create Assets from Project Costing

To create assets from Project Costing:

Collect CIP costs for capital assets you're building in Project Costing.
When you finish building a CIP asset, capitalize the associated costs as asset lines in Project Costing.
Run the Transfer Assets to Oracle Fusion Assets process to send valid capital asset lines from Project Costing to the Mass Additions interface table in Assets.
Review these mass addition lines in Assets and determine whether to create assets from them.

Convert Assets from Other Asset Systems

To convert assets from a legacy asset system:

Use the Mass Additions interface to automate the asset additions from the information in the other feeder systems.
Use the Mass Additions process to convert your assets from a legacy system.

Note: Plan your conversion carefully and thoroughly, because you can't undo it.

How Fixed Asset Mass Additions Import Data Is Processed

Use the Fixed Asset Mass Additions Import process to upload multiple assets into Oracle Fusion Assets. You can download a mass additions spreadsheet template to use to prepare your asset data. The template contains an instruction sheet to help guide you through the process of entering your asset information.

You can use the import process to create assets from information outside of Assets, including:

External sources, such as legacy systems.
Oracle Fusion Project Costing.
Oracle Fusion Payables.
Application Developer Framework (ADF) desktop integration spreadsheet.

The following figure contains the flow of importing assets into Assets and posting them.

This flowchart illustrates the process of importing
assets and posting them to Assets.

To access the template, complete the following steps:

Navigate to the File-Based Data Import for Oracle Financials Cloud guide.
In the Table of Contents, click File-Based Data Imports.
Click Fixed Asset Mass Additions Import.
In the File Links section, click the link to the Excel template.

Follow these guidelines when preparing your data in the worksheet:

Enter the required information for each column. Refer to the tool tips on each column header for detailed instructions.
Don't change the order of the columns in the template.
You can hide or skip the columns you don't use, but don't delete them.

Settings That Affect the Post Mass Additions Process

The Mass Additions import template contains an instructions tab, plus three tabs that represent the tables where the data is loaded:

Spreadsheet Tab	Description
Instructions and CSV Generation	Contains instruction information about preparing and loading data, the format of the template, submitting the Post Mass Additions process, and correcting import errors.
FA_MASS_ADDITIONS	Enter information about the assets that you're adding, such as the cost, number of units, and the asset book the asset will be added to.
FA_MASSADD_DISTRIBUTIONS	Enter information about the asset distributions, such as unit, location, and employee assignments.
FA_MC_MASS_RATES	Enter information about the reporting currency. Leave this tab blank if you don't use a reporting currency.

After you add the data to the FA_MASS_ADDITIONS table, you can perform additional preparations on the mass additions. For example:

Add source, descriptive, and depreciation information.
Assign mass additions to one or more distributions, or change existing distributions on the Assignments section of the Edit Source Lines page.
Adjust the cost of a mass addition.
Merge a mass addition into another mass addition.
Split a multiple-unit mass addition into several single-unit mass additions.
Add mass addition lines to existing assets, which creates a cost adjustment.

How Mass Additions Import Data Is Processed

After you successfully load your data, you must submit the Post Mass Additions process to import the data into the application tables and create the assets.

To submit the Post Mass Additions process:

On the Assets page, click the Ready to Post link on the Additions infotile.
Click Post All.
If the Post Mass Additions process ends in error or warning, review the log file for details about the rows that caused the failure.

To submit the Post Mass Additions process you must select the appropriate corporate book. If your corporate book isn't listed in the list of values, then one of the following errors may have occurred:

Error	Solution
No mass additions lines in a status of Post.	Change the status to Post for the mass additions that are ready to be posted.
The corporate book isn't effective for these mass additions lines.	Check the effective date range of the corporate book on the Edit Book page.
The Calculate Depreciation process ran with errors.	Fix the errors and resubmit the Calculate Depreciation process. When the Calculate Depreciation process runs successfully, resubmit the Post Mass Additions process.
The Calculate Depreciation process is currently running for the corporate book.	Wait until the Calculate Depreciation process completes successfully, and then resubmit the Post Mass Additions process.

When you run the Post Mass Additions process, mass additions lines are processed according to the mass addition status they're assigned to.

Status Before Posting	Effect of Post Mass Additions Process	Status after Posting
Post	Creates a new asset from the mass addition line.	Posted
Cost Adjustment	Adds the mass addition line to an existing asset.	Posted
Merged	Mass addition line was already merged.	Posted
Split	Mass addition line was already split; posting doesn't affect the mass addition.	Split
New	New mass addition line; posting doesn't affect the mass addition.	New
On Hold	Mass addition line is on hold; posting doesn't affect the mass addition.	On Hold
Delete	Mass addition line awaiting deletion; posting doesn't affect the mass addition.	Delete

To correct import errors:

Click the Exceptions link on the Additions infotile.
In the Search region, select the book and select the Error in the Queue field.
Click Search.
Click Prepare All to export all rows to a spreadsheet.
Review and correct the errors in the spreadsheet and set the queue to Post for the corrected rows.
Once you correct all the rows with errors, click Submit and Post Mass Additions to resubmit the process.
Repeat the submission and error correction steps in this section until all rows are imported successfully and the assets are created.

Related Topics

File-Based Data Import for Oracle Financials Cloud

How Mass Additions Queues Are Set

Mass additions queues indicate the status of mass additions throughout the asset additions process.

Settings That Affect Asset Status

Queues are set by Oracle Fusion Assets or you according to the current status of an asset addition.

How Mass Additions Queues Are Set

Use the predefined queues or define your own mass additions queues.

Each mass addition belongs to a queue that describes its status.
The queue name changes according to the transactions that you perform on the mass addition.

The following table describes each Assets mass addition queue name and how it's set:

Queue Name	Definition	Set by
New	New mass addition line created but not yet reviewed.	Set by Assets after a line is brought over from an external source.
On Hold or user-defined hold queue	Mass addition line updated or put on hold by you.	Set by you. Also set by Assets when merging another line into this line or when a new single unit line is created when splitting a mass addition.
Split	Mass addition line already split into multiple lines.	Set by Assets when splitting a multiple-unit mass addition line.
Merged	Mass addition line already merged into another line.	Set by Assets when merging a line into another line.
Cost Adjustment	Mass addition line to be added to an existing asset; ready for posting.	Set by Assets after completion of an Add to Asset transaction.
Post	Mass addition line ready to become an asset.	Set by you.
Posted	Mass addition line already posted.	Set by the Post Mass Additions process.
Delete	Mass addition line to be deleted.	Set by you.

Split Mass Additions

This example uses a single invoice line to illustrate how to split it into multiple mass addition lines. You're asked to split a single mass addition line for invoice #2000 into three new mass addition lines.

Scenario

Transaction Details

Before the split, the mass addition line has a queue name of New.

Details for the line are as follows:

Transaction Detail	Value
Invoice	#2000
Line	1
Cost	$3000
Units	3
Queue	New
Description	Personal Computer

Analysis

After the split, you have four mass addition lines. The original line now has a queue name of Split and can't be made into an asset. The three new lines have a queue name of On Hold and can become assets.

The original line remains as an audit trail after the split. The resulting split mass additions appear with one unit each and with the same existing information from the source system.

Transaction Detail Results

Details for the original mass addition line after the split are as follows:

Transaction Detail	Value
Invoice	#2000
Line	1
Cost	$3000
Units	3
Queue	Split
Description	Personal Computer

Details for each of the three resulting new lines are as follows:

Transaction Detail	Value
Invoice	#2000
Line	1
Cost	$1000
Units	1
Queue	On Hold
Description	Personal Computer

Merge Mass Additions

In this example, you merge separate mass addition lines into a single mass addition line with a single cost.

Scenario

Transaction Details

Prior to the merge, the mass addition lines have a queue name of New. These are details for the two lines:

Line 1:

Line	Invoice	Amount	Units	Queue	Description
1	100	5,000 USD	2	New	Personal Computer

Line 1 contains these assignments:

Units	Expense Account	Location
2	01-110-7360-0000-000	USA-SAN FRANCISCO

Line 2:

Line	Invoice	Amount	Units	Queue	Description
2	220	67 USD	1	New	Tax on PC

Line 2 contains these assignments:

Units	Expense Account	Location
1	01-120-7360-0000-000	USA-SAN FRANCISCO

Analysis

You can choose whether to sum the units:

Sum Units Check Box	Description
Checked	Oracle Fusion Assets uses both the merged parent and child distributions for the new asset created from the merged mass addition line.
Unchecked	Assets uses the distribution of the merged parent for the new asset created from the merged mass addition line.

After the merge:

The invoice 100 line is in the On Hold queue and is ready to become as asset.
The invoice 220 line is in the Merged queue and can't become an asset.

The original cost of the invoice line distribution remains on the line as an audit trail after the merge. The cost of the parent line isn't altered and remains the same. When you post the merged line, the asset cost is the total merged cost.

Transaction Results

Here are the details for the two lines after the merge when Sum Units is checked:

Line 1:

Line	Invoice	Amount	Units	Queue	Description	Merged Cost	Merged Units
1	100	5,000 USD	2	On Hold	Personal Computer	5,067 USD	3

Line 1 contains these distributions:

Units	Expense Account	Location
2	01-110-7360-0000-000	USA-SAN FRANCISCO

Line 2:

Line	Invoice	Amount	Units	Queue	Description
2	220	67 USD	1	Merged	Tax on PC

Line 2 contains these distributions:

Units	Expense Account	Location
1	01-120-7360-0000-000	USA-SAN FRANCISCO

Here are the details for the two lines after the merge when Sum Units isn't checked:

Line 1:

Line	Invoice	Amount	Units	Queue	Description	Merged Cost	Merged Units
1	100	5,000 USD	2	On Hold	Personal Computer	5,067 USD	2

Line 1 contains these distributions:

Units	Expense Account	Location
2	01-110-7360-0000-000	USA-SAN FRANCISCO

Line 2:

Line	Invoice	Amount	Units	Queue	Description
2	220	67 USD	1	Merged	Tax on PC

Line 2 contains these distributions:

Units	Expense Account	Location
1	01-120-7360-0000-000	USA-SAN FRANCISCO

The asset is created from invoice 100 with this information when Sum Units is checked.

Description	Cost	Units
Personal Computer	5067 USD	3

The asset contains these distributions:

Units	Expense Account	Location
2	01-110-7360-0000-000	USA-SAN FRANCISCO
1	01-120-7360-0000-000	USA-SAN FRANCISCO

The asset is created from invoice 100 with this information when Sum Units isn't checked.

Description	Cost	Units
Personal Computer	5067 USD	2

The asset contains these distributions:

Units	Expense Account	Location
2	01-110-7360-0000-000	USA-SAN FRANCISCO

How Posted Mass Additions Are Processed

Run the Post Mass Additions process to create assets from mass addition lines. You can run this process as often as necessary during a period.

Settings That Affect the Posting Process

To submit the Post Mass Additions process, select the corporate book for which you want to post your mass additions. If your corporate book isn't listed in the list of values, then one of the following errors may have occurred:

Error	Solution
No mass additions lines in the post queue.	Change the queue to Post for the mass additions that are ready to be posted.
The corporate book isn't effective for these mass additions lines.	Check the effective date range of the corporate book on the Edit Book page.
The Calculate Depreciation process has been run with errors.	Fix the errors and resubmit the Calculate Depreciation process. When the Calculate Depreciation process completes successfully, resubmit the Post Mass Additions process.
The Calculate Depreciation process is currently running for the corporate book.	Wait until The Calculate Depreciation process completes successfully. Then resubmit the Post Mass Additions process.

When you run the Post Mass Additions program, mass additions lines are processed according to the mass addition queue they're assigned to.

Queue Name Before Post	Effect of Post Mass Additions	Queue Name After Post
Post	Creates new asset from mass addition line.	Posted
Cost Adjustment	Adds mass addition line to existing asset.	Posted
Merged	Indicates mass addition line already merged.	Posted
Split	Indicates mass addition line already split; no effect on posting.	Split
New	Indicates new mass addition line; no effect on posting.	New
On Hold or user-defined queue name	Indicates mass addition line on hold; no effect on posting.	On Hold
Delete	Indicates mass addition line awaiting deletion; no effect on posting.	Delete

How Mass Additions Lines Are Posted

The Post Mass Additions program creates assets from mass addition lines in the Post queue. The program also adds mass additions in the Cost Adjustment queue to existing assets.

How Payables Source Lines Are Imported

Use the Create Mass Additions process to send valid invoice line distributions and associated discounts from Oracle Fusion Payables to an interface table in Oracle Fusion Assets. You then review the lines in Assets and determine whether to create assets from the lines.

Settings That Affect the Import Process

For the Create Mass Additions process to import an invoice line distribution to Assets, the following specific conditions must be met:

The invoice line must be charged to an asset account or to an expense account if it's an expensed asset.
The asset account must be set up for an existing asset category as either the asset clearing account or the CIP clearing account.
The line amount can be either positive or negative. The invoice line description will be the mass addition or source line description.
Discount line distributions imported to Assets automatically have a description of Discount.
Track as Asset must be enabled for the invoice line charged to an expense account.
If you have multiple corporate books in Assets, Payables must be tied to the same ledger as the corporate book in which you want to create mass additions.
The invoice must be approved.
The invoice line distribution must be posted to Oracle Fusion General Ledger from Payables.
The general ledger date on the invoice line distribution must be on or before the date you specify for the Create Mass Additions process.
If you use the multiple organization feature, your Payables business unit must be tied to the same ledger as the corporate book for which you want to create mass additions.

To default the asset category when creating mass additions:

Define a default asset category for items in Oracle Fusion Purchasing or Oracle Fusion Inventory.
Create purchase orders for those items.
Receive the items in Purchasing or Inventory.
Enter invoices in Payables, match them to the outstanding purchase orders, and approve the invoices.
Post the invoices to General Ledger.
After you run the Create Mass Additions process, the mass addition line appears with the asset category you specified for the item.

How Invoice Line Distributions Are Imported

The Create Mass Additions process in Payables:

Sends potential asset invoice line distributions and any associated discount lines to Assets.
Doesn't import the same line twice. Payables ensures a line is imported only once even if you run the process multiple times during a period.

Note: If you have multiple corporate books:

Always provide the asset book for all invoices created in Payables to ensure that invoices are interfaced to the correct corporate book.
Verify that you're creating mass additions for the correct corporate book in Assets, because you can't undo the process and resend them to a different book.

The Post Accounting process assignment definitions in Oracle Fusion Subledger Accounting determine the line types that should be interfaced to Assets by the Create Mass Additions process.

Payables sends line amounts entered in foreign currencies to Assets in the converted ledger currency. Assets creates journal entries for the ledger currency amount.

Review the Create Mass Additions report to see both foreign and ledger currency amounts:

Conversion Rate: 1 EUR = 1.25 USD

In Payables, the amounts are converted to dollars, the ledger currency, and sent to Assets by the Create Mass Additions process. The conversion rate is: 1 EUR = 1.25 USD

Journal Entry in Entered Currency:

Account	Debit Amount	Credit Amount
Asset Clearing	4,000.00 EUR	None
Accounts Payable Liability	None	4,000.00 EUR

Journal Entry in Accounted Currency:

Account	Debit Amount	Credit Amount
Asset Clearing	5,000.00 USD	None
Accounts Payable Liability	None	5,000.00 USD

Assets creates a journal entry for the asset addition in dollars. The conversion rate is: 1 EUR = 1.25 USD

Account	Debit Amount	Credit Amount
Asset Cost	5,000.00 USD	None
Depreciation Expense	312.50 USD	None
Asset Clearing	None	5,000.00 USD
Accumulated Depreciation	None	312.50 USD

In General Ledger, the journal is in the ledger currency:

Account	Debit Amount	Credit Amount
Asset Cost	5,000.00 USD	None
Asset Clearing	None	5,000.00 USD

How Project Costing Source Lines Are Imported

You can collect construction-in-process (CIP) costs for capital assets you're building in Oracle Fusion Project Costing. When you finish building your CIP asset, you can capitalize the associated costs as asset lines in Projects and send them to Oracle Fusion Assets as mass addition lines.

When you finish building your CIP asset:

Capitalize the associated costs as asset lines in Project Costing
Send the asset lines to Oracle Fusion Assets as mass addition lines.

Note: If you use Project Costing to build CIP assets, you don't need to create CIP assets in Assets. For costs that originate in Oracle Fusion Payables, you should send CIP costs to Project Costing, and capitalized costs to Assets.

Settings That Affect the Import Process

Asset lines sent from Project Costing to Assets must meet these specific conditions:

The actual date in service must fall in the current or a prior Assets accounting period.
The CIP costs for summarized asset lines must be interfaced to Oracle Fusion General Ledger.
The CIP costs for supplier invoice adjustments must be interfaced to Payables.
A CIP asset must be associated with the asset line.

How Project Lines Are Imported

In Project Costing, run the Transfer Assets to Oracle Fusion Assets process to send asset lines to Assets. This process:

Creates a mass addition line for each asset line in Project Costing.
Merges all mass additions for one asset into a single parent mass addition line. The merged children have a status of Merged.

In Assets:

The parent mass addition is placed in the Post queue if the asset was completely defined in Project Costing and it's ready for posting.
The parent mass addition is placed in the New queue if the asset definition isn't complete.

In this case you must enter additional information for the mass addition and then update the queue status to Post.

Note: You don't need to change the queue status for lines with a status of Merged.

Convert Assets from a Legacy System

This example shows how to convert your existing assets from a previous legacy assets system to Oracle Fusion Assets.

ABC Company has 500 assets listed in its old assets system and now needs to convert the assets into Oracle Fusion Assets.

Load Assets into Oracle Fusion Assets

You can easily load the assets into Oracle Fusion Assets using the Create Asset Additions spreadsheet template.

From the Assets page, click the Add Assets in Spreadsheet panel tab.
Select the book and asset type, and click Go.
Enter your user name and password.
Enter the asset information in the spreadsheet.
Click Submit to save the information.

Note: You can also load asset information into the FA_MASS_ADDITIONS table using SQL*Loader.

Verify That Asset Lines Are Loaded

View or verify the uploaded asset lines and make changes if necessary.

On the Assets page, click the Prepare Source Lines panel tab.
Search for the newly added asset lines.
If necessary, select a line and click Edit from the Actions menu to view or update an asset line.
Click Prepare All to export all lines to a spreadsheet.
Review the assets and enter additional information, if necessary.
Click Submit to save the information.

Post Assets

After you're satisfied that the asset information you loaded is correct, you can create the assets.

Run the Post Mass Additions process to create the assets using one of the following methods:
- Set the assets to Post in your spreadsheet and click Submit and Post Mass Additions.
- After setting the mass additions lines to Post, click the Ready to Post link on the Additions infotile and click Post All.
Verify the post mass addition results in the Post Mass Additions report.

Verify Your Assets

On the Scheduled Processes page, click Schedule New Process.
On the Process Name menu, select Asset Additions Report.
Click OK to run the Asset Additions report to verify that each asset has the correct depreciation method, life, and date placed in service.
Also verify that each asset has the correct cost and accumulated depreciation and that the totals for each asset account are correct.
If you find any errors, click the Adjust Assets panel tab on the Assets page.
Search for the assets with errors to be fixed.
Select the asset and click Change Financial Details.
Make the necessary changes and click Submit.

Note: If you need to make adjustments to a large number of assets, you can process the assets by clicking the Mass tab and creating a batch, or by adjusting assets using a spreadsheet.
For additional verification, click the Perform What-if Analysis panel tab on the Assets page and verify that the expense projections agree with your estimates and that the assets were added properly.

Run Depreciation

After you verify that your assets are correct, click the Depreciation infotile on the Assets page and run the Calculate Depreciation process for the conversion period.

After the Calculate Depreciation process completes, run the Journal Entry Reserve Ledger report.
Use the Journal Entry Reserve Ledger report to verify that the depreciation amounts calculated by Assets are correct.
If you find any errors, click the Adjust Assets infotile on the Assets page.
Search for the assets with errors to be fixed.
Select the asset and click Change Financial Details.
Make the necessary changes and click Submit.

Note: If you need to make adjustments to large numbers of assets, you can process the assets by clicking the Mass tab and creating a batch, or by adjusting assets using a spreadsheet.

Clean Up the Asset Lines

After you successfully create assets, you can remove the asset lines from the FA_MASS_ADDITIONS table.

On the Scheduled Processes page, click Schedule New Process.
On the Process Name menu, select Delete Mass Additions.
Click OK to run the Delete Mass Additions report to view the lines that can be deleted.

Copy Assets to Associated Tax Books

Verify that the asset in your corporate book is correct.
On the Assets page, select your tax book.
Click the Depreciation infotile.
Click Copy from Corporate.
Select the Corporate book period.
Click Submit.

Note: You should set up your tax books so that the first period starts at the same time as the associated corporate book. If your import period is the last period of the previous fiscal year, use Perform Initial Mass Copy. If your import is the first period of the current fiscal year, use Perform Periodic Mass Copy since there is no historical data in Assets.
Reconcile your tax books the same way you did your corporate book.
If you find any errors, make adjustments in the Adjust Assets infotile to correct them.

Note: If you need to make adjustments to large numbers of assets, you can process the assets by clicking the Mass tab and creating a batch, or by adjusting assets using a spreadsheet.

Related Topics

Prepare Source Lines in an Integrated Workbook

Use the Create Asset Additions integrated workbook to manage or edit many source lines.

You can download source lines to an integrated workbook using either of the following two methods:

On the Assets page, click Prepare All in the Actions menu.
On the Prepare Source Lines page, search for the source lines you want to manage or edit and click Prepare All.

Modify the source line information as necessary, and click

Submit to save your changes.
Submit and Post Mass Additions to save the changes and automatically submit the Post Mass Addition process.

Related Topics

Manually Add Assets Using an Integrated Workbook

When you are required to manually add many assets at once, use the Add Assets in Spreadsheet task to download an integrated workbook. Enter all required information and any optional information that your company requires for maintenance and reporting. When you are finished, submit your changes. You can also choose to automatically submit the Post Mass Additions process to create assets.

Related Topics

Fix Posting Errors

To fix posting errors that occur when you run the Post Mass Additions process:

Open the log file of the Post Mass Additions process.
Check the Post Mass Additions Execution Report section for details about which mass additions succeeded and failed.
Note the source line numbers that failed and correct the errors directly in the source line.
Resubmit the Post Mass Additions process.

Add Leased Assets

Overview of Asset Leases

Many organizations lease assets such as real estate, airplanes, trucks, ships, and construction and manufacturing equipment. Leasing assets allows an organization to gain access to assets, while reducing the organization's exposure to the risks of asset ownership. Create asset leases to comply with the IFRS 16 Leases and FASB Leases (Topic 842) accounting standards.

Use Oracle Fusion Assets to:

Create asset leases and calculate the lease liability and cost to be capitalized.
Add leased assets to your asset book.
Calculate periodic depreciation expense and interest expense on the lease liability for finance lease assets.
Calculate periodic lease expense for operating lease assets.
Generate periodic lease payment invoices with the correct distribution account.
Schedule the transfer of lease payment invoices to Oracle Fusion Payables.
Change the lease term and payment schedules, and capitalize the changes to your lease liability.
Terminate the lease at the end of the lease term or earlier.
Report and inquire on leased assets.

Use Payables to:

Validate, approve, and account lease invoices transferred from Assets.
Pay lease invoices on the due date.

Lease Classifications

Leases are classified as either finance leases or operating leases. A lease is automatically classified as a finance lease if any one of the following options is enabled:

Field	Value	Description
Exercise Options	Purchase	Lessee plans to buy the leased asset at the end of lease term.
Major lease term check box	Enabled	Lease term is 75 percent or more of the remaining economic life of the leased asset.
Substantial present value check box	Enabled	Present value of the lease payments is 90 percent or more of the fair value of the leased asset.
Ownership transfer check box	Enabled	Ownership of the leased asset is transferred to the lessee at the end of the lease term.
Specialized asset check box	Enabled	Leased asset has no alternative use to the lessor at the end of the lease term.

If none of these options are enabled, the lease is an operating lease.

Lease Payment Schedules

Depending on how your leases are set up, lease payment schedules are either lease level or asset level payment schedules.

Payment Schedule Type	Description
Lease-Level Payment Schedule	Many assets are leased through a single lease contract with one lease payment schedule for all assets included in that lease. The lease term, lease payment amount, and interest rate are the same for all assets and there are no asset-specific terms in the contract. For this type of lease, you can either add a single asset or you can add each leased asset as a separate asset in the asset book. Lease payments are either recurring or one time. If your lease includes multiple assets, Assets automatically divides the lease-level schedule that you entered into many asset-level schedules based on the number of assets that you specify. Any changes that you make to the lease-level schedule are automatically propagated to all asset-level schedules. Note: You can update an asset-level schedule when the lease payment amount changes for a particular asset. However, any changes you make directly to the asset schedule or any additional asset schedules that were added directly in the Assets tab will make the lease-level schedule inactive, and will hide the Recurring Payments and Onetime Payments tabs.
Asset-Level Payment Schedule	Your lease can have many different assets that are leased through a single lease contract for a specific period, with each asset having its own lease payment schedule. In this case, the lease payment amount and interest rate may be different for each asset. For this type for lease, you can't have any lease-level schedules, and you can enter only a separate payment schedule for each asset in the Assets tab.

Lease-Level Payment Schedule

Many assets are leased through a single lease contract with one lease payment schedule for all assets included in that lease. The lease term, lease payment amount, and interest rate are the same for all assets and there are no asset-specific terms in the contract. For this type of lease, you can either add a single asset or you can add each leased asset as a separate asset in the asset book. Lease payments are either recurring or one time.

If your lease includes multiple assets, Assets automatically divides the lease-level schedule that you entered into many asset-level schedules based on the number of assets that you specify. Any changes that you make to the lease-level schedule are automatically propagated to all asset-level schedules.

Note: You can update an asset-level schedule when the lease payment amount changes for a particular asset. However, any changes you make directly to the asset schedule or any additional asset schedules that were added directly in the Assets tab will make the lease-level schedule inactive, and will hide the Recurring Payments and Onetime Payments tabs.

Asset-Level Payment Schedule

Your lease can have many different assets that are leased through a single lease contract for a specific period, with each asset having its own lease payment schedule. In this case, the lease payment amount and interest rate may be different for each asset. For this type for lease, you can't have any lease-level schedules, and you can enter only a separate payment schedule for each asset in the Assets tab.

Payment schedules include the following:

Payment Type: The type of payment used depends on the frequency of the lease payments. Lease contracts normally use both recurring and one-time lease payments.

Payment Type Name	Description	Payment Types
Recurring Payments	The amount payable on a specific date at a specific frequency for the entire lease term or part of the lease term. The generated amortization schedule shows all of the recurring payments to be made during the lease term.	The recurring payment types are: Periodic lease payment Variable lease payment Other payments
One-time Payments	The amount payable at a specific date during the lease term.	The one-time payment types are: Initial direct cost Advance lease payment Purchase price Residual value Termination penalty

Recurring Payments

The amount payable on a specific date at a specific frequency for the entire lease term or part of the lease term. The generated amortization schedule shows all of the recurring payments to be made during the lease term.

The recurring payment types are:

Periodic lease payment
Variable lease payment
Other payments

One-time Payments

The amount payable at a specific date during the lease term.

The one-time payment types are:

Initial direct cost
Advance lease payment
Purchase price
Residual value
Termination penalty

Payment Date: The date when the payment needs to be made to the lessor.
Interest Due Date: The date when interest on a lease liability is recognized. For a finance lease, interest on a lease liability is recognized in the period in which the interest due date falls. For operating leases, the operating lease expense is recognized in the period in which the interest due date of the periodic lease payment falls. For example, if the lease payment is made on 1 January of every year and the interest on lease liability is calculated 31 December of every year. You must enter an interest due date if you don't enable the Exclude from Liability option.
Amount: Amount payable to the lessor.
Number of Payments: For periodic lease payments, the number of payments is automatically calculated using the lease term, lease payment frequency, and lease payment option.
Interest Rate: Enter only for the payment type Periodic Lease Payment. Only one interest rate is allowed for all payments. You can't have different rate for each payment type.
Exclude from Liability: Indicates whether the lease payment is included in the lease liability calculation.
Exclude from Cost: Indicates whether the lease payment is included in the leased asset cost calculation.

Create a Leased Asset

This example demonstrates how to create a lease from the Create Lease page in Oracle Fusion Assets.

Create a Leased Asset

On the Assets page, click the Manage Leases panel tab.
Click the Create icon.

On the Create Lease page, enter the following values:

Field	Value
Lease Number	GECEOCAR
Lease Description	GE lease for CEO car
Category	VEHICLE-LEASED STANDARD
Payables Business Unit	US1 Business Unit
Lessor	GE Capital
Lessor Site	GE Capital US1
Lease Start Date	1st of current month
Payment Frequency	Monthly
Payment Option	In arrears

On the Financial Terms section of the Create Lease page, enter the following values:

Field	Value
Book	US CORP - USD
Noncancelable Term	60
Major lease term check box	Enabled
Lease Classification	Finance

Scroll down to the Recurring Payments tab and select or enter the following values:

Field	Value
Payment Type	Periodic lease payment
Amount	1,000.00
Interest Rate	5

Click the One Time Payments tab and select or enter the following values:

Field	Value
Payment Type	Initial direct cost
Amount	800.00
Exclude from Liability	Enabled

Click Generate Schedules.
On the Manage Leases page, click the Pending Transactions tab.
Click the GECEOCAR (lease number) link.
On the Review Lease Edits page, click Amortization Schedule. Review the details on the amortization schedule to ensure that the lease is ready to create.
Click OK.
Click Submit.
Click the Leases tab to confirm that your newly added lease appears.
Click Done.

Prepare a Leased Asset for Posting

Click the GE lease for CEO car link to complete the required information needed to complete and post the asset.
On the Edit Source Line page, select Post in the Queue field.
In the Location field, enter USA-CALIFORNIA-REDWOOD CITY-MANUFACTURING.
If you use descriptive flexfields, ensure that you enter the required information.
Click Save and Close.

Post a Leased Asset to Assets

On the Assets page, click the Additions infotile.
Click Ready to Post.
Click Post All.
Click OK.

Run Depreciation

Click the Depreciation infotile.
Click Calculate Depreciation > Calculate Lease Expenses.
Click OK.

Guidelines for Classifying Leases

Leases are either finance leases or operating leases. Oracle Fusion Assets recognizes the lease expense differently, depending on the lease type.

Finance Leases

A lease is classified as a finance lease when the lease meets any of the following criteria at the commencement of the lease:

The lease transfers ownership of the underlying asset to the lessee (your organization) at the end of the lease term.
The lease grants the lessee an option to purchase the underlying asset that you as the lessee are reasonably certain to exercise.
The lease term is for the major part of the remaining economic life of the underlying asset.
The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease equals or exceeds substantially all of the fair value of the underlying asset.
The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.

If your lease is a finance lease, you must recognize the following types of expenses separately:

Interest on the lease liability.
Amortization or depreciation of the right-of-use asset.

When you make a lease payment, you are, in effect, making a capital repayment against the lease obligation, in addition to an interest payment. To show this impact on financial statements, you must recognize the interest expense on the due date and add it to the lease liability balance. The lease liability balance is reduced when you make a lease payment to the lessor.

The amortization schedule calculates and stores the interest amount, principal reduction amount, and interest due date for each lease payment included in the lease liability calculation. Interest expense is recognized in the period in which the interest due date falls.

For leases with payment frequencies that are annual, quarterly, or semiannual, interest expense is recognized once per year, quarter, or half year, respectively. If your lease requires monthly provisioning, create a monthly provisioning recurring journal in your general ledger.

Depreciation for finance lease assets is the same as for owned capitalized assets, using standard depreciation rules, such as the depreciation method, convention, and prorate calendar. When you add your leased asset, the depreciation rules, such as the method and life, are defaulted from the category. You can override the defaulted rules, if necessary.

Interest Expense

Run the Calculate Lease Interest and Expense process for each period to recognize the interest expense on the lease liability in your asset books. You can easily run this process from the Depreciation infotile on the Assets page. Note that you cannot close the period without calculating the lease interest expense for all finance lease assets in the book.

The following table shows an example of an accounting entry for interest expense of 175 USD and the reduction in liability for a lease payment of 1000 USD:

Account	Debit Amount (USD)	Credit Amount (USD)
Lease Interest Expense	175
Lease Liability		175
Lease Liability	1,000
Lease Clearing		1,000

For the interest expense account, all segments except for the natural account are populated by default from the depreciation expense account in the asset assignment. The natural account is populated from the category default accounts. The liability account is the active liability account for the asset.

Assets generates lease payment invoices using the lease clearing account as the invoice distribution account, and transfers the lease payment invoices to Oracle Fusion Payables. From Payables, run the Import Payables Invoices process using the source Assets to import any lease payment invoices.

The following table shows an example of an accounting entry for an invoice of 10000 USD:

Account	Debit Amount (USD)	Credit Amount (USD)
Lease Clearing	10,000
Supplier Liability		10,000

The supplier liability of 10,000 becomes zero when you make a payment for the lease invoice shown in the example. At the end of the lease term, the net book value of the leased asset and its lease liability becomes zero.

When you execute an asset inquiry, the results show the lease interest expense balances, including the periodic interest amount, year-to-date interest amount, interest adjustment amount, and lease and liability balance.

Operating Leases

Any lease that doesn't meet the criteria to be a finance lease is called an operating lease. If your lease is an operating lease, you must recognize a single lease expense, which is calculated to amortize the total cost of the lease over the lease term on a straight-line basis.

The operating lease expense for each period is calculated as the amortization of the remaining cost of the lease at the beginning of the period over the remaining lease term on a straight-line basis. The remaining cost of the lease is calculated as the net book value of the asset plus the outstanding interest on the lease liability.

Operating leases do not depreciate. When you add an operating lease asset, Assets automatically deselects the Depreciate check box on the Add Asset or Edit Source Line pages. When you run the Calculate Depreciation process, no depreciation is calculated for operating leases.

Interest Expense

Run the Calculate Lease Interest and Expense process to calculate and recognize operating lease expense. Note that you cannot close the period until you calculate operating lease expense for all operating lease assets in the book.

The following table shows an example of accounting entries for operating lease expense and reduction in liability:

Account	Debit Amount (USD)	Credit Amount (USD)	Comments
Operating Lease Expense	1,200		NA
Lease Liability		900	Interest on lease liability
Depreciation Reserve		300	300 = 1,200 - 900
Lease Liability	1,000		Lease payment amount
Lease Clearing		1,000	Lease payment amount

At the end of lease term, the net book value of the leased asset and its lease liability are both zero.

For the operating lease expense account, all segments except the natural account are populated from the depreciation expense account in the asset assignment. The natural account is populated from the category default accounts. The liability account is the active liability account for the asset. The depreciation reserve account is derived using the same logic used for the depreciation accounting for finance lease assets and owned assets.

If any transactions occur after the operating lease expense is recognized for the current period, the recognized lease expense is automatically rolled back. You must rerun the Calculate Lease Interest and Expense process to include the new transactions.

Note: No catch-up operating lease expense is calculated for backdated operating leases. You must manually enter the opening depreciation reserve at the time you add the operating lease right-of-use asset, or later before closing the period in which asset was added.

Guidelines for Calculating Monthly Lease Interest for Nonmonthly Lease Payments

Each lease you create has a specified payment frequency, most commonly monthly, quarterly, semi-annual, or annual. Normally, the Calculate Lease Expenses process accounts for interest on lease liability or operating lease expense on each interest due date on the amortization schedule.

Let's say your lease has a payment frequency of quarterly, meaning the Calculate Lease Expenses process accounts for interest on lease liability every three months. Now suppose you want the accrued interest to be calculated monthly, even though your lease has a payment frequency of quarterly. You can enable the Calculate monthly accrued interest option and the process calculates interest monthly rather than quarterly.

When you enable the Calculate monthly accrued interest option, the Generate Schedules process:

Calculates the present value based on the lease payment frequency, and then allocates the calculated interest evenly for each month in the quarter, half year, or year. The amortization schedule includes the interest amount and liability for each month.
Divides the calculated quarterly interest equally among the months in the payment period and accounts for the interest in the respective month.

To clarify, suppose you create a lease with a lease start date of 01-Jan-2019 and a payment frequency of quarterly. The lessee makes lease payments for 2019 on 31 March 2019, 30 June 2019, 30 September 2019, and 31 December 2019. The Generate Schedules process calculates the present value for quarterly frequency and generates either a quarterly or monthly amortization schedule, depending on whether you enabled the Calculate monthly accrued interest option.

Enabled: The process divides the interest amount for the first quarter by three and accounts for it on 31 January, 28 February, and 31 March.
Not enabled: The application accounts for interest on finance lease liability for the first quarter on 31 March 2019 and there is no interest expense in the January and February periods.

Convert Existing Leases

You may have many leases with quarterly, semi-annual, or annual frequency that were created before this option was available. What if you want to convert them to use a monthly accrued interest amortization schedule? You can perform a Change Financial Term or Reassessment transaction in the Change Financial Terms page or you can use the Fixed Asset Lease Import file-based data import template to enable this option.

Keep in mind that when you enable the option by performing a reassessment transaction:

The amortization schedule starts from the current lease quarter. For example, if you perform a reassessment transaction in May 2020, the amortization schedule starts in April and the Calculate Lease Expenses process accounts for catch-up interest expense for April.
When you run the Calculate Lease Expenses process for the period, the process begins calculating monthly interest from May.

How Fixed Asset Lease Import Data Is Processed

Use the Fixed Asset Lease Import process to upload your lease data into your corporate book. The template contains an instruction sheet to help guide you through the process of entering your asset information.

To access the template, complete the following steps:

Navigate to the File-Based Data Import for Oracle Financials Cloud guide.
In the Table of Contents, click File-Based Data Imports.
Click Fixed Asset Lease Import.
In the File Links section, click the link to the Excel template.

Follow these guidelines when preparing your data in the worksheet:

Enter the required information for each column. Refer to the tool tips on each column header for detailed instructions.
Do not change the order of the columns in the template.
You can hide or skip the columns you do not use, but do not delete them.

Settings That Affect the Fixed Asset Lease Import Process

The Fixed Asset Lease Import template contains an instructions tab, plus three tabs that represent the tables where the data is loaded:

Spreadsheet Tab	Description
Instructions and CSV Generation	Contains instruction information about preparing and loading data, the format of the template, submitting the Import Asset Leases process, and correcting import errors.
FA_LEASES_INT	Enter information about the leased assets that you are adding, terminating, or reassessing, including the transaction group, transaction type, and lease number.
FA_LEASE_BOOKS_INT	Enter information about the asset books the lease will be assigned to.
FA_LEASE_SCHEDULES_INT	Enter information about the payment schedule information for each leased asset.

How Lease Import Data Is Processed

After you successfully load your data, you must submit the Import Asset Leases process to import the data into the application tables and create the assets. To submit the Import Asset Leases process:

Navigate to the Scheduled Processes page.
Search for the Import Asset Leases process.
Click OK.
Select the book.
Monitor the scheduled process.
If the Import Asset Leases process ends in error or warning, review the log file for details about the rows that caused the failure. To correct import errors, open the .csv output file, correct the errors, and resubmit the process.

Lease Termination

You can terminate a lease at any time during the lease term. If you terminate a lease before the expiration of the lease term, you must account for it by removing the right-of-use asset and the lease liability, with profit or loss recognized for the difference. If you terminate a lease at the end of the lease term, the lease liability balance and net book value of the asset are already zero, and no gain or loss needs to be recognized.

You can terminate an entire lease or only specific assets within a lease.

Terminate an entire lease: enter termination details in the lease-level payment schedule.
Terminate specific assets within a lease: enter termination details in the asset-level payment schedule.

When you terminate a specific asset within a lease, the lease-level schedule becomes inactive because the lease-level schedule is no longer the sum of all asset-level schedules.

After you post a lease termination transaction, the process automatically creates a draft retirement. You then review and post the retirement transaction.

Restrictions

After terminating a lease, you cannot:

Roll back the lease termination transaction
Reinstate the leased asset retirement

Terminate a Lease

This example demonstrates how to terminate a lease from the Manage Leases page.

Terminate a Lease

Navigate to the Manage Leases page.
Click the Leases tab.
From the Actions menu, click Terminate.
On the Terminate Lease page, click the Recurring Payments tab.
Enter a Termination Date for all active periodic lease payment rows. The date must fall in the current open period.
Select the Period End Liability option to indicate that the termination is effective from the start end of the period.
On the One Time Payments tab, select Termination payment in the Payment Type column.
Enter the amount of the termination penalty.
Click Generate Schedules to calculate the new lease liability.

Verify Lease Termination

Navigate to the Manage Leases page.
Click the Leases tab.
From the Actions menu, click Review Termination.

Verify the following values on the Review Termination page:

Field	Description
Cost	Current cost of the associated leased assets.
Liability	Lease liability at the start of the period.
Net Book Value	Net book value of the leased asset.
New Cost	Cost of the associated leased assets after the termination.
New Liability	Principal reduction portion in the current period lease payments.
Gain or Loss	Difference between the book value of the asset and the change in liability (liability minus the new liability).

If all of the values are correct, click Submit.

Correct Lease Termination Errors

If any of the values are incorrect on the Review Termination page, update the termination transaction with the correct values.
Click Generate Schedules to regenerate the amortization schedule.
Repeat the steps for Verifying a Lease Termination.

Review the Draft Retirement Transaction

Navigate to the Assets page.
Click the Retirements infotile.
Click Transactions.
Review the retirement transaction.
If the information for the retirement transaction is correct, click Submit to post the retirement transaction.

How Lease Liability on Terminated Leases Is Calculated

When you terminate a lease, the Generate Schedules process automatically updates the lease liability to be retired based on your settings.

Period End Liability Options

The Generate Schedules process calculates the change in lease liability due to termination based on the Period End Liability option.

Period End Liability Option Setting	Description
Yes	Termination is effective at the end of the period.
No	Termination is effective at the start of the period.

Calculation of Lease Liability on Terminated Leases

The lease liability to be retired is calculated as follows:

Period End Liability is set to Yes:

Current liability at the start of the period, minus the principal reduction for payments with an interest due date in the current period, minus the increase in the termination penalty.
Period End Liability is set to No:

Current liability at the start of the period minus the termination penalty, if any, with the interest due date in the current period.

The gain or loss on termination calculated as follows:

Cost minus depreciation reserve minus impairment reserve, if any, minus the lease liability to be retired.

Note: The depreciation reserve balance is calculated using the default retirement convention of the asset category.

When you post the termination transaction, a retirement transaction is created for each associated asset. This table shows sample accounting entries for the retirement transaction:

Account	Debit Amount (USD)	Credit Amount (USD)
Depreciation Reserve	800
Impairment Reserve	200
Lease Liability	1,100
Asset Cost		2,000
Gain on Leased Asset		100

Example:

Your company enters into a six-year lease of equipment with annual lease payments of $59,000, payable at the end of each year. Your company classifies the lease as a finance lease. At the end of Year 5, you have the option to terminate the lease for $5,000. You decide that your company has a significant economic incentive to exercise the termination option.

The rate that the lessor charges your company is the rate implicit in the lease, which is 6.33 percent. You measure the lease liability at the commencement date at $250,000 (the present value of five payments of $59,000 plus the present value of the termination option payment of $5,000).

At the lease commencement date, you recognize lease assets and liabilities as shown in this table:

Accounts	Debit Amount (USD)	Credit Amount (USD)
Right-of-Use Asset	250,000
Lease Liability		250,000

Finance Lease:

Your company amortizes the right-of-use asset over the lease term of five years. You expect your company to consume the asset's future economic benefits evenly over the five years and you amortize the asset on a straight-line basis.

During the first year of the lease, you recognize interest on the lease liability and amortization of the right-of-use asset as follows:

Accounts	Debit Amount (USD)	Credit Amount (USD)
Interest Expense	15,825 (6.33% x 250,000)
Lease Liability		15,825
Depreciation Expense	50,000 (250,000 / 5)
Depreciation Reserve		50,000

At the end of Year 1, the right-of-use asset is $200,000 ($250,000 - $50,000) and the lease liability is $206,825 ($250,000 + $15,825 - $59,000).

At the end of Year 5, the right-of-use asset is amortized to $0 ($250,000 - $50,000 x 5) and has a liability of $60,190 relating to the last lease payment and termination penalty.

You terminate the lease with the Period End Liability option set to Yes and make the final lease payment. Because the termination occurs at the end of the lease term, there is no gain or loss on this transaction.

Year 5:

This table shows the accounting entry for interest on liability:

Accounts	Debit Amount (USD)	Credit Amount (USD)
Lease Interest Expense	3,810 (interest amount)
Lease Liability		3,810
Lease Liability	64,000 (lease payment)
Lease Clearing		64,000

This table shows the retirement accounting entry:

Accounts	Debit Amount (USD)	Credit Amount (USD)
Depreciation Reserve	250,000
Right-of-Use Asset		250,000

This table shows the lease invoice accounting entry:

Accounts	Debit Amount (USD)	Credit Amount (USD)
Lease Clearing	64,000
Supplier Liability		64,000

This table shows the lease invoice payment accounting entry:

Accounts	Debit Amount (USD)	Credit Amount (USD)
Supplier Liability	64,000
Bank		64,000

If the termination penalty is $6,000, then the increase or decrease in liability is first calculated and then reflected in the accounting entries.

In year 5, the lease liability to be retired is calculated as the current liability at the start of the period ($60,190), minus the principal reduction for current period payments ($60,190), plus the increase in the termination penalty ($1,000).

In this example, the increase or decrease in liability is 1,000.

This table shows the accounting entry for interest on liability:

Accounts	Debit Amount (USD)	Credit Amount (USD)
Lease Interest Expense	3,810 (interest amount)
Lease Liability		3,810
Lease Liability	65,000 (lease payment amount + increase or decrease in liability)
Lease Clearing		65,000

This table shows the retirement accounting entry:

Accounts	Debit Amount (USD)	Credit Amount (USD)
Depreciation Reserve	250,000
Right-of-Use Asset		250,000
Lease Liability		1,000
Gain or Loss	1,000 (increase or decrease in liability)

This table shows the lease invoice accounting entry:

Accounts	Debit Amount (USD)	Credit Amount (USD)
Lease Clearing	65,000
Supplier Liability		65,000

This table shows the lease invoice payment accounting entry:

Accounts	Debit Amount (USD)	Credit Amount (USD)
Supplier Liability	65,000
Bank		65,000

Group Assets

Group Asset Depreciation

In many countries, local tax regulations require companies to depreciate assets in a composite or aggregate form, rather individually, for each asset. You can use the Group Depreciation feature to set up logical groupings of assets based on regulatory requirements and your own business needs. These logical groupings of assets are called group assets.

Group asset depreciation helps you to:

Reduce data entry requirements because you define depreciation parameters at the group asset level rather than at the individual asset level.
Handle complex transactions for group assets and their member assets.

For example, let's say you work for a major corporate enterprise and your company wants to pool together collections of similar assets to ease financial reporting. You can add many individual assets to the group that were placed in service in different years, but maintain only one depreciation amount for the group. In most cases, the Calculate Depreciation process calculates and stores depreciation amounts at the group level.

Use the Group Depreciation feature to help you to accommodate many global regulatory requirements, including:

United States Telecommunications (FCC) and Utility (FERC) compliance reporting.
Canada Capital Cost Allowance (CCA) compliance reporting.
Indian group asset management and compliance reporting.

Related Topics

Set Up Group Assets in the Corporate Book

Group Assets

A group asset is a collection of member assets. Member assets are the individual assets that belong to a group asset.

You can transfer member assets in or out of a group asset, as well as transfer member assets between group assets. The group asset cost is equal to the sum of all of the member asset costs.

Use the asset type Group only for group assets. This table shows the assets supported by each asset type:

Asset	Description	Asset Type
Group Asset	An asset containing a collection of member assets.	Group
Member Asset	An asset that's part of a group asset.	Capitalized or CIP
Individual Asset	A standalone asset that doesn't belong to a group asset.	Capitalized, CIP or Expensed.

Related Topics

Set Up Group Assets in the Corporate Book

Guidelines for Creating Group and Member Assets

Keep the following points in mind when creating group and member assets:

Capitalized and CIP assets can be members of a group asset if they belong to the same corporate book.
Carefully evaluate all group asset attributes based on your business requirements before creating group assets. Once you add members to a group, you can't update these attributes.
When you define depreciation rules for a group asset, the group asset rules supersede those of the associated member assets.
When you perform transactions to member assets, such as additions, adjustments, and group reclassifications, these transactions are treated as amortized adjustments to the member assets. Note that you can't perform expensed adjustments to group assets.
When you retire a member asset, it reduces the cost of the group asset and therefore, reduces the accumulated depreciation based on the retirement option you selected.
The application uses the group asset date placed in service to determine when a group asset starts depreciating. You can't update this date once the group asset begins depreciating.
You can add member assets with a date placed in service that's different than that of its group asset, but the date placed in service of the member asset can't be older than the date placed in service of the group asset.
If you add a member asset with a prior period date placed in service, the application treats the member asset addition as an amortized cost adjustment to the group asset from the date placed in service of the member asset.
When you add a CIP member asset to a group asset, the application doesn't add the CIP member asset cost to the group asset until the CIP member asset is capitalized. This rule doesn't apply when you enable the Allow CIP depreciation option on the Create Book page. You can add the CIP member asset cost to the group asset by setting the Depreciate By option to Group method on the Edit Category page.
You can perform unplanned depreciation on member assets only if you specify a Tracking Method on the Create Category or Edit Category page.
The application stores and tracks the cost at the member asset level and summarizes the cost at the group asset level.
The application tracks accumulated depreciation for the group asset only.
After you add a member asset, you run the Create Accounting process with the Post to General Ledger option enabled, and the process posts the member asset cost to General Ledger for the individual member asset. The Group Asset Summary and Group Asset Detail reports display the accumulated depreciation of the member assets at the group level.

Guidelines for Copying Group Assets to the Tax Book

When you copy assets to your tax book using the Perform Initial Mass Copy process or the Perform Periodic Mass Copy process, the tax rule settings you specified in the Create Book or Edit Book page reflect how the application copies group assets.

If you allow group assets in your tax book, the mass copy process results in the following:

Group Assets Allowed in Corporate Book	Mass Copy Results
Yes	The process copies group and member assets to the tax book based on the mass copy options you specify in the Tax tabbed region in the Rules section of the Edit Book page.
No	If group assets aren't allowed in the corporate book, you can't allow them in the tax book, so no group assets are copied by the mass copy process.

If you don't allow group assets in the tax book, mass copy results in the following:

Group Assets Allowed in Corporate Book	Mass Copy Results
Yes	Group assets aren't copied to the tax book. The mass copy process copies all member assets to the tax book as standalone assets.
No	If group assets aren't allowed in the corporate book, you can't allow them in the tax book, so no group assets are copied by the mass copy process.

Note: The mass copy process doesn't copy any type of group adjustment, including group reserve transfers, group retirement adjustments, and group unplanned depreciation.

Adjust Retirements for Group Assets

When you retire member assets that are part of a group asset, it may make sense to enter the cost of removal and proceeds of sale against the group, rather than apportioning the amounts to the individual member assets.

In addition, when you retire individual assets, the cost of removal and proceeds of sale aren't always known. In this case, you enter the cost of removal and proceeds of sale directly into the group asset, independent of any retirement transactions.

To enter the cost of removal and proceeds of sale directly into the group asset:

Search for the group asset.
Under Actions, select Adjust Retirement.
On the Adjust Retirement page, enter the cost of removal and proceeds of sale for the group asset.
Click Submit.

The Create Accounting process creates these journal entries:

Account Description	Debit	Credit
Group Asset Accumulated Depreciation	Cost of Removal
Cost of Removal		Cost of Removal
Proceeds of Sale	Proceeds of Sale
Group Asset Accumulated Depreciation		Proceeds of Sale

Acquire Assets FAQs

What's a CIP asset?

You create and maintain construction-in-process (CIP) assets as you spend money for raw materials and labor to construct them. CIP assets do not depreciate. When you finish building a CIP asset, you place it in service and begin calculating depreciation for the asset.

You can track CIP assets in Oracle Fusion Assets, or you can track detailed information about your CIP assets in Oracle Fusion Projects.

How can I save an addition or retirement transaction in draft mode?

You can store your asset additions or retirements before processing the transactions. Save the transaction as a draft by clicking Save instead of Submit.

How can I add an expensed asset?

On the Assets page, click the Add Asset panel tab and select the Asset Type Expensed. Make sure the category you select is an expensed category and continue adding the asset as you normally would.

Note: When setting up expensed categories, the Capitalize check box isn't checked and any assets added to this category aren't depreciated. Before adding an expensed asset, ensure that the expensed category is assigned to the asset book.

How can I enable the Calculate monthly accrued interest option?

Enable the Calculate monthly accrued interest option in the Change Financial Terms page. Remember that you can't modify any other lease attributes while enabling this option. Also, you can enable or disable this option only during the period in which the lease is added.