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Assets Accounting

This document provides an overview of the asset accounting cycle and accounting entries in Oracle Fusion Asset Management. It discusses asset addition, changes, adjustments, transfers, revaluation, retirement, and depreciation with examples of corresponding journal entries.

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Vinoth Kumar K
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8 views5 pages

Assets Accounting

This document provides an overview of the asset accounting cycle and accounting entries in Oracle Fusion Asset Management. It discusses asset addition, changes, adjustments, transfers, revaluation, retirement, and depreciation with examples of corresponding journal entries.

Uploaded by

Vinoth Kumar K
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Home My Network Jobs Messaging Notifications Me For Business

Understanding of
Oracle Fusion Asset
Accounting cycle with
accounting entries
SYED KAREEM
looking for job chenge Oracle fusion 16 articles Following
finance functional consultant in UAE

December 5, 2023

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ASSET Management

Imagine you run a small business and decide to purchase a


delivery truck. Here's a simplified explanation of various
asset-related transactions using Oracle Fusion Asset
processes:

Asset Addition

When you buy the Asset, you perform an asset addition. In


Oracle Assets, this involves recording the Asset. process of
adding a Fixed Asset, either through detailed, quick, or
mass addition, is referred to as asset addition.

Accounting Impact in Oracle Assets during Asset addition:

Dr. Asset Cost

Cr. Asset Clearing Account

The cost goes into the Debit account, and the Asset
Clearing Account helps reconcile transactions between
what you owe (Payables) and the actual assets.

The Asset Clearing Account is utilized to reconcile


transactions between Oracle Payables and Oracle Assets.
When an asset is added through detailed or quick
additions, the credit is allocated to the asset clearing
account.

Accounting Impact on Mass addition process:

Dr. Asset Cost


Cr. Asset Clearing Account

In Accounts payable:

Dr. Asset Clearing Account

Cr. Accounts Payables

Asset Changes

Changes denote alterations in Asset Cost or Depreciation


method or Depreciation rate for one or more assets. Oracle
Assets incorporates the new cost or depreciation method or
rate from the period of change to calculate the
depreciation amount. Additionally, it recalculates the
depreciation that should have been calculated thus far,
compares it with the actual depreciation, and makes an
adjusting entry.

If the transaction results in an addition to the cost of the


asset, then the journal entry created is:

Dr. Asset Cost

Cr. Asset Clearing

Asset Adjustment:

An adjusting entry should be incorporated to account for


depreciation based on the new cost of the asset. Due to
changes in method or rate, the new depreciation calculated
may be lower or greater than the depreciation calculated
thus far.

If the recalculated accumulated depreciation is lower than


the accumulated depreciation calculated until now:

Dr. Accumulated Depreciation

Cr. Depreciation Expense (Adjustment)

Asset Transfer :

Transfers involve changes in Location, expense account, and


employee assignment. If there is a change in the expense
account, for example, if an asset is transferred from
department 001 to department 002, the journal entry for
accounting the asset cost is:

Dr. Asset Cost (2)

Cr. Asset Cost (1)

Dr. Accumulated Depreciation (1)


Cr. Accumulated Depreciation (2)

Asset Revaluation

Revaluation is a process to reflect the current market price


of the Asset.

Revalue Accumulated Depreciation is enabled at the Book


Controls level:

The revaluation amount would be credited to Accumulated


Depreciation and Revaluation reserve in the same
proportion as the existing Accumulated Depreciation and
Net Book value.

Dr. Asset Cost

Cr. Accumulated Depreciation

Cr. Revaluation Reserve

Revalue Accumulated Depreciation is disabled at the Book


Controls level:

To the extent of the revaluation amount, the following


journal entry would be passed.

Dr. Asset Cost

Cr. Revaluation Reserve

Also, the existing depreciation reserve would be transferred


to the Revaluation Reserve.

Dr. Accumulated Depreciation

Cr. Revaluation Reserve

Oracle Assets passes the following journal entry for


retirement. If the retirement transaction resulted in a Gain,
the journal entry passed would be:

Dr. Accumulated Depreciation

Dr. Proceeds of sale

Cr. Asset Cost

Cr. Gain / Loss

If the retirement transaction resulted in a Loss, the journal


entry passed would be:

Dr. Accumulated Depreciation


Dr. Proceeds of sale

Dr. Gain / Loss

Cr. Asset Cost

Depreciation

Running depreciation (as applicable to a particular asset)


during the period end would pass a journal entry:

Dr. Depreciation Expense

Cr. Accumulated Depreciation

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