Example of Creating an Expense Asset at Receipt

This example shows you how to create an asset with a destination of Expense when the asset is received.

Normally, these tasks are performed by many different people, but for purposes of this example, we'll assume that one person is performing all tasks.

1. In Oracle Product Management, create an item in the Create Item page.
2. Associate the inventory organization with the item on the Associations tab in the Create Item page.
3. On the Specifications tab in the Create Item page, navigate to Item Organization > Service and enter these values:

   Field	Value
   Enable Asset Tracking	Full Lifecycle
   Create Fixed Asset	At Receipt
   Enable Asset Maintenance	Yes

4. On the Specifications tab in the Create Item page, navigate to Item Organization > Purchasing.
5. In the Asset Category field, select the asset category.
6. In Oracle Fusion Cloud Procurement, enter a purchase order with two item lines. Each schedule has a single distribution for each item with the PO Charge Account as the Asset Clearing account.
   Note: The PO charge account can be the asset clearing account or any other charge account. This account is credited as the asset clearing account when the asset accounting entries are posted.

   Item	Quantity	Price	Ordered	Recoverable Taxes	Nonrecoverable Taxes	Total Tax	Line Total
   Item 1	1	1000.00	1000.00	75.00	25.00	100.00	1100.00
   Item 2	2	2000.00	4000.00	300.00	100.00	400.00	4400.00
   Totals	NA	NA	5000.00	375.00	125.00	500.00	5500.00

7. Receive the items into the inventory organization defined in the purchase order.
8. In Oracle Cost Management, run the Transfer Transactions from Receiving to Costing process.
9. In Oracle Supply Chain Execution, navigate to Supply Chain Execution > Receipt Accounting.
10. Click Create Receipt Accounting Distributions in the task pane.
11. Click Submit to run the Create Receipt Accounting Distributions process.
12. Click Create Accounting in the task pane.
13. In the Subledger Application parameter, select Receipt Accounting.
14. Click Submit to run the Create Accounting process.
15. Click Review Receipt Accounting Distributions on the task pane.
16. Search for the receipt accounting distributions you created in step 10.
17. Check that the Transaction Status is Final accounted.
18. In the Transaction Details and Distributions section, verify that the journal entries are correct. This table shows how the journal entries appear:

    Accounting Line Type	Cost Source	Debit	Credit
    Receiving Inspection	Receipt into Inspection	1000.00
    Expense Accrual	Receipt into Inspection		1000.00
    Expense	Delivery to Expense	1000.00
    Receiving Inspection	Delivery to Expense		1000.00
    Expense Accrual	Transaction Taxes		25.00
    Receiving Inspection	Transaction Taxes	25.00
    Receiving Inspection	Receipt into Inspection	4000.00
    Expense Accrual	Receipt into Inspection		4000.00
    Expense	Delivery to Expense	4000.00
    Receiving Inspection	Delivery to Expense		4000.00
    Receiving Inspection	Transaction Taxes	100.00
    Expense Accrual	Transaction Taxes		100.00

19. In Oracle Maintenance, run the Transfer Costs to Cost Management process.
20. In Oracle Payables, create a receipt matched invoice with 10 percent invoice price variance.
21. Approve the invoice and run the Create Accounting process. This table shows how the journal entries appear:

    Line Number	Account Details	Debit	Credit
    1	Accrual	4000.00
    2	Accrual	1000.00
    3	Miscellaneous	600.00
    4	Tax Recoverable	375.00
    5	Invoice Price Variance	400.00
    6	Freight	300.00
    7	Nonrecoverable Tax	125.00
    8	Invoice Price Variance	100.00
    9	Liability (invoice and invoice price variance)		5500.00
    10	Liability (all other lines)		1400.00

    Payables accounts for the Invoice Price Variance, Freight, Miscellaneous, Freight, Recoverable and Nonrecoverable Taxes and Tax Invoice Price variance.

22. In Oracle Maintenance, run the Transfer Receipts to Mass Additions process to transfer the invoice information to Oracle Assets. This process transfers information such as nonrecoverable taxes, invoice price variance, freight, and tax invoice price variance to Assets as a cost adjustment.
23. In Oracle Assets, prepare and post the source lines.
24. Run the Create Accounting process.
25. View your journal entries. This table shows how the journal entries appear. Two assets are created for the two items in the purchase order.
    Note: Recoverable taxes aren't transferred to Assets.

    Line Number	Account Details	Debit	Credit
    1	Asset Cost	5220.00
    2	Asset Cost Clearing		5220.00

    Line Number	Account Details	Debit	Credit
    1	Asset Cost	1305.00
    2	Asset Cost Clearing		1305.00