R12 Fixed Assets General Questions

R12 Fixed Assets General Questions
Eng. Baker Khader Abdallah, PMP, MBA
ERP Consultant
1. What are the different ways of adding assets in FA?
You can use one of the following processes to enter new assets:
Quick Additions
Use the Quick Additions process to quickly enter ordinary assets when you
must enter them manually. You can enter minimal information in the Quick
Additions window, and the remaining asset information defaults from the
asset category, book, and the date placed in service.
Detail Additions
Use the Detail Additions process to manually add complex assets which the
Quick Additions process does not handle:
 Assets that have a salvage value
 Assets with more than one assignment
 Assets with more than one source line
 Assets to which the category default depreciation rules do not apply
 Subcomponent assets
 Leased assets and leasehold improvements
Mass Additions
Use the Mass Additions process to add assets automatically from an external
source. Create assets from one or more invoice distribution lines in Oracle

Payables, CIP asset lines in Oracle Projects, asset information from another
assets system, or information from any other feeder system using the
interface. You must prepare the mass additions to become assets before you
post them to Oracle Assets.

2. How do we depreciate Assets in Oracle Applications?
Run the depreciation program independently for each of your depreciation
books. The depreciation program calculates depreciation expense and
adjustments, and updates the accumulated depreciation and year-to-date
depreciation.
To run depreciation:
1. Open the Run Depreciation window.
2. Choose the Book for which you want to run depreciation.
3. Choose Run to submit concurrent requests to run the calculate gains and
losses, depreciation, and reporting programs.
Attention: You cannot enter transactions for the book while depreciation is
running.
Oracle Assets automatically runs the Journal Entry Reserve Ledger report
when you run the depreciation program for a corporate book, and the Tax
Reserve Ledger report for a tax book, so you can review the depreciation
calculated.
4. Review the log files and report after the request completes.

3. What is the significance of asset books in FA? Types?
You can define corporate, tax, and budget depreciation books. You must set
up your depreciation books before you can add assets to them. You can set
up multiple corporate books that create journal entries for different ledger, or
to the same ledger. In either case, you must both run depreciation and
create journal entries for each depreciation book. For each corporate book,
you can set up multiple tax and budget books that are associated with it.
Prerequisites
 Specify system controls.
 Define your calendars.
 Set up your Account segment values and combinations.
 Set up your journal entry formats.
To define a depreciation book:
1. Open the Book Controls window.
2. Enter the name of the book you want to define. The book name cannot
contain any special characters.
Suggestion: The name you enter appears in List of Values windows
which allow no more than 15 spaces. You may want to limit the book
name to 15 characters.
3. Enter a brief, unique description of the book.
4. Choose a Corporate, Tax, or Budget book class.
5. Enter calendar information for your book.
6. Enter accounting rules for your book.
7. Enter natural accounts for your book.
8. Enter tax rules for your book.
9. Save your work.

4. What is meant by retire asset? How do we retire assets in
Oracle applications?
Retire an asset when it is no longer in service. For example, retire an asset
that was stolen, lost, or damaged, or that you sold or returned.
Full and Partial Retirements by Units or Cost
You can retire an entire asset or you can partially retire an asset.
 When you retire an asset by units, Oracle Assets automatically calculates
the fraction of the cost retired
 When you retire an asset by cost, the units remain unchanged and the
cost retired is spread evenly among all assignment lines
Restrictions
You cannot retire assets by units in your tax books; you can only perform
partial and full cost retirements in a tax book. Also, you can only perform full
retirements on CIP assets; you cannot retire them by units, or retire them
partially by cost.
If you perform multiple partial retirements on an asset within a period, you
must run the calculate gains and losses program between transactions.
Gain/Loss = Proceeds of Sale - Cost of Removal - Net Book Value
Retired + Revaluation Reserve Retired
If you partially retire a units of production asset, you must manually adjust
the capacity to reflect the portion retired.
Full Retirement for a Group of Assets (Mass Retirement)

Use the Mass Retirements window to retire a group of assets at one time.
You specify selection criteria, including asset category, asset key, location,
depreciation expense account segments, employee, asset number range, and
date placed in service range, to select the assets you want to retire. You can
also elect to automatically retire subcomponents along with the parent
asset.
When you define a mass retirement, you can choose to immediately submit
the concurrent request to retire the selected assets, or you can save the
mass retirement definition for future submission. You can change the details
of any mass retirement before you submit the concurrent request.
When you submit a mass retirement, Oracle Assets automatically runs the
Mass Retirements Report and the Mass Retirements Exception Report. You
can review these reports, perform a mass reinstatement, or adjust an
individual retirement transaction if necessary.
If you wish to simultaneously run this program in more than one process to
reduce processing time, Oracle Assets can be set up to run this program in
parallel. For more information on setting up parallel processing and the FA:
Number of Parallel Requests profile option.
Exceptions
Oracle Assets does not retire the following types of assets, even if they are
selected as part of a mass retirements transaction:
 Assets with transactions dated after the retirement date you enter
 Assets that are multiply distributed and one or more values do not meet
the mass retirement selection criteria
 For reinstatements, assets retired during a prior fiscal year
Independence Across Depreciation Books
You can retire an asset or a group of assets from any depreciation book
without affecting other books. To retire an asset from all books, retire it from

each book separately, or set up Mass Copy to copy retirements to the other
books in the Book Controls window.
Retirement and Reinstatement Statuses
Each retirement transaction has a status. A new retirement receives the
status PENDING. After you run depreciation or calculate gains and losses, the
status changes to PROCESSED.
When you reinstate a PENDING retirement, Oracle Assets deletes the
retirement transaction and the asset is immediately reinstated. If you
reinstate a PROCESSED retirement, Oracle Assets changes the status to
REINSTATE, and you must rerun the Calculate Gains and Losses program or
run depreciation to process the reinstatement.
When you perform a mass retirement, Oracle Assets creates PENDING
retirement transactions. If you submit a mass reinstatement before running
the Calculate Gains and Losses program, Oracle Assets immediately
reinstates these assets. If you submit a mass reinstatement to reinstate
PROCESSED retirements, you must rerun the Calculate Gains and Losses
program or run depreciation to process the reinstatements.
ITC Recapture
If you retire an asset for which you took an investment tax credit (ITC) and
the ITC recapture applies, Oracle Assets automatically calculates it.
Correct Retirement Errors
You can undo asset retirement transactions, and Oracle Assets creates all the
necessary journal entries for your general ledger to catch up any missed
depreciation expense. You can reinstate an individual or mass retirement
transaction. For multiple partial retirements, you can reinstate only most
recent or processed retirement. You cannot reinstate an asset retired in a
previous fiscal year. You can only reinstate assets retired in the current fiscal
year.

Retirement Conventions
Oracle Assets lets you use a different prorate convention when you retire an
asset than when you added it. The retirement convention in the Retirements
window and the Mass Retirements window defaults from the retirement
convention you set up in the Asset Categories window. You can change the
retirement convention for an individual asset in the Retirements window
before running the Calculate Gains and Losses program.
Per Diem Retirements
If you set up a book to divide depreciation by days and to use both a daily
prorate convention and a daily prorate calendar, and if you retire an asset in
that book in the current period, Oracle Assets takes depreciation expense for
the number of days up to, but not including, the date of retirement. If you
perform a prior period retirement, Oracle Assets backs out the depreciation
expense through the date of retirement. If you reinstate the asset, Oracle
Assets catches up depreciation expense through the end of the current
period.
Retirement Transactions
For prior-period retirement dates:
You can retire retroactively only in the current fiscal year, and only after the
most recent transaction date.
Proceeds of Sale and Cost of Removal
You can enter proceeds of sale and cost of removal amounts when you
perform a retirement or mass retirement. For a mass retirement, you enter
the total proceeds of sale and/or the total cost of removal amounts, and
Oracle Assets prorates the total amounts over the assets being retired
according to each asset's current cost.

Oracle Assets uses the following formula to prorate the proceeds of
sale amount across the assets you select:
Proceeds of Sale (per asset) = Current cost of asset/Total current
cost of all selected assets X Proceeds of Sale
Oracle Assets uses the following formula to prorate the cost of
removal amount across the assets you select:
Cost of removal (per asset) = Current cost of asset/Total current
cost of all selected assets X Cost of Removal

5. What are the various Journal Entries generated through
fixed assets?
Addition Journal
Current and Prior Period Addition
You purchase and place the asset into service in Year 1, Quarter 1.
Payables System
Account Description Debit Credit
Asset Clearing 4,000.00
Accounts Payable Liability 4,000.00
Oracle Assets - CURRENT PERIOD ADDITION
Asset Cost 4,000.00
Depreciation Expense 250.00
Accumulated Depreciation 250.00
You place an asset in service in Year 1, Quarter 1, but you do not enter it
into Oracle Assets until Year 2, Quarter 2. Your payables system creates the
same journal entries to asset clearing and accounts payable liability as for a

current period addition.
Oracle Assets - PRIOR PERIOD ADDITION
Asset Cost 4,000.00
Depreciation Expense (Adjustment) 1,250.00
Accumulated Depreciation 1,500.00
Merge Mass Additions
When you merge two mass additions, Oracle Assets adds the asset cost of
the mass addition that you are merging to the asset account of the mass
addition you are merging into. Oracle Assets records the merge when you
perform the transaction. Oracle Assets does not change the asset clearing
account journal entries it creates for each line, so each of the appropriate
clearing accounts clears separately.
As an audit trail after the merge, the original cost of the invoice line remains
on each line. When you create an asset from the merged line, the asset cost
is the total merged cost.
Oracle Assets creates journal entries for the asset cost account for the mass
addition into which the others were merged. Oracle Assets creates journal
entries for each asset clearing account. For example, you merge mass
addition #1 into mass addition #2, so Oracle Assets creates the following
journal entries:

Asset Cost (mass addition #2 asset cost account) 4,000.00
Depreciation Expense 1,500.00
Asset Clearing (mass addition #1 accounts payable
clearing account)
3,000.00
Asset Clearing (mass addition #2 accounts payable
clearing account)
1,000.00
Construction-In-Process (CIP) Addition
You add a CIP asset. (CIP assets do not depreciate) Oracle Assets
CIP Cost 4,000.00
CIP Clearing 4,000.00
Deleted Mass Additions
Oracle Assets creates no journal entries for deleted mass additions and does
not clear the asset clearing accounts credited by accounts payable. You clear
the accounts by either reversing the invoice in your payables system, or
creating manual journal entries in your general ledger.
Capitalization

When you capitalize CIP assets, Oracle Assets creates journal entries that
transfer the cost from the CIP cost account to the asset cost account. The
clearing account has already been cleared.
Asset Cost 4,000.00
CIP Cost 4,000.00
Asset Type Adjustments
If you change the asset type from capitalized to CIP, Oracle Assets creates
journal entries to debit the CIP cost account and credit the asset clearing
account. Oracle Assets does not create capitalization or reverse capitalization
journal entries for CIP reverse transactions.
Oracle Assets - CHANGE TYPE FROM CAPITALIZED TO CIP (CURRENT
PERIOD)
CIP Cost 4,000.00
Retirement Journals
Current Period Retirements

Example: You place an asset in service in Year 1, Quarter 1. The asset cost
is $4,000, the life is 4 years, and you are using straight-line depreciation. In
Year 3, Quarter 3, you sell the asset for $2,000. The cost to remove the
asset is $500. The asset uses a retirement convention and depreciation
method which take depreciation in the period of retirement. You retire
revaluation reserve in this book.
Accounts Receivable 2,000.00
Proceeds of Sales Clearing 2,000.00
Cost of Removal Clearing 500.00
Accounts Payable 500.00
Proceeds of Sale Clearing 2,000.00
Cost of Removal Gain 500.00
Revaluation Reserve 600.00
Net Book Value Retired Gain 1,500.00

Asset Cost 4,000.00
Proceeds of Sale Gain 2,000.00
Revaluation Reserve Retired Gain 600.00
If you enter the same account for each gain and loss account, Oracle Assets
creates a single journal entry for the net gain or loss as shown in the
following table:
Book Controls window:
Accounts Gain Loss
Proceeds of Sale 1000 1000
Cost of Removal 1000 1000
Net Book Value Retired 1000 1000
Revaluation Reserve Retired 1000 1000
Asset Cost 4,000.00

Gain/Loss 600.00
Prior Period Retirement
Year 3, Quarter 3, you discover that the asset was sold in Year 3, Quarter 1,
for $2,000. The removal cost was $500. The asset uses a retirement
convention and depreciation method which allow you to take depreciation in
the period of retirement.
Accounts Receivable 2,000.00
Accounts Payable 500.00

Cost of Removal Loss 500.00
Net Book Value Retired Loss 1,750.00
Proceeds of Sale Loss 2,000.00
Asset Cost 4,000.00
Current Period Reinstatement
Example: You discover that you retired the wrong asset. Oracle Assets
creates journal entries for the reinstatement to debit asset cost, credit
accumulated depreciation, and reverse the gain or loss you recognized for
the retirement. Oracle Assets reverses the journal entries for proceeds of
sale, cost of removal, net book value retired, and revaluation reserve retired.
Oracle Assets also reverses the journal entries you made to clear the
proceeds of sale and cost of removal.
Oracle Assets also creates journal entries to recover the depreciation not
charged to the asset and for the current period depreciation expense.
Asset Cost 4,000.00
Gain / Loss 600.00

Prior Period Reinstatement
Year 2, Quarter 1, you retire the asset. In Year 2, Quarter 4, you realize that
you retired the wrong asset so you reinstate it.
Asset Cost 4,000.00
Proceeds of Sale Loss 2,000.00
Depreciation Expense (adjustment) 500.00
Net Book Value Retired Loss 2,750.00
Cost of Removal Loss 500.00
Journal Entries for Depreciation:

When you run depreciation, Oracle Assets creates journal entries for your
accumulated depreciation accounts and your depreciation expense accounts.
Oracle Assets creates journal entries for your bonus reserve accounts and
your bonus depreciation accounts, if any. Oracle Assets creates separate
journal entries for current period depreciation expense and for adjustments
to depreciation expense for prior period transactions and changes to financial
information.
Oracle Assets creates the following journal entries for a current period
depreciation charge of $200 and a bonus charge of $50:
Bonus Expense 50.00
Bonus Reserve 50.00
Journal Entries for Revaluation:
The following examples illustrate the effect on your assets and your accounts
when you specify different revaluation rules.
Revalue Accumulated Depreciation
Example 1: You place an asset in service in Year 1, Quarter 1. The asset
cost is $10,000, the life is 5 years, and you are using straight-line
depreciation.
In Year 2, Quarter 1 you revalue the asset using a revaluation rate of 5%.
Then in Year 4, Quarter 1 you revalue the asset again using a revaluation

rate of -10%.
Revaluation Rules:
 Revalue Accumulated Depreciation = Yes
 Amortize Revaluation Reserve = No
 Retire Revaluation Reserve = No
Oracle Assets bases the new depreciation expense on the revalued remaining
net book value.
In Year 5, Quarter 4, at the end of the asset's life, you retire the asset with
no proceeds of sale or cost of removal.
The effects of the revaluations are illustrated in the following table:
Period (Yr,
Qtr.)
Asset
Cost
Deprn.
Expense
Accum.
Deprn.
Reval.
Reserve
Yr1,Q1 10,000.00 500.00 500.00 0.00
Yr1,Q2 10,000.00 500.00 1,000.00 0.00
Yr1,Q3 10,000.00 500.00 1,500.00 0.00
Yr1,Q4 10,000.00 500.00 2,000.00 0.00
Reval. 1 5% 10,500.00 0.00 *2,100.00 **400.00
Yr2,Q1 10,500.00 525.00 2,625.00 400.00
Yr2,Q2 10,500.00 525.00 3,150.00 400.00
Yr2,Q3 10,500.00 525.00 3,675.00 400.00
Yr2,Q4 10,500.00 525.00 4,200.00 400.00
Yr3,Q1 10,500.00 525.00 4,725.00 400.00

Yr3,Q2 10,500.00 525.00 5,250.00 400.00
Yr3,Q3 10,500.00 525.00 5,775.00 400.00
Yr3,Q4 10,500.00 525.00 6,300.00 400.00
Reval. 2 -10% 9,450.00 0.00 *5,670.00 **-20.00
Yr4,Q1 9,450.00 472.50 6,142.50 -20.00
Yr4,Q2 9,450.00 472.50 6,615.00 -20.00
Yr4,Q3 9,450.00 472.50 7,087.50 -20.00
Yr4,Q4 9,450.00 472.50 7,560.00 -20.00
Yr5,Q1 9,450.00 472.50 8,032.50 -20.00
Yr5,Q2 9,450.00 472.50 8,505.00 -20.00
Yr5,Q3 9,450.00 472.50 8,977.50 -20.00
Yr5,Q4 9,450.00 472.50 9,450.00 -20.00
Retire 0.00 0.00 0.00 -20.00
REVALUATION 1
Year 2, Quarter 1, 5% revaluation
*Accumulated Depreciation = Existing Accumulated Depreciation +
[Existing Accumulated Depreciation x (Revaluation Rate / 100)]

2,000 + [2,000 X (5/100)] = 2,100
**Revaluation Reserve = Existing Revaluation Reserve + Change in
Net Book Value
0 + (8,400 - 8,000) = 400
Asset Cost 500.00
REVALUATION 2
-10% revaluation in Year 4, Quarter 1:
Asset Cost 1,050.00
Retirement in Year 5, Quarter 4:

Asset Cost 9,450.00
Accumulated Depreciation Not Revalued
depreciation.
In Year 2, Quarter 1 you revalue the asset using a revaluation rate of 5%.
Then in Year 4, Quarter 1 you revalue the asset again using a revaluation
rate of -10%.
Revaluation Rules:
 Revalue Accumulated Depreciation = No
 Retire Revaluation Reserve = Yes
For the first revaluation, the asset's new revalued cost is $10,500. Since you
do not revalue the accumulated depreciation, Oracle Assets transfers the
balance to the revaluation reserve in addition to the change in cost.
Since you are also not amortizing the revaluation reserve, this amount
remains in the revaluation reserve account until you retire the asset, when
Oracle Assets transfers it to the appropriate revaluation reserve retired
account. Oracle Assets bases the new depreciation expense on the revalued
net book value.
For the second revaluation, the asset's revalued cost is $9,450. Again, since
you do not revalue the accumulated depreciation, Oracle Assets transfers the
balance to the revaluation reserve along with the change in cost.
You retire the asset in Year 5, Quarter 4, with no proceeds of sale or cost of
removal.
Period (Yr, Asset Deprn. Accum. Reval.

Qtr.) Cost Expense Deprn. Reserve
Yr1,Q1 10,000.00 500.00 500.00 0.00
Yr1,Q2 10,000.00 500.00 1,000.00 0.00
Yr1,Q3 10,000.00 500.00 1,500.00 0.00
Yr1,Q4 10,000.00 500.00 2,000.00 0.00
Reval. 1 5% 10,500.00 0.00 0.00 *2,500.00
Yr2,Q1 10,500.00 **656.25 6,56.25 2,500.00
Yr2,Q2 10,500.00 656.25 1,312.50 2,500.00
Yr2,Q3 10,500.00 656.25 1,968.75 2,500.00
Yr2,Q4 10,500.00 656.25 2,625.00 2,500.00
Yr3,Q1 10,500.00 656.25 3,281.25 2,500.00
Yr3,Q2 10,500.00 656.25 3,937.50 2,500.00
Yr3,Q3 10,500.00 656.25 4,593.75 2,500.00
Yr3,Q4 10,500.00 656.25 5,250.00 2,500.00
Reval. 2 -10% 9,450.00 0.00 0.00 *6,700.00
Yr4,Q1 9,450.00 **1,181.25 1,181.25 6,700.00
Yr4,Q2 9,450.00 1,181.25 2,362.50 6,700.00

Yr4,Q3 9,450.00 1,181.25 3,543.75 6,700.00
Yr4,Q4 9,450.00 1,181.25 4,725.00 6,700.00
Yr5,Q1 9,450.00 1,181.25 5,906.25 6,700.00
Yr5,Q2 9,450.00 1,181.25 7,087.50 6,700.00
Yr5,Q3 9,450.00 1,181.25 8,268.75 6,700.00
Yr5,Q4 9,450.00 1,181.25 9,450.00 6,700.00
REVALUATION 1
5% revaluation in Year 2, Quarter 1:
Asset Cost 500.00
Revaluation Reserve 2,500.00
REVALUATION 2
-10% revaluation in Year 4, Quarter 1:
Asset Cost 1,050.00

Retirement in Year 5, Quarter 4:
Revaluation Reserve Retired Gain 6,700.00
Asset Cost 9,450.00
Amortizing Revaluation Reserve
depreciation.
In Year 2, Quarter 1 you revalue the asset using a rate of 5%. Then in Year
4, Quarter 1 you revalue the asset again using a rate of -10%.
Revaluation Rules:
 Amortize Revaluation Reserve = Yes
For the first revaluation, the asset's new revalued cost is $10,500. Since you
do not revalue the accumulated depreciation, Oracle Assets transfers the
entire amount to the revaluation reserve. Since you are amortizing the
revaluation reserve, Oracle Assets calculates the revaluation amortization
amount for each period using the asset's depreciation method. Oracle Assets
also bases the new depreciation expense on the revalued net book value.
For the second revaluation, the asset's revalued cost is $9,450. Again, since

you do not revalue the accumulated depreciation, Oracle Assets transfers the
entire amount to the revaluation reserve.
Period
(Yr,Qtr.)
Asset
Cost
Deprn.
Expense
Accum.
Deprn.
Reval.
Amortize
Reval.
Reserve
Yr1,Q1 10,000.00 500.00 500.00 0.00 0.00
Yr1,Q2 10,000.00 500.00 1,000.00 0.00 0.00
Yr1,Q3 10,000.00 500.00 1,500.00 0.00 0.00
Yr1,Q4 10,000.00 500.00 2,000.00 0.00 0.00
Reval. 1
5%
10,500.00 0.00 0.00 0.00 *2,500.00
Yr2,Q1 10,500.00 **656.25 656.25 ***156.25 2,343.75
Yr2,Q2 10,500.00 656.25 1,312.50 156.25 2,187.50
Yr2,Q3 10,500.00 656.25 1,968.75 156.25 2,031.25
Yr2,Q4 10,500.00 656.25 2,625.00 156.25 1,875.00
Yr3,Q1 10,500.00 656.25 3,281.25 156.25 1,718.75
Yr3,Q2 10,500.00 656.25 3,937.50 156.25 1,562.50
Yr3,Q3 10,500.00 656.25 4,593.75 156.25 1,406.25
Yr3,Q4 10,500.00 656.25 5,250.00 156.25 1,250.00

Reval. 2 -
10%
9,450.00 0.00 0.00 0.00 *5,450.00
Yr4,Q1 9,450.00 **1,181.25 1,181.25 ***681.25 4,768.75
Yr4,Q2 9,450.00 1,181.25 2,362.50 681.25 4,087.50
Yr4,Q3 9,450.00 1,181.25 3,543.75 681.25 3,406.25
Yr4,Q4 9,450.00 1,181.25 4,725.00 681.25 2,725.00
Yr5,Q1 9,450.00 1,181.25 5,906.25 681.25 2,043.75
Yr5,Q2 9,450.00 1,181.25 7,087.50 681.25 1,362.50
Yr5,Q3 9,450.00 1,181.25 8,268.75 681.25 681.25
Yr5,Q4 9,450.00 1,181.25 9,450.00 681.25 0.00
REVALUATION 1
Year 2, quarter 1, 5% revaluation
Asset Cost 500.00
Oracle Assets creates the following journal entries each period to amortize
the revaluation reserve:

Revaluation Amortization 158.25
REVALUATION 2
Year 4, quarter 1, -10% revaluation
Asset Cost 1,050.00
Revaluation of a Fully Reserved Asset
depreciation. The asset's life extension factor is 2 and the maximum fully
reserved revaluations allowed for this book is 3.
In year 5, quarter 4 the asset is fully reserved. In Year 9, Quarter 1 you want

to revalue the asset with a revaluation rate of 5%.
Revaluation Rules:
First, Oracle Assets checks whether this fully reserved asset has been
previously revalued as fully reserved, and that the maximum number of
times is not exceeded by this revaluation. Since this asset has not been
previously revalued as fully reserved, this revaluation is allowed.
The asset's new revalued cost is $10,500. The life extension factor for this
asset is 2, so the asset's new life is 2 * 5 years = 10 years. Oracle Assets
calculates depreciation expense over its new life of 10 years. Oracle Assets
calculates the depreciation adjustment of $2,000 using the new 10-year
asset life. It transfers the change in net book value to the revaluation reserve
account.
Oracle Assets revalues the accumulated depreciation using the 5%
revaluation rate. The change in net book value is transferred to the
revaluation reserve account. Since you do not amortize the revaluation
reserve, the amount remains in the revaluation reserve account.
The effect of the revaluation is illustrated in the following table:
Period (Yr,
Qtr.)
Asset
Cost
Deprn.
Expense
Accum.
Deprn.
Reval.
Reserve
Yr1 to Yr4
Yr5,Q1 10,000.00 500.00 8,500.00 0.00
Yr5,Q2 10,000.00 500.00 9,000.00 0.00
Yr5,Q3 10,000.00 500.00 9,500.00 0.00
Yr5,Q4 10,000.00 500.00 10,000.00 0.00

Reval. 5% 10,500.00 0.00 *8,400.00 **2,100.00
Yr9,Q1 10,500.00 ***262.50 8,662.50 2,100.00
Yr9,Q2 10,500.00 262.50 8,925.00 2,100.00
Yr9,Q3 10,500.00 262.50 9,187.50 2,100.00
Yr9,Q4 10,500.00 262.50 9,450.00 2,100.00
Yr10,Q1 10,500.00 262.50 9,712.50 2,100.00
Yr10,Q2 10,500.00 262.50 9,975.00 2,100.00
Yr10,Q3 10,500.00 262.50 10,237.50 2,100.00
Yr10,Q4 10,500.00 262.50 10,500.00 2,100.00
Asset Cost 500.00
Revaluation with Life Extension Ceiling
depreciation. The asset's life extension factor is 3.0 and its life extension
ceiling is 2.

In Year 5, Quarter 4 the asset is fully reserved. In year 9, quarter 1 you want
to revalue the asset with a revaluation rate of 5%.
Revaluation Rules:
To determine the depreciation adjustment, Oracle Assets uses the smaller of
the life extension factor and the life extension ceiling. Since the life extension
ceiling is smaller than the life extension factor, Oracle Assets uses the ceiling
to calculate the depreciation adjustment. The new life used to calculate the
depreciation adjustment is 2 * 5 years = 10 years, the life extension ceiling
of 2 multiplied by the original 5 year life of the asset.
Oracle Assets calculates the asset's depreciation expense under the new life
of 10 years up to the revaluation period, and moves the difference between
this value and the existing accumulated depreciation from accumulated
depreciation to revaluation reserve.
Oracle Assets then determines the new asset cost using the revaluation rate
of 5% and revalues the accumulated depreciation with the same rate. Oracle
Assets calculates the asset's new life by multiplying the current life by the life
extension factor. The asset's new life is 3 * 5 years = 15 years. Oracle Assets
bases the new depreciation expense on the revalued net book value and the
new 15 year life.
Period (Yr,
Qtr.)
Asset
Cost
Deprn.
Expense
Accum.
Deprn.
Reval.
Reserve
Yr1 to Yr4
Yr5,Q1 10,000.00 500.00 8500.00 0.00
Yr5,Q2 10,000.00 500.00 9000.00 0.00

Yr5,Q3 10,000.00 500.00 9,500.00 0.00
Yr5,Q4 10,000.00 500.00 10,000.00 0.00
Reval. 5% 10,500.00 0.00 *8,400.00 **2,100.00
Yr9,Q1 10,500.00 ***75.00 8,475.00 2,100.00
Yr9,Q2 10,500.00 75.00 8,550.00 2,100.00
Yr9,Q3 10,500.00 75.00 8,625.00 2,100.00
Yr9,Q4 10,500.00 75.00 8,700.00 2,100.00
Yr10 to Yr15
Depreciation Adjustment (calculated using life extension ceiling)= 2,000
Asset Cost 500.00
Revaluation with a Revaluation Ceiling
Example 6: You own an asset which has been damaged during its life. You
placed the asset in service in Year 1, quarter 1. The asset cost is $10,000,
the life is 5 years, and you are using straight-line depreciation. You entered a
revaluation ceiling of $10,300 for the asset.
In year 3, quarter 3 you revalue the asset's category with a revaluation rate

of 5%.
Revaluation Rules:
 Amortize Revaluation Reserve = Yes
If Oracle Assets applied the new revaluation rate of 5%, the asset's new cost
would be higher than the revaluation ceiling for this asset, so instead Oracle
Assets uses the ceiling as the new cost. The ceiling creates the same effect
as revaluing the asset at a rate of 3%. Oracle Assets bases the asset's new
depreciation expense on the revalued asset cost.
Period
(Yr,
Qtr.)
Asset
Cost
Deprn.
Expense
Accum.Deprn.
Reval.
Amortize
Reval.
Reserve
Yr1 to
Yr 2
Yr3,Q1 10,000.00 500.00 4,500.00 0.00 0.00
Yr3,Q2 10,000.00 500.00 5,000.00 0.00 0.00
Reval.
*3%
10,300.00 0.00 0.00 0.00 **5,300.00
Yr3,Q3 10,300.00 ***1,030.00 1,030.00 ****530.00 4,770.00
Yr3,Q4 10,300.00 1,030.00 2,060.00 530.00 4,240.00
Yr4,Q1 10,300.00 1,030.00 3,090.00 530.00 3,710.00
Yr4,Q2 10,300.00 1,030.00 4,120.00 530.00 3,180.00

Yr4,Q3 10,300.00 1,030.00 5,150.00 530.00 2,650.00
Yr4,Q4 10,300.00 1,030.00 6,180.00 530.00 2,120.00
Yr5,Q1 10,300.00 1,030.00 7,210.00 530.00 1,590.00
Yr5,Q2 10,300.00 1,030.00 8,240.00 530.00 1,060.00
Yr5,Q3 10,300.00 1,030.00 9,270.00 530.00 530.00
Yr5,Q4 10,300.00 1,030.00 10,300.00 530.00 0.00
Asset Cost 300.00

6. At what level FA is implemented?
The FA is implemented at the business group level. Because for one business
group there will be one asset module. The Asset module for the entire
operating unit is same. But the Inventory org may different for the operating
unit.

7. What is the profile used to secure asset register?
Information Standard 44 (IS44) – Information custodianship, requires
agencies to establish and maintain an information asset register. An
information asset register lists the existing information assets across all of
the business units within an organization. It enables users of information to
identify the available information resources from a single source and provides
information custodians with an overview of the information assets under their
care. An information asset register ensures that agency information is
identified, defined and organized in a way that will facilitate access to and
reuse of this information. A register will assist to avoid any
unnecessary duplication of information

8. What are the asset types in FA Module?
1. Capitalized Asset.
2. CIP asset.
3. Expensed asset.

9.What are the different calendars used in FA Module?
You can set up as many calendars as you need. 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, and
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.
Your corporate books can share the same calendar. A tax book can have a
different calendar than its associated corporate book. The calendar for a tax
book must use the same fiscal year name as the calendar for the associated
tax book.
The depreciation program uses the prorate calendar to determine the prorate
period which is used to choose the depreciation rate. The depreciation
program uses the depreciation calendar and divide depreciation flag to
determine what fraction of the annual depreciation expense to take each
period. For example, if you have a quarterly depreciation calendar, Oracle
Assets calculates one-fourth of the annual depreciation each time you run
depreciation.
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.
Attention: If you use this depreciation calendar in a depreciation book from
which you create journal entries for your general ledger, you must make the
period names identical to the periods you have set up in your general ledger.
You can define your calendar however you want. For example, to define a 4-
4-5 calendar, set up your fiscal years, depreciation calendar, and prorate
calendar with different start and end dates, and fill in the uneven periods. To
divide annual depreciation proportionately according to the number of days in
each period, enter By Days in the Divide Depreciation field in the Book

Controls window.
Prerequisites
 Set up your Oldest Date Placed in Service. See: Specifying System
Controls.
 Set up your fiscal years. See: Creating Fiscal Years.
To specify dates for calendar periods:
1. Open the Asset Calendars window.
2. Enter the name of your Calendar.
Suggestion: The name you enter appears in List of Values
windows which allow no more than 15 spaces. You may want to
limit your name to 15 characters.
3. Choose Fiscal or Calendar to append either the fiscal or calendar
year to get the accounting period name. If you do not want the
fiscal or calendar year automatically appended, choose None.
For example, if your fiscal year runs from June 1 to May 31, and
the current date is July 15, 1995, you are in calendar 1995 and
fiscal 1996. If you specify FISCAL, your period name is JUL-96.
If you specify CALENDAR, your period name is JUL-95.
4. Enter the Fiscal Year Name you want to use for this calendar.
5. Enter the number of periods in the fiscal year for this calendar.
6. Note: You cannot enter more than 365 periods per year.
7. Enter the Name of this period. If your periods include the year,
such as JAN-1995, and you are using the hyphen (-) as the
suffix delimiter, you must use either a two or four-digit year
suffix. Oracle Assets automatically adds a four-digit year to the
end of the period name if you do not enter a year. Otherwise,
you can enter a two-digit year suffix.
If you use this depreciation calendar in a depreciation book from
which you create journal entries for your general ledger, you

must make the period names identical to the periods you have
set up in your general ledger.
8. Enter the start and end dates of this period.
9. Save your work.
To change period names for future periods:
Note: Use this procedure if you have already created periods, but need to
change them to correspond with GL periods. You can only change the names
of future period names.
1. Open the Asset Calendars window.
2. Query the calendar for which you want to change period names
and scroll to the last period.
3. From the Main menu, select Edit/Delete Record. Delete all of the
periods you plan to rename.
4. Reenter the deleted periods with the correct name.

R12 Fixed Assets General Questions

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