End to end configuration of Oracle Fixed Assets module

Oracle Financials > Oracle Fixed Asset 

Fixed Assets Basic Setup Steps - Oracle FA

This document will explain the major setups that are required to configure Oracle Asset module.

Define Asset Key Flexfield

Define Asset Category Key Flexfield

Define Asset Location Key Flexfield

Add values to the Category, Location and Asset Key value Sets

System Controls

Define Asset Fiscal Year

Define Asset Calendars

Define Prorate Conventions

Define Asset book Control

Detail:

1- Define Asset Key Flexfield

Flexfield is used to group assets by non-financial information. In my little experience there is no use for this flexfield. Although we have to create at least on segment with a default value in its value set because they asset key field on the asset addition window will become mandatory.

Define one segment and assign a value set to it with one default value.

Setup>Financials>Flexfields>Key>Segments

 Define Asset Key Flexfield

  Define Asset Key Flexfield Segment

This screen is used to define the Value Sets for each segment used in the Asset key flexfield. There are seven possible segments and Oracle recommends that no more than three segments be used. This is a Global and site specific variable.

2- Define Asset Category Key Flexfield

This Flexfield is used to group assets by financial or logical identification and usually depreciate using the same rules. Two Segments are predefined in the oracle Application Major Category and Minor category and frequently they are used.

For example the major category is automobiles under this major category we can have many minors like cars, trucks and fork lifters ….etc. It is good to notice that when defining the value set for the minor category it must be dependent on the major category.

Note:  Assets flexfields are Global.

Define Asset Category Flexfield

Setup>Financials>Flexfields>Key>Segments

Use key Flexfields to customize your application to fit unique business needs.

 Define Asset Category Flexfield Segment

Use key Flexfields to customize your application to fit unique business needs.

Define Asset Category Qualifiers

3- Define Asset Location Key Flexfield

  This Flexfield is used to determine the location of an asset. For example and an air conditioner could be located in the management building, in the 2nd floor and in HR Room. In this case we need to define 3 FlexFlieds and 3 value sets one for the Building and 2 others for the floor and room

Setup>Financials>Flexfields>Key>Segments

 Define Asset Location Flexfield

Define Asset Category Flexfield Segments

4- Create Asset Category

Enter the required detail to create the asset category.

 Complete the below requried details as per requirement.

5-System Controls

Setup> Asset system> System controls.

It’s very important that you take a notice when you enter the Oldest Date Placed In Service Field, as you will not able to add any assets before this date.

6-Define Asset Fiscal Year

Setup> Asset System> Fiscal Year

Define fiscal year for the system from the Oldest date an asset is placed in service

7-Define Asset Calendars

Setup> Asset System> Calendars

You can create as many calendars as you want. You can create on calendar for calculating depreciation and another for prorate convention –

. Usually we create one calendar and use it for both purposes.

Note That:   Periods’ Names entered for the calendar must be exactly like the periods’ names entered in the calendar defined for your ledger.

8-Define Prorate Convention

Setup>Asset System >Prorate Conventions

Prorate/Retirement Convention
when to start calculating asset depreciation based on when the asset is placed in service. 

For Example, assets will be depreciated added on the 1st half of the month to be depreciated in the same month; on the other hand assets added in 2nd half of the month depreciated on the next month of the month they are placed is service. 

9-Define Asset book Control

There are  3 types of asset books:
1- Corporate Book.
2- Tax Book.
3- Budget Book.

(N)> Setup> Asset System> Book Controls

Calendar :

 Accounting Rules:

Capital Gain Threshold:

The period you want the system to wait before start calculating capital gains when you retire an Asset.

Amortized Changes:

If You want to be able to change the amortization amount calculated by the system for patents or Good-well.

Allow Mass Changes:

To allow changes to take effect on multiple assets when made.

UK Local Authority Accounting:

Used by the UK Law.

Allow cost sign changes:

To be able to change the sign of assets cost.

Allow Revaluation:

To allow revaluation for assets.

Revalue Accumulated Depreciation:

 Used to revalue the accumulated depreciation when a revaluation is made on an asset .If you do not revalue accumulated depreciation, the system transfers the accumulated depreciation to the revaluation reserve account.

Revalue YTD Depreciation:

To revalue year-to-date depreciation.

Retire Revaluation Reserve:

to close the revaluation reserve account –used if you don’t revalue accumulated depreciation- when the asset is retired.

Amortize revaluation reserve:

to allow the reserve account –used if you don’t revalue accumulated depreciation- to be amortized.

Revalue fully reserved assets:

When you have an asset that is fully reserved for a reason or another, you will be to revalue this asset.

Life Extension Factor & Life Extension Ceiling:

If you used revaluating fully reserved assets enter an life exterior factor, this will extend the asset life by using the following equation: New asset life = Life exterior factor x Asset Life.
Enter the maximum life of the asset after extension.

Allow Group Assets Depreciation:

To add group assets to this Book.

Allow CIP Members in Group Assets:

To allow CIP Assets to be added to a Group asset.

Allow CIP Depreciation in Group Assets:

To allow depreciation of member CIP asset cost.

Allow Member Assets Tracking:

To be able to track a single member asset in Asset Group.

Allow Intercompany Member Asset Assignments:

To allow the group asset and member assets to have a different balancing segment value. If the check box is not checked, the group asset and each of its member assets must have the same balancing segment value.

Natural Accounts:

Proceeds of Sale:

This Account is used to record the Gain or Loss resulting from sale of an asset.

Cost of Removal:

This Account is used to record the cost of removing an asset when sold.

Net Book value Retired:

This Account is used to record Gain/Loss when retiring an asset.

Revaluation Reserve Retirement:

This Account is used to record Gain/Loss on the revaluation reserve if used when retiring an asset.

Deferred Revaluation Reserve & Deferred Depreciation Expense & Depreciation Adjustments:

These 3 account are used to record the difference between the depreciation calculated by the corporate book and the tax book if you are using a Tax book. (US Tax Law)

Account Generator Defaults:

An account generator can be used to alternate the way Oracle Fixed Assets standard Transaction.
The Default Account combination for the Journal entries comes from different areas as described below