Oracle Financials Cloud

Asset Acquisition To Retirement

Vinit Poddar Sreeni Devireddy Harsh Tulsyan

Product Management Director Product Management Director Principal Product Manager
Oracle Development Oracle Development Oracle Development
 [ 27 Nov - 01 Dec ]

[ 11 Dec - 15 Dec ]

[ 08 Jan - 11 Jan ]

2 Copyright © 2021, Oracle and/or its affiliates | Confidential: Restricted

Agenda

• Overview

• Process Flow Demo

• Additional Features
Day in life of an Asset

4
 Process Flow

Transfer Asset
• Supplier Transfer Fixed
Invoices/Receipt to FA Create Assets Adjust Assets
Invoice to Assets
Dept (2) (4)
Payment (3)
(1)

Calculate Asset
Manage Fixed
Manage Tax Book Depreciation • Period Close to
Asset Disposal
(5) and Period Close Financial Report
(6)
(7)

5
Asset Book Architecture – Use Case 1

Business Requirement: A company with operations in United States needs to prepare

financial statements for reporting purposes. The Tax department has special depreciation
requirements for taxation (IRS) purposes – Federal Tax and Alternative Minimum Tax (AMT)
Recommendation: Create a corporate book and 2 associated tax books

US Ledger
Corporate Book
US GAAP Book: US CORP
US COA Ledger: US Ledger
US Calendar Post to Ledger: Yes
USD

Federal Tax Book AMT Book

Associated Corporate Book: US Associated Corporate Book: US
CORP CORP
Ledger: US Ledger Ledger: US Ledger
Post to Ledger: No Post to Ledger: No
6
Asset Book Architecture – Use Case 2

Business Requirement: A company operating in UK is a subsidiary of a US company. It has

to prepare its financial statements in GBP for reporting purposes and in United States
Dollar (USD) for the parent company US GAAP and has consolidation requirements
Recommendation: Create a single corporate book and map it to primary ledger with
reporting currency.

UK Ledger Assets automatically

Corporate Book creates a reporting
Book: GBP CORP book for each
Corp COA Currency: GBPFederal T reporting currency of
Corp Calendar Post to Ledger: Yes the ledger.
GBP
Reporting Currency
Book USD
Reporting Curr.
Ledger USD

7
Asset Book Architecture – Use Case 3

Business Requirement: A company with operations in United States needs to prepare its
financial statements under both US GAAP and IFRS.
Recommendation: Create a corporate book for the US GAAP primary ledger and an
associated tax book for the IFRS secondary ledger.
Ledger Primary Ledger Secondary*
Subledger Application
FASB Rules IFRS Rules
Corp COA Corp COA Application: Assets
Corp Calendar Corp Calendar Support multiple valuation methods : Yes
USD USD
*Data Conversion Level: Subledger

Subledger Accounting Options -

CORP Book IFRS Tax Book Assets
Primary Ledger Assoc. with CORP BOOK
Post to Ledger: Yes Secondary Ledger Subledger Accounting Enabled: Yes
Post to Ledger: Yes Valuation Method Ledger: Yes

8
Asset Book Architecture – Use Case 4
Ledgers and Impact on
Asset Structure

Business Requirement: A company with operations in United Kingdom needs to prepare its
financial statements under both local rules as well as US GAAP.
Recommendation: Create a corporate book for the UK GAAP primary ledger and an associated
tax book for the US GAAP secondary ledger. The Secondary ledger currency is different from
the primary ledger
Ledger Primary Ledger Secondary*
Subledger Application
UK Rules US GAAP Rules Application: Assets
Corp COA Corp COA
Support multiple valuation methods : Yes
Corp Calendar Corp Calendar
GBP USD
*Data Conversion Level: Subledger

Subledger Accounting Options -

GBP CORP Book US GAAP Tax Book Assets
Primary Ledger Assoc. with CORP BOOK
Post to Ledger: Yes Secondary Ledger Subledger Accounting Enabled: Yes
Post to Ledger: Yes Valuation Method Subledger: Yes

9
Use Case Scenario
Use Case Scenario
InFusion Corporation has business in US and UK. US
entity is the parent entity of UK. The UK entity purchases
an asset item which has different depreciation
requirement in UK and US. The asset need to be recorded
in accordance with both UK and US laws, since the
financials of UK need to be consolidated and reported
along with US
10
Key Features for discussion & demo
• Capitalization of Fixed Assets
• Multiple Representation of Assets
• Depreciation Calculation
• Asset Retirement
• Tax Impact on asset capitalization
Agenda for Discussion
• Configuring Asset Books
• Configuring Asset Categories
• Perform End-to-End transaction flow
Enterprise Structure

InFusion Corporation

InFusion US Ledger InFusion UK Ledger

GB Corp Book
[USD, Corp COA, US GAAP] [GBP, Corp COA, IFRS]

InFusion UK RC InFusion UK SL Ledger

GB GAAP Book
Ledger [USD, Corp COA, US
[USD, Corp COA, IFRS] GAAP]
(Tax)

InFusion US1 InFusion US2

Business Business InFusion UK
Unit Unit Business Unit

11
Security Model

Security Reference Manual for Financials

User
Asset Accountant
Performs asset transactions including additions,
adjustments, transfers, and retirements, ensuring accuracy
and completeness. Verifies asset information, transaction
details, and accounting entries through inquiry and reports
Job Role Duty Role
Asset Accounting Manager
Manages fixed assets department and personnel. Monitors
Security Context and performs asset transactions, maintains asset books
Business Unit and set ups in Oracle Fusion Assets, and views asset
Data information and accounting entries
Data Access Set
Access Ledger
Cost Organization
Asset Book

12
Agenda

• Overview

• Process Flow Demo

• Additional Features
 Transfer Asset Transfer
Create Adjust
Invoices to FA Fixed
Assets Assets
(1) Transfer Asset Invoices to FA Department Dept Assets

Calculate Asset
Manage
Manage Tax Depreciation
Fixed Asset
• Demo
Book and Period
• Setups Disposal
Close

✓ Asset Flexfields ✓ Create Purchase Order

Category
✓
✓ Match Invoice to PO
✓ Location
✓ Key ✓ Create Freight Line
✓ System Controls ✓ Create Recoverable and Non-Recoverable Tax
✓ Asset Book ✓ Create Invoice Accounting
✓ Asset Category

Best Practice – Transfer asset data from Payables on a daily

basis and process & post mass additions on a regular basis

14
 Asset Book and Category

US Asset Book
CORP Book

Major
Category Auto Buildings

Other category segments determined

Minor by the different variations in rules
applicable
Top category to assets within that
segment
Category determined by balance sheet
Standard Luxury Office category e.g. prorate convention,
categories
depr. methods, life, etc

Depr.
Rules Straight Line Straight Line Straight Line
10 year 20 years 30 years

15
 Asset Book and Category

US Asset Book UK
CORP Book CORP Book

Major
Category Auto Buildings Auto Buildings

Minor
Category
Standard Luxury Office Standard Luxury Commercial

Depr.
Rules Straight Line Straight Line Straight Line Written Written Written
10 year 20 years 30 years Down Value Down Value Down Value
10% 5% 3%

16
Asset Rapid Implementation ✓ Rapid Implementation Spreadsheet

3 1

Import Asset Configuration Workbook

Import the file using the import fixed asset
configuration task

2
Upload
“Generate Configuration File” button creates files
for upload. Upload the zip file in UCM directory
17
Procure to Pay Accounting

Receipt Accruals
Charge A/c Charge A/c • DR Asset/CIP Clearing • DR AP Accrual
Asset/CIP Clearing Asset/CIP Clearing • CR AP Accrual • CR Liability

Purchase
Requisition Receipt Invoice
Order

Encumbrance (C) Encumbrance (O) Liquidate

Encumbrance

Period End Accruals

Charge A/c Charge A/c • DR Asset/CIP Clearing
Asset/CIP Clearing Asset/CIP Clearing No Accounting
• CR Liability

Purchase
Requisition Receipt Invoice
Order

Encumbrance (C) Encumbrance (O) Liquidate

18
Encumbrance
 Rule Based Asset Book Default (21D)

Asset book defaulting rules (applicable only for invoices transferred from Payables):

• Natural Account - Enabled by default and can’t be disabled

• Primary Balancing - Can be enabled or disabled at anytime

• Cost Center - Can be enabled or disabled at anytime

Create Mass Additions processes invoices as below:

• Checks only the distribution natural account to decide whether to transfer to FA

• If eligible, transfers the invoices that matches the invoice rules of the selected asset book

✓ Example

19
 (1) Transfer Asset Invoices to FA Department

Following validations are performed to transfer AP Invoice distributions to FA:

• Invoice must be finally accounted

• If distribution account is an asset account, then the account must be set up as the asset clearing account (capitalized
asset) or CIP clearing account (CIP Asset)

• If distribution account is an expense account, then track as an asset check box must be enabled (Expensed Asset)

• GL Date on the invoice distribution is on or before the date specified for Create Mass Addition Request

• The BU on the invoice must be attached to the same ledger as the ledger attached to the corporate book for which Create
Mass Addition Request is run

• User running mass additions should have access to the ledger

• Non-Recoverable taxes are transferred to FA, Recoverable tax is not ✓ Conditions for Asset Transfer

20
 Asset Location to Ship-To Location Mapping (21B)

• Fixed Asset location can be mapped to the Ship To location in order to derive the asset location
automatically based on the location where the assets were delivered

• Update Fixed Asset Configuration Sheet is updated to include the location mapping sheet

21
 (2) Transfer Expense Destination Receipts to FA Department (23B)

Following configurations are performed to enable this new feature:

• Use the opt-in for Capitalize Fixed Assets Upon Purchase Receipt to Expense Destination feature in Supply Chain
Management-

Setup and Maintenance > Manufacturing and Supply Chain Materials Management > Change Feature Opt
In > Maintenance Management > Edit Feature > Capitalize Fixed Assets Upon Purchase Receipt to Expense Destination.

• Associate the Asset Corporate book to your inventory organization.

• Enable the Create Fixed Asset at Receipt option for the purchase order line item in the item definition for that specific
inventory organization.

22
 (2) Transfer Expense Destination Receipts to FA Department
(23B)..continued

When adding and processing the purchase order for capitalization at receipt, ensure that these conditions are met:

•The Destination Type is set to Expense.

•Select the Accrue at Receipt option and accrue the purchases as you receive them.

•The Create Fixed Asset at Receipt option is enabled for the item on the purchase order line.

•The purchase order is created after the cut-off date to enable this feature. From 23D it is always enabled.

•Only non-project-based purchase receipts are transferred to Assets.

•Receive the item into the inventory organization associated with an Assets corporate book.

•Account the receipt fully before transferring any information to Assets.

23
End to End Process Flow | Discussion & Demo

Purchasing Cost Management/Maintenance

• Create Purchase Order with Accrue at Receipt and destination type as • Transfer Costs to Cost Management, (Cost Management)
Expense • Create Receipt Accounting Distributions (Cost Management)
• Submit PO for Approval. • Transfer Receipts to Mass Additions (Oracle Maintenance)

Inventory
• Receive PO into inventory org where corporate book has been associated.

Cost Management/Maintenance
• Transfer Transactions from Receiving to Costing
• Create Receipt Accounting Distributions
• Run the Create Accounting process for your receipt, and posting as Yes
• Optionally Review Receipt Accounting Distributions
• Transfer Receipts to Mass Additions

Asset
• Prepare Asset Source Line
• Post Mass Addition

✓ Receipt Based Asset (23B)

Payables
• Create Asset invoice matched with PO/Receipt.
• Validate invoice and Post to Ledger

24 Copyright © 2023, Oracle and/or its affiliates | Confidential: Restricted

 Transfer Asset Transfer
Create Adjust
Invoices to FA Fixed
(3) Create Assets Dept
Assets
Assets
Assets

Calculate Asset
Manage
Manage Tax Depreciation
Fixed Asset
Book and Period
Disposal
• Setups • Demo Close

✓ Depreciation Methods
✓ Asset Calendar
✓ Prorate Convention
✓ Capitalize the lines received from AP
Invoice
✓ Merge freight charges to the asset

Accounting Entry (Capitalized Asset) Accounting Entry (CIP Asset)

Asset Cost A/c 1000 Dr CIP Cost A/c 1000 Dr

To Asset Clearing A/c 1000 Cr To CIP Clearing A/c 1000 Cr

Accounting Entry (Expense Asset) Accounting Entry (CIP Asset Capitalization)

Cost Write Off A/c 1000 Dr Asset Cost A/c 1000 Dr

To Asset Clearing A/c 1000 Cr To CIP Cost A/c 1000 Cr

25
(3) Create Assets – Depreciation Methods
Depreciation Basis Rules

Depreciation Methods
Method Type Description
Calculated For straight-line depreciation, the depreciation program calculates the annual
depreciation rate by dividing the life (in years) into one. Numerous seeded
methods available out of the box

Flat-rate It depreciates the asset over time using a fixed rate. Either recoverable cost or the
recoverable net book value can be used for calculation

Table Assets gets the annual depreciation rate from a rate table

Formula based You can define specific formulas to derive annual depreciation rates for your
assets
Production Units of production estimates the depreciation based on the actual usage of the
item
26
(3) Create Assets – Calendar
Import Asset Setup

Define Fiscal Years

Define
Calendars
Prorate Depreciation
Calendar Calendar

Assign to Asset Books

What is the difference between Fiscal Year, Depreciation Calendar and Prorate Calendar?

• Fiscal year groups your accounting periods and calendars are based on fiscal years
• Depreciation Calendar: Determines the number of accounting periods in a fiscal year
• Prorate Calendar: Determines what rate is used to calculate annual depreciation by mapping each date to a prorate
period

27
 (3) Create Assets – Prorate Convention
Prorate Conventions

01
Jan

Date Placed in Service: 01-JAN-YYYY

Corporate Book Convention Prorate Date

Primary Ledger Following Month 01-FEB-YYYY

UK GAAP
Currency: GBP Tax Book
Month 01-JAN-YYYY

Half Year 01-JUL-YYYY

Secondary Ledger Tax Book Mid-Month 15-JAN-YYYY

US GAAP
Currency: USD
Daily 01-JAN-YYYY

28
(3) Create Assets – Determine Prorate Calendar

Prorate Conventions and Calendar

Convention Prorate Calendar

Month 12 Period Calendar

Mid-Month 24 Period Calendar

Daily 365 Period Calendar

Use the prorate calendar with the smallest period size or resolution you need
for determining your depreciation rate. For example, you may want to use a monthly
prorate calendar in a tax book that uses a quarterly depreciation – because you are using
monthly convention for some assets.

✓ Wonderful World of Prorate Convention and Calendar

29
 Transfer Asset Transfer
Create Adjust
Invoices to FA Fixed
Assets Assets
(4) Transfer Fixed Assets Dept Assets

Calculate Asset
Manage
Manage Tax Depreciation
Fixed Asset
Book and Period
Disposal
Close
• Transfer Assets
Transfer methods:
✓ Employee to employee ✓ Specific Asset Transfer
✓ Location to Location ✓ Mass Asset Transfer
✓ Change in depreciation Expense ✓ Spreadsheet Based Transfer
Account

• Unit Adjustment

Accounting Entry Accounting Entry

Destination Asset Cost A/c 1000 Dr Source Accumulated Depreciation A/c 200 Dr
To Source Asset Cost A/c 1000 Cr To Destination Accumulated Depreciation A/c 200 Cr

✓ Mass Asset Transfer

30
 Transfer Asset Transfer
Create Adjust
Invoices to FA Fixed
Assets Assets

(5) Adjust Assets

Dept Assets

Calculate Asset
Manage
Manage Tax Depreciation
Fixed Asset
Book and Period
Disposal
Close

• Change Financial Details

Adjustment methods:
• Transfer Source Lines ✓ Specific Asset Adjustment
• Change Category ✓ Mass Asset Adjustment
✓ Spreadsheet Based Adjustment
• Suspend / Resume
Depreciation

Accounting Entry (Change Category / Source Lines) Accounting Entry (Change Asset Cost)

Destination Asset Cost A/c 1000 Dr Asset Cost A/c 400 Dr

To Source Asset Cost A/c 1000 Cr To Asset Clearing A/c 400 Cr

Source Accumulated Depreciation A/c 200 Dr

To Destination Accumulated Depreciation A/c 200 Cr
✓ Suspend / Resume Dep
31
Asset Amortization

Cost 12,000 Original New

DPIS 1-Jan-20 Cost 12,000 12,000
Life 12 months Life (Months) 12 15
Monthly Dep 1,000 800
Change 1-Apr-20
Jan – Mar Dep 1,000 X 3 800 X 3 =
New Life 15 months = 3,000 2,400
Prorate Monthly Diff Dep -600
NBV on change 9,000
Remaining Life 12
Expensed Amortized Monthly Dep 9,000 / 12 = 750
Jan 1,000 1,000
Feb 1,000 1,000
Mar 1,000 1,000
Apr 800 – 600 = 750
200
May onwards 800 750
32
 Transfer Asset Transfer
Create Adjust
Invoices to FA Fixed
(6) Manage Tax Books Dept
Assets
Assets
Assets

Calculate Asset
Manage
Manage Tax Depreciation
Fixed Asset
Book and Period
Disposal
Close

33
Mass Copy

Initial Mass Copy Periodic Mass Copy

❑ Ran for the first time to copy assets
❑ Ran for each period

❑ Copies following
❑ Copies following
➢ Cost
➢ Additions
➢ Original Cost
➢ Adjustments
➢ Units
➢ Retirements
➢ Date Placed In Service
➢ Reinstatements
➢ Salvage value, if enabled

❑ Do not copy ❑ Do not copy

➢ Depreciation information (defaulted from asset ➢ Depreciation information (defaulted from asset
category) category)

➢ Retired before the end of the year

➢ Added after the end of the year
➢ Reclassification

34
Tax Book Direct Asset Creation

Corp Book Tax Book ✓ Available from 21B

Addition Addition UI
Spreadsheet

Prerequisite
Add the tax book in the lookup
“ORA_FA_ALLOW_TAX_DIRECT_ADD”

Asset Addition
FBDI

Reference

35
 Transfer Asset Transfer
Create Adjust
Invoices to FA Fixed

(7) Manage Fixed Asset Disposal

Assets Assets
Dept Assets

Calculate Asset
Manage
Manage Tax Depreciation
Fixed Asset
Book and Period
Disposal
Close
• Unit Retirement Retirement methods:
• Cost Retirement ✓ Specific Asset Retirement
✓ Mass Asset Retirement
• Source Line Retirement
✓ Spreadsheet Based Retirement

Accounting Entry (Asset Retirement) Accounting Entry (Receivables for Sale)

Accumulated Depreciation A/c 2500 Dr Bank A/c 2000 Dr

Proceeds of Sales Clearing A/c 2000 Dr To Proceeds of Sales Clearing A/c 2000 Cr
Cost of Removal Gain A/c 500 Dr
Net Book Value Retired Gain A/c 1500 Dr
To Asset Cost A/c 4000 Cr Accounting Entry (Payable for Cost of Removal)
To Proceeds of Sale Gain A/c 2000 Cr
To Cost of Removal Clearing A/c 500 Cr Cost of Removal Clearing A/c 500 Dr
To Bank A/c 500 Cr

36
 (8) Calculate Asset Depreciation and Period Close
Transfer Asset Transfer
Create Adjust
Invoices to FA Fixed
Assets Assets
Dept Assets

• Run Depreciation Calculate Asset

Manage
Manage Tax Depreciation
Fixed Asset
Book and Period
Disposal
Close
• Run Depreciation with Close Period

• Run separately for corporate and tax book

Best Practice - Run Depreciation for multiple times within a current open period, in order to improve the efficiency of the
depreciation run
Enable parallel processing with the profile option FA_NUM_PARALLEL_REQUESTS. Reference

Accounting Entry

Depreciation A/c 400 Dr

To Accumulated Depreciation A/c 400 Cr

37
 Period Close and Reports

Period Close Activities

• Complete All In-Progress Transactions • Close Payables before closing Fixed Assets to ensure
• Complete All Transactions for the Period Being Closed invoices are completed and capital invoice line
• Calculate Lease Interest and Expense
distributions are transferred from Payables to Fixed
• Submit Depreciation
Assets. If creating leases in Fixed Assets, all leasing
• Create Deferred Depreciation Journal Entries (Optional)
• Create Accounting invoices must be interfaced to Payables and paid before
• Review Subledger Period Close Exception Report closing Payables.
• Project Depreciation using What-If Depreciation
• Transfer all relevant Project costs to Fixed Assets before
(Optional)
• Generate and Transfer Lease Payment Invoices closing Fixed Assets
(Optional, applicable only if using Leased Assets)
• Review and Post Journal Entries
• Reconcile Fixed Assets Balances to the General Ledger • List of seeded Asset Reports

White Paper

38
Agenda

• Expense Concept

• Process Flow Demo

• Additional Features
Additional Features – Asset Impairment

Impairment of Assets is intended to ensure that assets are carried at no more than their
recoverable amount. An asset is impaired when it’s carrying amount exceeds its recoverable
amount (the greater of its net selling price & its value in use). These elements are defined as:

• Recoverable amount: Is the higher of an asset's Net Selling Price and its Value in Use.

• Net Selling Price (NSP): The amount obtainable from the sale of an asset in a bargained
transaction between knowledgeable, willing parties less the costs of disposal

• Value in use (VIU): Is the present value of estimated future cash flows expected to arise from
the continuing use of an asset, and from its disposal at the end of its useful life

40
Additional Features – Asset Impairment

$20000

Impairment Loss
$5000
$3000 (Cost – Depreciation Reserve) –
Max(Value in Use, Fair Value /
Net Selling Price)
$12000

$9000
$15000

41
Additional Features – Asset Impairment

Particulars Asset 1 Asset 2 Asset 3 CGU

Cost 10,000 10,000 20,000 40,000

Accumulated Depreciation (5,000) (5,000) (10,000) (20,000)

Net Book Value 5,000 5,000 10,000 20,000

Recoverable Cost (10,000)

Impairment Loss 10,000

Impairment Loss Allocation (2,500) (2,500) (5,000) (10,000)

NBV after Impairment Loss 2,500 2,500 5,000

Asset 1 and 2 Asset 3

Impairment Expense Account Dr. 2,500 Impairment Expense Account Dr. 5,000
To Accumulated Impairment Account 2,500 To Accumulated Impairment Account 5,000

42
Additional Features – Asset Impairment

Particulars Asset

Cost 10,000 Impairment Loss on Revalued Asset

Revaluation Reserve Account Dr. 1,000

Accumulated Depreciation (5,000) To Accumulated Impairment Account 1,000

Net Book Value 5,000

Recoverable Cost (2,000)
Impairment Loss expensed
Impairment Loss Recognized 3,000 Impairment Expense Account Dr. 2,000
To Accumulated Impairment Account 2,000
Revaluation Reserve (1,000)

Impairment Loss Expensed 2,000

✓ Asset Impairment Whitepaper

43
Asset Impairment vs Revaluation

U.S. GAAP IFRS

Revaluation Prohibited Allowed / Create Revaluation

Surplus
Depreciation after N/A Allowed
Revaluation
Impairment Direct Write Down Write Down to Revaluation
Surplus First, then Direct Write
Down

✓ Enabling Revaluation

✓ Performing Asset Revaluation

44
Additional Features – Asset Lease
✓ Asset Leasing Whitepaper

✓ Oracle Leasing Accounting

Manage Your Leases over the entire Lease Term

Capture Generate Calculate Calculate Generate Generate

Lease Amortization Lease Depreciation Accounting Lease
Basics Schedule Interest Invoices

• Lease Term, • Calculate Net • Calculate • Flexible • Accounting as • Generate

Classification Present Value Lease depreciation per FASB Topic lease
Right of use, Interest for engine 842 and IFRS 16 payment
• Payment Lease Liability Finance invoices
Schedule, Lease • Numerous • Coverage for
Discount Rate • Amortization depreciation events such as • Transfer
schedule over • Calculate methods reassessments, them to
• Lease asset the lease term Lease and prorate terminations, payables for
details Expense for conventions reclassification, final
Operating transfers payment
Lease
45
Implementation Considerations ✓ Asset Implementation Considerations

Category Setup Payables to Assets

1. Only one category structure is supported. It must be used for all
asset books.
2. Carefully decide how many segments your category structure
needs based on present and future business requirements.
3. Depreciation rules and accounts are tied to the category.
4. Depreciation rules should be defined with care for each category,
since they will be automatically defaulted to assets.
5. Assign the accounts carefully to the asset category as they cannot
be changed once it is in use.
1. Payables Business Unit and Asset Book
are related through the ledger.
2. Multiple Payables Business Units tied to
the same ledger can interface to a single
corporate book or multiple corporate
books.
3. Create Items in Item Master with default
asset category and category’s Clearing
Account as charge Account.

6. Carefully decide the clearing accounts for the categories. Only

Payables invoices distributed to these clearing accounts will be
transferred to Assets.

46
Implementation Considerations

Corporate Books & Ledgers Tax Books & Ledgers

1. It is possible to define more than one Corporate Book for each
Primary Ledger. 1. Multiple depreciation and accounting
representations available for assets using
2. Usually, one corporate book is defined for a primary ledger to the Tax Book.
record and track assets across multiple companies that are
modeled as balancing segment values for the ledger. 2. Multiple Tax Books can be associated to
a Corporate Book.
3. Data security in Assets is by Asset Book. Define multiple corporate
books associated to a primary ledger to secure assets by 3. Tax Book can be mapped to the
company/BSV. corporate book’s primary ledger or its
secondary ledger.
4. Reference Data Set allows sharing of setup data across books or to
restrict by book. 4. Accounting entries may be optionally
posted to GL.
5. Fusion Assets does not allow asset transfers across Books. This
restriction should be carefully considered while designing the
Book/ BSV Structure.

47
Implementation Considerations

General Recommendations System Controls

1. Asset Key setup is required even though it is not mandatory
information to be captured during entry.
2. If there is no requirement for asset key flexfield, define a “one
segment flexfield” without any validation and with a default value.
3. Fiscal years should be defined from the oldest Date Placed in
Service through the current fiscal year
4. All calendar periods have to be set up from the period
corresponding to the oldest date placed in service to the last day of
current fiscal year.
5. At least one period has to be setup after the current period. This is
necessary to close the current period.
1. It is mandatory to setup the category,
location and asset key flexfields prior to
defining the system controls.
2. Automatic numbering of assets begins
with the starting number mentioned in
system controls, hence care should be
taken prior to confirming the starting
number.
3. Enterprise name is displayed on all
reports hence care should be taken to
enter the appropriate name.

6. The state segment of the location key flexfield facilitates property

tax reporting

48
 Best Practice

✓ Customer Connect: Assets Enterprise Structures Key Consideration and Best Practice

✓ Topical Essays

✓ Financial Information Center (Doc ID 104.2)

✓ Complying with Country Requirements using Financials Cloud

49
Recent New Features
• Asset Operations from ERP Integration Rest Services (22B)
• Prevent users from updating Asset Numbers (22D)
• FBDI for Mass Revaluation of Assets (23B)
• Inventory Destination Receipts to Fixed Assets (23C)
• Capitalization Threshold in Foreign Currency (23D)
• Segregation of Asset Transaction and Transaction Posting Duties (23D)
✓ Replay: What’s New in Cloud ERP Financials 23D
✓ For a complete list of update-wise new features, visit Oracle Cloud Readiness

✓ Feature Opt-in Matrix

✓ Enable Offerings for Oracle Applications Cloud Release 13 Upgrade (Doc ID 2317112.1)

✓ Cloud Applications Roadmap

50
Reference Documents

• Defining and Using Impairments in Fusion Assets

• White Paper: Asset Capitalization Threshold
• How to Calculate India Tax Depreciation?
• Group Depreciation in Oracle Assets White Paper
• Implementing Assets
• Asset Data Conversion Suggestions
• Setup of Oracle Fusion Assets
• Subledger Accounting Setup for Oracle Fusion Assets
• Transaction Account Builder (TAB) - Enhanced Mass Additions Expense Account Defaulting in Assets
• Bonus Depreciation
• Depreciation Ceiling

51
Thank You

52 Copyright © 2023, Oracle and/or its affiliates | Confidential: Restricted

 Appendix A | Depreciation Computation ✓ Depreciation Calculation Example

Asset Book Divide Dep Evenly By Days

Asset 1 Asset 2 Asset 3 Asset 4 Asset 5 Asset 6 Asset 7 Asset 8
Asset Cost 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Life of the Asset (yrs.) 4 4 4 4 4 4 4 4
Depreciation Method SLM SLM SLM SLM SLM SLM SLM SLM

Date placed in Service 11-Aug-21 11-Aug-21 11-Aug-21 11-Aug-21 11-Aug-21 11-Aug-21 11-Aug-21 11-Aug-21
Prorate Calendar Monthly Monthly Daily Daily Monthly Monthly Daily Daily

Prorate Convention Daily Mid Month Daily Mid Month Daily Mid Month Daily Mid Month
Prorate Date 11-Aug-21 1-Aug-21 11-Aug-21 1-Aug-21 11-Aug-21 1-Aug-21 11-Aug-21 1-Aug-21
Yearly Depreciation 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Number of periods 12 12 12 12 365 365 365 365
Depreciation per Period 208.33 208.33 208.33 208.33 6.85 6.85 6.85 6.85
Depreciation in Aug 208.33 208.33 146.12 214.61 212.33 212.33 143.84 212.33
Depreciation in Sep 208.33 208.33 208.33 208.33 205.48 205.48 205.48 205.48

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 Appendix B | Asset Lookups

• ORA_FA_ALLOW_CAP_THRESHOLD - Specifies the asset books for which the capitalization threshold
feature is allowed.
• ORA_FA_ALLOW_REVAL – Specifies the asset books for which revaluation is allowed
• ORA_FA_ALLOW_TAX_DIRECT_ADD - Specifies the tax books in which direct asset addition is allowed
• ORA_FA_ALLOW_GROUP - Specifies the asset books for which the group asset feature is allowed.
• ORA_FA_ALLOW_LEASE - Specifies the asset books for which the leases feature is allowed
• ORA_FA_MASSADD_MAP_EXP_BASE - Specifies from what source all base segments of the depreciation
expense account should be derived.
• ORA_FA_MASSADD_MAP_EXP_BSV - Specifies from what source the balancing segment of the
depreciation expense account should be derived.
• ORA_FA_MASSADD_MAP_EXP_ACCT - Specifies from what source the natural account segment of the
depreciation expense account should be derived
• ORA_FA_MASSADD_MAP_EXP_CC - Specifies from what source the cost center segment of the
depreciation expense account should be derived
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