Fixed assets is a standalone application that manages asset information at the SOB/PL level. Key elements include asset categories, books, and calendars. Mass additions transfer asset data from accounts payable to fixed assets interface tables. Depreciation is calculated using straight line, diminishing value, or production-based methods. Asset information can be transferred between books, locations, and accounts. Physical inventories verify fixed asset information against physical assets.

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Introduction:
• Fixed Assets is a standalone application.
• This will come at SOB/PL level.
• Key Flex Fields in Fixed Assets:
1. Category KFF
2. Asset Location KFF
3. Asset Key KFF
• We can create only one structure by using the above KFF
• Based on the asset life we have to create Fiscal Calendar. For example
1976 to 2030.
• Depreciation calendar is used to calculate depreciation.
• Prorate convention calendar is used to prorate the depreciation from
which date to which date we have to consider.
• Mass additions: Process of transferring fixed assets related data from
Accounts Payables to Fixed Assets is called Mass additions. After
transferring data from AP, data will store in interface tables.
AP --à FA Mass additions interface tables ----à FA
The data which is there in “FA Mass additions interface tables” we can
see from FA application.
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If you want to convert the invoices information to Assets, we can add
necessary data at interface tables, then the data will store in FA base
tables.
• For Quick addition of Assets, only basic information is required.
• For detailed additions: list of information is required like: Asset
category, Asset name, cost of asset and depreciation of Asset.
Difference between: Detailed addition and Quick addition:
• As mentioned above for Detailed additions we have to navigate
several windows to enter an asset.
(Additions, Book and Assignments)
• Whereas through quick addition button asset information will be
maintained by navigating single window only. Latter detailed
information would be updated.
• Depreciation calculation is in 3 methods:
1. Straight line method
2. Diminitioning method
3. Production based
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• Straight line method: We will set a fixed amount for a fixed period as
depreciation. For example: Asset cost 1 Lac, asset life 5 years, so
depreciation per year 1 Lac / 5 = 20000
• Diminition method: depreciation will be calculated on written down
value of asset.
For example:
Year 1 Asset value 500000
Depreciation 10% 50000
Balance 450000
Year 2 Depreciation 10% 45000
Balance 405000
Year 3 Depreciation 10% 40500
Balance 355000
• Production base: Depreciation will be calculated on the production
units
• Asset transfer can be done between Locations, Employees, and
Accounts.
• Asset Changes: through this changes we can change the:
− Depreciation
− Prorate Convention
− Cost Adjustment
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− Life time of Assets
• Asset reclassification is used to reclassify the assets from one category
to another category.
• Projection: Through the projections we can have an idea of the future
depreciation. We can see the depreciation of a asset for the future
period also.
• What if analysis: with what-if analysis we can analyze the
differences between two different depreciation methods.
• Over ride depreciation: Example: A plant is running in 2 shifts in
a month producing 2000 units. If one month they used the plant per
day 3 shifts then the production is 3000 units. As per the regular
calculation system will consider depreciation only for 2000 units.
But if you want to consider depreciation for 3000 units we have to over
ride the depreciation. Over ride the depreciation where there is
unplanned activity takes place. System will consider first over ride
depreciation and then original depreciation.
• Retirement: For every asset there will be a useful life of period. Once
this period completed every asset should be retired. Some other
reasons for retirement: Sale of Asset, Theft, Life of asset and Damage
of asset.
• Roll back depreciation: If we run the depreciation without period
close, then we cannot make any modifications. Then if we want to do
any modifications we have to do “Roll back depreciation”.
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• Calendars: FA – depreciation calendar & GL – Accounting Calendar.
While transferring the information from FA to GL, the period name
should be same in the both calendars; otherwise data cannot be
transferred.
• Types of Books:
• For Assets, Journals will be created based on the asset book.
• This Asset book will be associated with the particular Ledger.
• Asset book will determine the:
- Calendar
- Accounting Rules
- Natural Accounts
- Ledger for various Fixed Assets.
Pre requisites to create Asset Book:
− Specify System Controls
− Define Calendars
− Set up your Account segment values and combinations
− Set up your journal entry formats.
In Fixed Assets we have 3 types of books:
1. Corporate Book
2. Tax Book
3. Budget Book
Corporate Book:
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• This is also called Depreciation book, Asset book and Asset Register.
• Corporate book is used to maintain the Asset information and to
maintain Depreciation information.
• Depreciation information will be maintained by following The
Companies Act.
Tax Book:
• We will maintain the depreciation information by following the Income
tax Act.
• We will copy the Asset information from the corporate book to Tax
book.
• We maintain companies Act and IT Act for depreciation, if the % of
depreciation is different for companies act and IT act.
Budget book:
• We will maintain capital Budget information.
• The Asset information also required in the tax book.
• It is an automatic activity
• We will copy the asset information from the corporate book to the tax
book.
• We have 2 options to copy the information:
1. Initial mass copy
2. Periodic mass copy
• Type of Assets:
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Assets are again 3 types as per Fixed Assets
1. Capitalized
2. CIP
3. Group Assets
Capitalized: Which Asset is started for using and Assets placed for service.
CIP: Construction in process: An asset which is under construction, for
example building under construction. CIP asset will changed to capitalized
when it starts service.
Group Assets: Grouping the assets related to same group.
• Accumulated Depreciation: Total depreciation from beginning of the
asset to till date.
• YTD depreciation: For particular year
• Depreciation: For particular period.
• Physical Inventory: Process of verification assets information in the
Oracle system with the Physical assets.
• Split: Split is dividing the Assets into individual units of assets.
Example:
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We purchased 5 plants at a time for Rs 5 Lakhs. We received only one
invoice for all the plants. We enter this invoice through Accounts
payables. Now we are sending this information to FA through Mass
Additions. Now we want that 5 plants information differently. So we
will split that into 5 plants.
• Merge: Merge is a process of adding multiple assets to a single Asset.
Example:
We have one asset like Computer.
Now we are purchasing first monitor and then CPU.
Now we are having 2 invoices I AP.
Now this will be transfer to FA through Mass addition.
These two invoices should be merged because they are single Asset.
Depreciation Calendar (Asset Calendar)
• You can set up as many calendars as you need.
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• Each book you set up requires a depreciation calendar and a prorate
calendar.
• The depreciation calendar determines the number of accounting
periods in a fiscal year.
• The prorate calendar determines the number of prorate periods in your
fiscal year.
• You can use one calendar for multiple depreciation books and as both
the depreciation and prorate calendar for a book.
• Period name as per Accounting Calendar in GL should be same as in
the FA otherwise we cannot transfer information from FA to GL.
Specifying the dates for Calendar periods
• Your corporate books can share the same calendar.
• A tax book can have a different calendar than its associated corporate
book.
• The depreciation program uses the prorate calendar to determine the
prorate period which is used to choose the depreciation rate.
• You must initially set up all calendar periods from the period
corresponding to the oldest date placed in service to the current
period.
• You must set up at least one period before the current period. At the
end of each fiscal year, Oracle Assets automatically sets up the periods
for the next fiscal year.
PRORATE CONVENTION CALENDAR
Navigation:
Setup à Asset system à Prorate Conventions
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• Prorate convention Calendar is used to determine the depreciation
starting date for asset in first year.
• Divide the year in to 2 parts and enter from date to dates and enter
each period beginning date as prorated date. (Below 180 days & Above
180 days).
• If you enable “Depreciate when place in service” system will not
consider the dates mentioned in Prorated Calendar.
Define Asset Book – Corporate
Setup à Asset System à Book Controls
This window has 3 Tabs:
1. Calendar
2. Accounting Rules
3. Natural Accounts
• Enter the name of the book you want to define.
• Choose Class as “Corporate”
Complete 3 Tabs
ASSET CATEGORIES
Setup à Asset System à Asset Categories
• Asset Category is used to group the Assets based on the Depreciation
method and Rate, and also building a relationship with the Asset book.
• Category information is common for a group of assets.
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• Oracle Assets defaults these depreciation rules when you add an asset,
to help you add assets quickly.
• The default depreciation rules that you set up for a category also
depend upon the date placed in service ranges you specify.
Pre requisites to set up Asset categories:
• Set up Category Flex Field
• Set up depreciation Book
• Setup Depreciation Calendar & Prorate Convention Calendar
• Setup Depreciation Methods
Category Types: 3
1. Lease
2. Non Lease
3. Lease holds Improvements
Owner ship is 2 types: i) Owned ii) Leased
Property Types: 6
1. Personal
2. Residential
3. Real
4. Intangible
5. Property
6. Other
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Step: 1
Define Asset Category
Navigation: Setup à Asset System à Asset Categories
Step: 2 Choose appropriate General ledger Accounts
Step: 3 Setup default rules
• Choose Depreciation Method & Rate
• Choose Prorate Convention Calendar & Retirement Convention
Calendar
Save
IMPORTANT REPORTS IN FIXED ASSETS
1. Asset Additions by cost center report
2. Asset transfers report
3. Asset retirement report
4. Asset retirement by cost center report
5. Property Tax report
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6. Transaction history report
7. Mass additions posting report
8. Delete mass additions posting report
9. Delete mass additions preview report
10. Asset reclassification report
11. Asset by category report
12. Mass additions validity report
13. Cost adjustment report
14. CIP Asset report
15. CIP capitalization report
16. Unplanned depreciation
Fixed Asset period closing procedures
1. Create all transactions (mass additions, retirements etc) before
running the Depreciation Program. Check for the Mass Additions
with the Status of “NEW”.
2. Before running the depreciation, Project the depreciation by
running the Projections. Select the projection calendar, number of
periods, Starting period, the corporate book and click on the ‘Run’
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button. Total Depreciation for the period will be shown as the
output in the concurrent request output.
3. Run the depreciation program without closing the period.
4. Module: Fixed Assets.
5. Navigation: Depreciation  Depreciation. Select the corporate
book and the period. Do Not Check the Check Box‘ Close
Period ’
6. Verify The Journal Entry Reserve Report for the calculation of
Depreciation and whether depreciation is calculated for all the
assets. After checking the results go to next step.
7. Now run the Depreciation program with the check box ‘Close
Period’ Checked.
8. Transfer information from fixed assets to General Ledger.
(Module: Fixed Assets. Navigation: Submit RequestCreate
Journal Entries in Fixed Asset. Choose the Corporate Book and
period for parameters as shown below.
9. This process creates the Journal Entries Automatically in the
General Ledger. Journal import from general Ledger need not be
run both for Primary as well as Reporting Set of Books.
10. Verify the Unposted Entries in the journal Entry Screen.
11. Post the journal Entries.
2.1 Opening / Closing the Period in Fixed Assets:
1. If the Depreciation is run with the Check Box ‘Close Period’
Checked, the period will be closed and the next period will be opened
automatically.
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Note: In Fixed Assets, once a period is closed, it cannot be
reopened.
CASH MANAGEMENT THEORY
Introduction
• Oracle Cash Management is an enterprise wide solution for managing
liquidity and controlling cash.
• Cash Management gives you direct access to expected cash flows from
your operational systems.
• You can quickly analyze enterprise wide cash management cash
requirements and currency exposures, ensuring liquidity and optimal
use of cash resources.
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Benefits of Cash Management
• Forecast cash flows in any currency and in multiple time periods
• Streamline the reconciliation process
• Monitor for exceptions and fraud
• Forecast based on historical or future transactions
• Manage the cash cycle efficiently and with control
Cash Management Integration
• Cash Management is integrated with Payables, Receivables and
General Ledger.
• Payables: Payments information automatically transfers to CM without
any process.
• Receivables: to transfer Receipts information to CM remittance process
is required.
• From AR only remitted eligibility transactions will transfer to CM.
• GL: If we have entered any journal in GL with cash account, that data
will flow to CM.
• Cash Management is used mainly for 2 purposes
1. Reconciliation
2. Forecasting
• Forecasting is used to identify the future cash inflows and outflows of
an Organization.
Reconciliation:
• Normally at the end of every period, the entries in the cash book are
compared with entries in the pass book.
• The exact causes of differences are scrutinized and then bank
reconciliation statement is prepared.
• Necessary suitable entries will passed in the cash book.
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Reconciliation process is 3 types:
1. Manual Clearing Process
2. Manual Reconciliation
3. Automatic Reconciliation
Manual Clearing Process:
In this process we will manually clear the transactions without entering
the bank statement into Oracle.
Manual Reconciliation:
In this process we will manually enter the bank statement into Oracle. We
will take the transactions one by one and search for the bank transactions
manually and mark the transactions as reconciled.
Automatic Reconciliation Process
Automatic Reconciliation process can be done in 2 ways:
• We will enter bank statement into Oracle and run a program, so that
system will search the transactions and will reconcile automatically.
• In another way, in the case where bank statement transactions are
more and not possible to enter manually into oracle, in that case, we
will upload the bank statement into Oracle through specific formats:
BAI 2 & SWIFT 940
• These formats are used to upload bank statements into Oracle.
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• Once we received bank statements in the above formats from the
bank, we will place these files in a directory where cash management
application is stored.
• We have to run “Bank statement load” program.
• We have to define Bank codes for transaction identification purpose.
Cash Management period closing procedures
Ensure the following before closing the Payables & Receivables.
• Any reconciliation transactions created by Cash Management are properly
entered.
• Account balances are updated.
• Reports include accurate information.
Specifically the following steps are recommended.
1. Reconcile all your bank statements.
2. Transfer all transactions from Payables to your General Ledger interface
tables.
3. Run Journal Import in General Ledger.
4. Post journals in General Ledger.
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5. Run the GL Reconciliation Report from Cash Management for each bank
account. This report compares the statement balance you specify to the General
Ledger ending balances.
6. Review the report for errors.
7. If there are errors in the report, correct them in Cash Management, as
needed. Repeat the above steps until there are no more errors.
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