EDU34BBY - Asset Management Fundametals

PowerPoint PresentationAsset Books
Objectives
After completing this module, you should be able to do the following:
Explain where defining asset books fits into the Oracle Assets process
Discuss the three types of asset books – corporate, tax and budget
Explain the setup options and implementation issues concerning the regions of the defining asset books window
Set up Group Assets
Discuss energy assets
Explain the set up and use of the Security by Book feature within Oracle Assets
Discuss the process flow required to create Security by Book
Copyright © 2007, Oracle. All rights reserved.
Agenda
Asset Books Positioning
Assigned to
Assigned to
New assets are assigned to a Category then to a Book
Asset Books Positioning
Define asset books to store financial information for a group of assets.
There are 3 types of asset books:
Corporate > A book that you use to track financial information for your balance sheet.
Tax > A book that you use to track financial information for your tax reporting authorities.
Budget > A book that you use to track planned capital expenditures.
Define corporate books first and then tax and budget books.
For each corporate book, you can set up multiple tax and budget books that are associated with it.
You can set up multiple corporate books that create journal entries for different general ledger sets of books, or to the same ledger. In either case, you must run depreciation and create journal entries for each asset book.
All assets must be added to a corporate book first. They then can be copied to tax books as required.
Asset Calendars are assigned to asset books for purposes of calculating and allocating depreciation expense.
Asset Categories are assigned for use with asset books. All assets are assigned to an asset category which designates accounting information and default depreciation rules for the assets. Depreciation methods are assigned to asset categories.
Asset Books Regions
(N) Setup > Asset System > Book Controls
Before you can define an asset book, the following items must be completed:
In Oracle Assets, specify System Controls
Define your asset calendars.
Set up your General Ledger Account segment values and combinations.
Set up your General Ledger journal entry sources and categories.
To define an Asset Book:
Enter a book name and description.
Choose a Corporate, Tax, or Budget book class.
If defining a Tax or Budget book, you must associate those books with a Corporate book. If the book you are defining is a Corporate book, it will automatically be associated with itself.
Enter calendar information for your book.
Enter accounting rules for your book.
Enter natural accounts for your book.
Enter journal categories for your book.
You must complete each region for every book you define regardless of whether the information will be used or not. For example, in defining a tax book, you must complete the natural accounts and journal categories regions even if you do not intend to generate journal entries for the book.
Calendar Region
Calendar Region
Allow Purge
GL Ledger
Depreciation Calendar
Prorate Calendar
Current Period
Divide Depreciation
Allow GL Posting
Allow Purge
You must check the Allow Purge checkbox in order to purge information from this asset book. It is recommended that you leave the checkbox unchecked until you are ready to purge data from the book. You can then enable the Allow Purge option, purge your data, then again disable the checkbox. This helps to ensure against unwanted purges of data from this book.
GL Ledger
Enter the ledger for which you want to create journal entries.
Allow GL Posting
Enable if you want to create journal entries for this book. You cannot allow general ledger posting for your budget books.
Prorate 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 calendar to allow finer control of the annual depreciation amount for some monthly prorate/method combinations.
Current Period
The Oracle Assets system will update the current period field each time the current period is closed and the next period is opened. Keep in mind there can be only one open period at a time for each asset book. You must set up the depreciation calendar for at least one period before the current period.
Divide Depreciation
Choose the method for dividing the annual depreciation amount over the periods in your fiscal year for this book.
Choose Evenly to divide depreciation evenly to each period
Choose By Days to divide it proportionally based on the number of days in each period
Depreciate if Retired in the First Year
Choose whether to depreciate assets in this book that are retired in their first year of life.
Last Depreciation Run
Initially defaults to the current date. Oracle Assets updates this date when you run depreciation.
Accounting Rules Region
Accounting Rules Region
Allow Amortized Changes
Allow Mass Changes
Capital Gain Threshold
The minimum time you must hold an asset for Oracle Assets to report it as a capital gain when you retire it. If you want Oracle Assets to report a capital gain for all assets when you retire them, enter zero for the threshold.
Allow Amortized Changes, Allow Mass Changes
If you want to allow amortized changes and mass changes in the asset book, make sure these check boxes are enabled. The default when defining a new asset book has these checkboxes disabled and it is often overlooked to enabled them when defining a new asset book.
Create Intercompany Balancing Segments
Check this check box if you want Oracle Assets to create intercompany journal entries when you run the Create Accounting program.
Allow Cost Sign Changes
Check this check box if you want to allow the cost amount to change from a positive to a negative amount, or from a negative to a positive amount.
Allow Revaluation
Select Allow Revaluation, if necessary, and specify the applicable default revaluation rules.
Allow Group Depreciation
Select Allow Group Depreciation if you plan to use group depreciation for the book and select the applicable group depreciation rules.
Natural Accounts Region
Account Generator Defaults
These accounts represent values for the Natural Account segment from the accounting flexfield associated with the ledger assigned to this Asset Book.
Implementation considerations for the Natural Accounts region:
Retirement Accounts
You can set up your gain and loss accounts so that Oracle Assets creates individual journal entries for each component of the gain/loss amount to separate accounts, or to a single account for the net gain or loss. To use a single Gain or Loss account, enter the same account value in each field. The net effect is a single journal entry.
Other Natural Account Defaults
Enter Deferred Depreciation Reserve and Deferred Depreciation Expense accounts.
Enter the general ledger account that you want to use as an offset account for the entry against accumulated depreciation when you perform reserve adjustments.
Account Generator Defaults
By default, Oracle Assets creates journal entries without cost center level detail for all accounts except the depreciation expense account. Using the default assignments, it creates journal entries using the balancing segment from the expense account in the Assignments window and the account segment from the asset category or book, depending on the account type. The default Subledger Accounting rules use the other segments from the default segment values you enter for the book in this field.
Subledger Accounting is discussed in more detail in the Asset Accounting module of Release 12 Oracle Asset Management Fundamentals.
Refer to Guided Demonstrations – Define an Asset Book [LAB0350Y]
Group Depreciation
Member Asset 2
Member Asset 3
Member Asset 4
Group Assets Overview
The Group Depreciation feature lets you easily manage financial and tax accounting on groups of assets and handle complex transactions for group assets and their member assets by:
Setting up logical groupings of assets (group assets) based on regulatory requirements and your own business needs.
Reducing data entry requirements by defining depreciation parameters for group assets rather than at the individual asset level.
Background
Communications companies typically own and maintain a large network infrastructure enabling them to offer communication services to their many customers.
Networks are constructed of many thousands of individual pieces of equipment, such as switches, routers, cables, transmitters, etc.
These assets often require a large capital investment and must be depreciated over their serviceable lives.
Collections of similar assets are often pooled together into group assets for the ease of financial reporting.
A group may contain many individual assets that were placed into service in different years, but only one depreciation account is maintained for the group.
Depreciation is computed and stored at the group level, known as group depreciation.
Group Assets
A group asset is a collection of member assets
Member assets are individual assets that belong to a group asset
You can add member assets to a group asset, or delete member assets from a group asset
You can transfer member assets in or out of a group asset, as well as transfer member assets between group assets
The group asset cost is equal to the sum of all the member asset costs
Assets are depreciated at the group level
Group Depreciation in the Global Market
Group Depreciation in the Global Market
Companies operating across various global markets are now subject to multiple accounting rules and tax regulations across geographical boundaries.
In many countries, the local tax regulations require companies to depreciate assets in a composite or aggregate form as group depreciation, rather than on an individual asset basis.
Group depreciation aids accommodating many of the composite or aggregate depreciation requirements imposed by the following global regulatory requirements:
United States Telecomm (FCC) and Utility (FERC) compliance reporting
United Kingdom Writing Down Allowance (WDA) compliance reporting
Canada Capital Cost Allowance (CCA) compliance reporting
Japanese group asset financial and compliance reporting
Indian group asset management and compliance reporting
Group and Member Asset Rules
Group and Member Asset Rules provide:
Predefined rules, which help to simplify asset management across your business, by ensuring tight control across capital investments and providing real-time access to asset information.
Group and Member Asset Rules
In Oracle Assets, the predefined Group and Member asset rules help to simplify asset management across your business. As such, these rules ensure tight control across capital investments and provide real-time access to asset information, ensuring correctness of information.
The following represent specific Asset Rules:
A group asset and the associated member assets must belong to the same corporate book.
The depreciation rules defined for the group asset generally supersede those of the associated member assets. Depreciation is generally calculated and stored for the group asset only.
The addition of a member asset will be treated as an amortized cost adjustment to the group asset.
Member asset transactions, such as additions, adjustments and group reclassifications, are treated as amortized adjustments. Expensed adjustments are not allowed for group assets.
The group asset date placed in service is used to determine when depreciation starts for the group asset. This date cannot be updated after depreciation has started for the group asset.
Member assets can be added with a date placed in service that is different than that of its group asset, but a member asset date placed in service may not be older than the date placed in service of the group asset.
If a member asset is added with a prior period date placed in service, the system will treat the member asset addition as an amortized cost adjustment to the group asset from the date placed in service of the member asset. Also, Oracle Assets automatically submits the Process Group Adjustments concurrent program to calculate the prior period depreciation expense for the group asset. You must acknowledge the message containing the request number of the program submission.
When you add a CIP member asset to a group asset, the CIP member asset cost is not added to the group asset until the CIP member asset is capitalized, with one important exception. The exception occurs when you check the Allow CIP Depreciation in the Group Assets check box on the Book Controls window. You may add the CIP member asset cost to the group asset by setting the Depreciate in Group option on the Source Lines window.
Unplanned depreciation is only available for member assets with the Member Asset Tracking option set up for the associated group asset.
Cost is stored and tracked at the member asset level and summarized to the group asset.
Accumulated depreciation is generally stored and tracked for the group asset only.
The asset cost is posted to General Ledger in the period the member asset is added. Depreciation expense is posted to General Ledger from the group asset only, even when member asset tracking is enabled.
Set Up Group Assets
Field
Class
To set up group assets in the Book Controls window:
1. Open the Book Controls window.
2. In the Class field, select Corporate. You can only create group assets in a corporate book.
3. Select the Accounting Rules tabbed region.
4. You must check the Allow Amortized Changes check box before creating group assets in the book.
5. You must check the Allow Group Depreciation check box before creating group assets in the book.
If group assets are not allowed in the tax book, mass copy results in the following:
If you allow group assets in the associated corporate book: The group asset will not be copied to the tax book. All member assets will be copied to the tax book as standalone assets.
If you do not allow group assets in the associated corporate book: No group asset is allowed in either the corporate or tax books.
If group assets are allowed in a tax book, mass copy results in the following:
If you allow group assets in the associated corporate book: The group and member assets will be copied to the tax book based on the mass copy options in the Tax Rule tabbed region.
If you do not allow group assets in the associated corporate book: No group asset is allowed in either the corporate or tax books. In Oracle Assets, any asset must exist in the corporate book before being added to the tax book. A group asset is no exception to this rule. Therefore, a group asset must be allowed in the corporate book in order to be copied to the tax book.
Note: Mass Copy does not copy group reclassification transactions that are performed when changing member assets' group assignment. Mass Copy does not copy an type of group adjustment, including group reserve transfer, group retirement adjustments, and group unplanned depreciation.
6. Optionally check the Allow CIP Members in Group Assets check box to enable adding CIP assets to group assets. If this check box is not checked, you will not be able to add a CIP asset to a group asset, even if you have set the default group asset on the Default Depreciation Rules window on the Categories form. If the Allow CIP Members in Group Assets check box is unchecked, the Allow CIP Depreciation in Group Assets check box is disabled. Once the Allow CIP Members in Group Assets check box is checked and saved, you cannot uncheck it.
7. You must check the Allow CIP Depreciation in Group Assets check box to depreciate the CIP asset cost for member assets.
8. Optionally check the Allow Member Asset Tracking check box to enable member asset tracking for the depreciation book. Once the check box is checked and saved, you cannot uncheck it.
9. You must check the Allow Intercompany Member Asset Assignments check box if you want to allow member assets to have balancing segment values that are different than the balancing segment value of the group asset. If the check box is unchecked for a particular depreciation book, you cannot set up member asset tracking for that book.
Assigning Member Assets to Group Assets
Group Asset
Member Assets
Assigning Member Assets to Group Assets
You can assign a member asset to a group asset using the following three options:
The Asset Workbench to assign an asset to a group asset.
An asset category that is assigned to a group asset.
The Prepare Mass Additions process to assign an asset to a group asset.
Detail Additions:
(N) Assets > Asset Workbench
Query the member asset you want to assign to a group asset.
In the Books window, enter the book.
On the Group Asset tabbed region, enter the group asset number in the Group Asset field.
Save your work.
Note: The Reduction Rate field is enabled for the member asset whenever it is enabled for the group asset, and it defaults to the reduction rate setup of the group asset. You can override the default reduction rate for each transaction.
Mass Additions
(N) Mass Additions > Prepare Mass Additions
Query the member asset you want to assign to a group asset.
In the Mass Additions window, enter the group asset number in the Group Asset field.
(B) Done.
Asset Category
You can also enter the group asset number in the category default rules when setting up a new category. All new assets for this category will be member assets of the group asset entered in the category.
Group Asset Reserve Transfer
Group Asset Reserve Transfer
You can use a reserve transfer to transfer all or part of the reserve from one group asset to another.
(N) Assets > Asset Workbench
1. Query the group asset from which you are transferring a reserve amount.
2. Choose the Transfer Reserve button.
3. Enter the transfer amount and the destination group asset number.
Refer to Practice – Set Up Group Assets [LAB3E88Y]
Energy Assets
Energy Assets
Oracle Energy Assets addresses the financial and reporting requirements of the oil and gas industry. The oil and gas industry accounts and reports asset information based on a two-level parent (field) and child (wells) structure.
Asset information is:
Captured at the lower level.
Summarized to a higher level at which operations, queries and reporting are done.
Operations include:
Depreciation calculation
Transfer of costs and reserve
Impairment
Depreciation Methods
Oil and gas companies use unit-of-production and life-based methods based on a depreciation basis defined as Net Book Value (NBV) over the net remaining reserves for the Energy Units of Production method, or the net remaining life for the Energy Straight-Line method. The assets in a hierarchy are transferred along with its reserve to another hierarchy. When an asset is transferred, the source asset hierarchy is decreased by the transferred amount(s), and the target asset hierarchy is increased by the transferred amount(s).
Energy companies also recognize impairment expense at the parent level.
Energy Assets uses the following two methods to calculate energy depreciation:
Energy units of production
Security by Book
Co 1 User
Co 2 User
Co 3 User
Co 4 User
Absolutely Something!
Security by Book
Prior to Security by Book, unless your Oracle Assets installation was Multi-Org enabled, there was no way to restrict user access to query and update information pertaining only to those users' asset books. Users could access any asset book on the system. Thus, the power and flexibility of having each department in a large organization have its own asset books was mitigated because each departments' staff could still query and update possibly sensitive data in other departments.
Oracle Assets's Security by Book feature makes use of a Security Profile that is attached to a responsibility to determine which records are available to holders of that responsibility. The Security Profile acts as the 'glue' between an organization and a responsibility. To set up a security profile that permits access to asset books of certain organizations only, you make use of organizational hierarchies.
Organizations and Security by Book
UK User
Oracle UK
Organizations and Security by Book
An organization hierarchy can have more levels than are represented in the example above. Oracle UK could be a subordinate of another organization or other organizations could be assigned as subordinate to either of the divisions.
Organization hierarchies show reporting lines and other hierarchical relationships among the organizations in your business.
A security profile allows you to control access to Oracle Assets through responsibilities that you create and assign to users of the system. Users can sign on to Oracle Assets only through the responsibilities that you give them. Their responsibilities control what they can see and do in the system. A responsibility always includes a security profile, which you associate with a work structure such as an organization hierarchy.
How Security by Book Is Used
within Process Flow
View reports
How Security by Book Is Used within Process Flow
Users can view and update information based on the responsibility to which they are assigned.
You can have individual corporate books and their associated tax and budget books accessible only by one responsibility or by several responsibilities.
You can also construct a hierarchical structure in your security model, in which a given responsibility can access all books belonging to one or more responsibilities.
Security by Book Setup Steps
Specify the Hierarchy
Setup Security Profiles
Create Responsibilities
From Oracle Assets, N > Setup > Security > Organization > Description
From HR, N > Work Structures > Organization > Description
Define your Organizations
If you are creating a fresh installation, you will need to define your organizations from the beginning. However, if you are working on a migration to 11i or above, organizations may already exist. Thus, the question is whether or not you want to use the existing organizations as your asset organizations or create completely new and different organizational hierarchies.
Oracle Human Resources includes a predefined organization named Setup Business Group. We recommend that you modify the definition of this predefined business group rather than defining a new one. If you define a new business group instead of modifying the predefined Setup Business Group, you need to set the HR: Security Profile profile option to point to the security profile for the new business group. Oracle Human Resources automatically creates a security profile with the business group name when you define a new business group. Oracle Human Resources incorporates all other organizations you specify into the business group you define.
Oracle Human Resources uses organization classifications to determine the type of organizations being set up. To flag an organization for use in Oracle Assets, you enable the Asset Organization classification. An asset organization is an organization that allows you to perform asset–related activities for specific Oracle Assets books. Oracle Assets uses only organizations designated as asset organizations. To set up these asset organizations (or modify existing organizations and convert them into asset organizations), you will need to use the Organization form. The organization form can be accessed via Oracle Assets or, if you are an Oracle Human Resources customer as well, via the Oracle Human Resources responsibility.
Note: You cannot assign one book to two different organizations. For example, if you assign Tax Book A to the Oracle Manchester organization, you cannot assign it to the Oracle London organization as well. When you attempt to assign Tax Book A to Oracle London, the book will be saved as expected, but the Oracle Manchester organization will no longer be able to access Tax Book A!
Note: You can assign a corporate book and its associated tax book to two different organizations. However, if you want to perform a Mass Copy, the user must access the organization that is assigned to the tax book.
The hierarchy specifies the relationships between each of the asset organizations. From the Hierarchy form, you can create your organizational hierarchy. You need to define the top organization in the hierarchy and at least one organization subordinate to it.
Set Up Security Profiles
Once the organizations have been created and assembled into a hierarchy, you are prepared to set up the Security Profiles. The Security Profile is linked to the user's responsibility and business group and determines which asset books are available to holders of the responsibility. If you do not set up the Security Profiles correctly, Security by Book will not function. Why? Because a Security Profile holds together the responsibilities and the organizations. Without the security profile, all responsibilities can access all organizations.
Security by Book Setup Steps
Setup Security Profiles
Run the Security List Maintenance Program
Once you have defined all of the Security Profiles, you must run the Security List Maintenance program. This program is not a report, so there should not be any output expected. The Security List Maintenance program updates the List of Values with the appropriate books. This is a critical step, as it completes the organization and security profile setup.
You should schedule it to run every night to take account of changes made during the day.
Once you have created your organizations, assembled them into hierarchies and created their appropriate Security Profiles, you are prepared to create the Responsibilities. A responsibility determines if the user accesses certain Oracle Applications, which applications functions a user can use, which reports and concurrent programs the user can run, and which data those reports and concurrent programs have access to. Each application user is assigned at least one responsibility. Since Responsibilities cannot be deleted, the Effective Date must be adjusted to enable/disable them. This process is typically performed by the Oracle Systems Administrator only.
Attach Security Profiles to Responsibilities
Once you have created your responsibilities, you may then attach the security profiles to each responsibility. This effectively links the organization and responsibility via the security profiles. This process is typically performed by the Oracle Systems Administrator only.
Assign Responsibilities to Users
The final step in the Security by Book setup is to assign the various responsibilities to your users. You can create a userid/password for each of your fixed assets users and assign them the appropriate responsibilities through the System Administrator responsibility.
Refer to Demonstration - Security by Book Setup [LAB0351Y]
Refer to Practice - Review Security by Book Setup [LAB0379Y]
Troubleshooting Security by Book
Troubleshooting Security by Book
You have set up the Security by Book feature, yet for some reason… your security by book setup does not seem to be working. This section lists some possible avenues that you may wish to investigate:
Functionality review. The Security by Book feature enables you to designate an organizational hierarchy in which the assets of an organization can only be seen by (a) the parent organization and (b) itself. For example, if you are in Headquarters, you should be able to see all assets and select all books in the organization.
An Orphan Organization. You may set up and define any number of organizations and include as many of them as you wish in the hierarchy. If you set up the organizations but accidentally leave a location out of the hierarchy, you will be able to see that location's assets from everywhere in the hierarchy. Make sure that your hierarchy is set up as you planned.
Leaving out the Security List Maintenance program. This program populates the LOV's with the appropriate information. If you miss this important step, your LOV's will not show the correct books that are available for each organization to access.
Viewing additional books. If there is a book that already exists on the system and you have not assigned that book to a particular organization, all organizations will be able to see the book and its assets. For example, if you are able to view Oracle UK's corporate book from Oracle Manchester, you may want to check the Organization form and query up Oracle UK to ensure that the book was associated with the organization properly.
Implementation Considerations for Security by Book
Implementation Considerations for Security by Book
Consider the following questions regarding use of the Oracle Assets Security by Book feature:
Do you need to limit access to asset books?
Do all your books need security?
How do you want to organize security?
Who will update security?
Summary
In this module, you should have learned how to:
Explain where defining asset books fits into the Oracle Assets process
Discuss the three types of asset books – corporate, tax and budget
Explain the setup options and implementation issues concerning the regions of the defining asset books window
Set up Group Assets
Explain energy assets
Explain the set up and use of the Security by Book feature within Oracle Assets

EDU34BBY - Asset Management Fundametals

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