BP80 Fixed Assets V 10doc

AIM
BP.080 - FUTURE PROCESS MODEL

Aditya Brila Retail Limited
Future Process Fixed Assets
Version: Oracle Application 12.0.4
Author
: Ram Ganesh
Creation Date
: 26 Sep 2008
Last Updated
: 29-Sep-2008
Document Ref
: ABRL-BP080-FA
Version
: 1.0
Approvals:
Name and Designation
Signature
Swarup Ghosal Chaudhary, Project Manager

Wipro
Saurabh Chakravarthy
Bala S.K
Confidential for Internal use only
Oracle 11.5.10.2 Implementation Project

BP.080-Future Process Model- Fixed Assets
FA_BP080_NLL
5 May 2008
Document Control
Change Record
Date
Author
Version
Change Reference
Reviewers
Name
Position
Shalini Pal
Lead Consultant, Wipro Infotech
Distribution
Copy
No.
Name
Location
Note to Holders:
If you receive an electronic copy of this document and you print this out,
you should write your name on the front cover (for document control
purposes).
If you receive a hard copy of this document, please write your name on the
front cover (for document control purposes)
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Company Confidential - For internal use only
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Oracle 11.5.10.2 Implementation Project

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Contents
Document Control........................................................................................ii
Introduction.................................................................................................4
About Company.....................................................................................4
Document Scope and Assumptions........................................................4
ABRL HO Finance...................................................................................4
Key Issues Highlighted /Observed.........................................................5
Key Business Process Improvement.......................................................5
Legend......................................................................................................... 6
Fixed Assets Process....................................................................................8
Event Catalog for Fixed Assets....................................................................9
Process Descriptions for Fixed Assets........................................................10
Fixed Assets Future Process Flow in Application........................................12
ABRL Future Business Process Flow.....................................................13
FA-P001: Prepare Mass Additions........................................................13
FA-P002: Post Mass Additions..............................................................15
FA-P003: Manual Additions..................................................................18
FA-P004: Enter CIP Asset.....................................................................20
FA-P005: Asset Maintenance................................................................22
FA-P006: Adjustments - Financial and Other Asset Information..........24
FA-P007: Asset Retirement..................................................................26
FA-P008: Asset Transfer.......................................................................28
FA-P009: Manage Construction in Progress Assets..............................30
FA-P010: Depreciate Assets.................................................................32
FA-P011: Period Close Process.............................................................33
FA-P012: Create Journal Entries..........................................................36
Open and Closed Issues............................................................................38
Open Issues......................................................................................... 38
Closed Issues.......................................................................................38
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Oracle 12.0.5 Implementation Project

FA_BP080_ABRL
08 Sep 2008
Introduction
About Company
ABRL Profile
Aditya Biral Retail Limited belongs to the USD 28 Billion Corporation that is in the league of fortune 500.
ABRL made its foray into retail market in 2006 by acquiring Trinethra, a retail chain of super markets in south
India and with over 170 Outlets. Spread across the four southern states of Tamilnadu, Karnataka, Andhra
Pradesh and Kerala respectively. In May 2007 ABRL launched its own Brand of retail stores More. More
Spread its wings in Super Markets and Hyper markets ranging from an area of 10000 Sq.Feet to 75000
Sq.feet, more. has till date around 100 Super Markets in locations across Pune, Vizag, Delhi, Bangalore &
Vijayawada.
Document Scope and Assumptions

This document is the result of discussions with key personnel from Aditya Birla Retail Limited (ABRL).
This document outlines the future process model proposed for the Fixed Assets function of ABRL. The scope of
the module includes Addition , Maintenance , Depreciation Calculation, Retirement of assets and Integration
with General Ledger.
This high level process model has been developed based the discussions with the key users of from the
Accounts Department of ABRL. The document describes each of the business functions identified within ABRL
during the discussion and the proposed business solution using the Fixed Assets module. It will also identify
the individual processes that it performs within business functions and explain the process and limitations (if
any) compared to current practice. Each business function contains the following sections:
Descriptive overview
Process descriptions
The proposed solution uses the standard Oracle Application Release 12.0.5 with India Localization which is an
integrated Module of Supply Chain, Oracle Financials. Oracle Assets module provides the basis for creation,
tracking and maintenance of fixed assets. Those business functions identified as not being sufficiently catered
for by the standard system will be addressed during detailed analysis in Phase - II of the implementation
cycle. We may propose to change the business practices or will propose workarounds that can be fulfilled using
standard Oracle applications. In the event of these options are not able to meet ABRL requirements, we may
look at the possibility of customizing the functionality and features of the standard modules. This will be a last
resort as our intention will be to keep the system as standard as possible.
If customization is unavoidable, we will try to make the processes external to Oracle Assets module. Our
objective is to avoid modifications to the core logic and procedures of the Oracle Assets system.
Upon acceptance of this document, we will carry out the business mapping for the Assets system and a gap
list will be produced addressing the business areas that are not supported by the standard Oracle Assets
module. We will also suggest the workarounds (if any) in the same document.
It is important that all key users and the IT key users go through this document and identify any areas that we
may not have addressed or are not to be implemented due to operational reasons. Such items need to be
addressed at this stage to ensure smooth deployment of the system.
ABRL HO Finance
The HO Accounts in ABRL is responsible for maintaining the Financial and Management accounts in the
company.
The Fixed assets processing activities of ABRL are currently performed using FAMS/Navision system. In ABRL
all Fixed Assets reports are performed manually using FAMS, an offline System
The Accounts Department matches Supplier Invoices with Receipts and then they manually record the items as
fixed assets in the System.
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The objective of this document is to recommend the High level Process model for the Fixed Assets functions in
ABRL. Future process model will be used as the basis for the Oracle Product mapping.
ABRL Proposes to maintain a single Corporate Book that will be associated with HO Ledger.
Key Issues Highlighted /Observed

1.
Integration is the key issue as many processes are performed manually (i.e. no
integration with other modules).
1.
Matching of PO/GRN against Invoice and Fixed Asset is performed manually.
2.
In ABRL Fixed
Spreadsheet.
3.
In ABRL, journal entries relating to Fixed Assets are passed in the General
Ledger manually.
4.
In ABRL, Depreciation under Income Tax are calculated separately in Excel

Sheet.
5.
ABRL Follows a Straight line Method of Depreciating Assets based on the rates
for the relevant assets/category of assets.
6.
In ABRL, Store opening date is the cutoff date for capitalizing the assets for
that Location
7.
ABRL Capex procurement, Invoicing, payment and capitalization process is

centralized
8.
Transfer of Asset related financial information namely Asset cost and

depreciation expense to the Concerned State ledger is not possible as a single
FA book can be attached to a single ledger only.
Assets
schedule
is
prepared
manually
using MS-Excel
Key Business Process Improvement

Following are the key areas where the process improvements have been proposed:
1.
Integration of the Fixed Assets process with the Purchase Order, Accounts
Payable, General Ledger processes.
2.
Invoice details will be transferred electronically from the Accounts Payable

module to the Fixed Assets module.
3.
Actual depreciation will be automatically calculated by the system monthly.
4.
All journal entries related to the fixed assets will be automatically generated
and passed to Oracle General Ledger.
5.
Depreciation expense can be assigned to relevant cost centers.
6.
Capex Purchase orders, GRN, Invoicing and capitalization will be carried out in
ABRL HO Ledger and ABRL HO will be responsible for the maintenance of the
FA Book.
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Legend
Future Business Model

The Fixed Assets Module takes care of the Asset Management and Reporting requirements of the entire
enterprise. The module allows users to create assets either manually or through Mass Additions, perform Asset
transfers, Adjustments, Retirements and Depreciation.
ABRL Proposes to follow a centrally Managed Asset Management System. Requisitions for asset Purchases are
proposed to be raised by the Project team and subsequent process of raising POs and Making Payments for
the procurement being handled from HO. The Proposed Process in ABRL is diagrammatically Presented in the
following Process Flow Diagram.
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The Asset Register is referred to as an Asset Book i.e. Corporate Book in the Oracle Assets.
The journal of all the financial transactions of an Asset Book is done in the GL. Hence every asset book should
be associated with a GL.
Fixed Assets has three flex fields that assist in codification and classification of assets.
Asset Category Flex field

ABRL Plans to have its Assets categorized in to Major and Minor Categories. For this Purpose Asset Category
Flex fields would be configured to meet the requirements of ABRL for grouping their assets based on
Depreciation Method, Rate etc.
The Asset Location Flex field

This structure is to be used for recording asset locations and use this as the basis of recording physical asset
transfers. It can support up to seven segments. This is a mandatory flex field.
ABRL Proposes to track its assets based on the Asset Locations and for the purpose the Flexfield would be
configured accordingly to cater to their requirements.
The Asset Key Flex field

ABRL can group assets as per it own requirements apart from the grouping to be done using the Asset
Category Flex field. The Asset key Flex field can be used for this. This structure is to be used for recording user
required groupings. This flex field can support up to ten segments. This flex field is optional.
Depreciation Calendar
Depreciation calendar is the calendar, which the entire fixed assets use for the purpose of calculating
depreciation and subsequent accounting in the General Ledger module. It is a general practice to maintain the
same calendar for both the GL and the FA.
Depreciation Methods
Oracle Assets supports almost any depreciation method. The depreciation methods that can be used are Flat
rate, Table based, Calculated, Production based and Formula depreciation.
Different depreciation methods can be used for different categories based on ABRL requirements.
Prorate Convention/Retirement Convention.

ABRL requires a Prorate convention so as to enable it to have the assets depreciated as on the date asset
placed in service regardless of the date Depreciation is run for the asset.
Prorate Convention is used to capture prorate date. Prorate date is the date which overwrites the date placed
in service for depreciation calculation during the first year of the assets life.
In prorate convention, we specify what should be the prorate date from which the system should calculate
depreciation for the first year, for a given date placed in service. The system in turn identifies the period to
which the prorate date belongs to and calculates depreciation for that period.
Physical Verification of Assets

In the Assets module, Physical Inventory is the process of comparing the location and number of units of fixed
assets as per the information maintained by Oracle assets with the actual location and no. of units. Its helps
to identify the missing assets. To use Physical Inventory feature, it should be enabled for each Asset category
at the time of setup.
Transfer of Assets
Each asset can be assigned to a location and / or to an employee. Assets can be transferred
between locations or from one employee to another.
Running Depreciation
Depreciation can be run only at the book level and for a period at a time. Running depreciation for a period
automatically closes the current period and opens the next period for transactions. Fixed Assets can have only
one period open at any point in time.
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Fixed Assets Process
FA-E01
FA-E01
Create
Fixed
Create
AssetsFixed
Assets
FA-P001
Prepare Mass
Additions
FA-P002
Post Mass
Additions
FA-P003
Manually Add
Assets
FA-P004
Enter CIP
Assets
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FA-E02
FA-E02
Maintain
Fixed
Maintain
Assets Fixed
Assets
FA-P005
Maintain
Assets
FA-P006
Adjustment to
Financial
Information.
FA-E03
FA-E03
Depreciate
Depreciate
Fixed
Assets
Fixed Assets
FA-P010
Depreciate
Assets
FA-E04
FA-E04
Period
Close
Period
Close
Process
Process
FA-E05
FA-E05
Book
Book
Control
Control
FA-P011
FA-P011
Period
Close
Period
Close
Process
Process
FA-P013
Book
Control
FA-P012
Create Journal
Entries
FA-P007
Asset
Retirement
FA-P008
Asset Transfer
FA-P009
Manage CIP
Assets
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Event Catalog for Fixed Assets

Event
Id
Name
Type
FA-E01
FA-E02
Creation of Fixed Assets

Maintain Fixed Assets
Internal
Internal
FA-E03
Depreciate Fixed Assets
Internal
FA-E04
Period Close Process
Internal
FA-E05
Define Book Control
FA-E06
Defining Flex Fields
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Description
Frequency
Create fixed assets in the Assets module.

Maintain fixed assets information in the Assets module. This includes adjusting asset value,
retiring assets, transferring assets and maintaining CIP assets.
Run depreciation process to calculate the depreciation amount of all assets.
As Required
As Required
Monthly
Internal
Period Close Process and Create journal entries relating to fixed assets e.g. depreciation
journals, disposals etc.
Creation of Corporate Book
Internal
Creation of Asset Flex fields
Monthly
Once at the time of

setup
Once at the time of
setup
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Process Descriptions for Fixed Assets

Event
Process Title
Description of Process
FA-P001
FA-E01
Prepare Mass Additions
Invoices are matched against Purchase Orders, Goods Receipt Note. The invoice details are
then transferred from Oracle Payables to Oracle Assets.
FA-P002
FA-E01
Post Mass Additions
The transferred invoice details (mass additions) are reviewed in Oracle Assets. Fixed Assets
will be created based on the invoice details transferred from Oracle Payables.
FA-P003
FA-E01
Manual Additions
There may be a requirement for some assets to be created directly in the Oracle Assets
module (i.e. not via the transfer of invoices from the Oracle Payables module). For such
cases, the assets are manually created as Fixed Assets.
FA-P004
FA-E01
Enter CIP Asset
Construction In Progress (CIP) assets have zero cost. They are not tracked as Fixed Assets
until construction is completed and they are placed in service. CIP assets can be created in
the system either from Mass Addition lines from Oracle Payables or Manual entry in Oracle
Assets.
FA-P005
FA-E02
Maintain Assets
Existing Assets are maintained in the Asset system in this process. The maintenance
performed includes adjustments to asset information, adjustment to depreciation,
adjustment to financial information, asset retirement, transfer of assets to different locations
and capitalizing CIP assets.
FA-P006
FA-E02
Perform Asset Adjustments Financial Information
This process describes adjustments to financial information of assets.
FA-P007
FA-E02
Asset Retirement
An asset that is no longer in service will be retired. For example assets that are lost,
damaged beyond repair, sold or returned will be retired by this process.
FA-P008
FA-E02
Asset Transfer
This process describes the transfer of existing assets between employees, depreciation
expense accounts and locations.
FA-P009
FA-E02
Manage CIP Asset
After CIP assets are first captured in Oracle Assets, they are built up over a period of time.
This process describes the maintenance of CIP assets. This includes adding, deleting or
changing invoice lines to the existing CIP asset, transferring invoice lines between existing
CIP assets, capitalizing CIP assets.
FA-P010
FA-E03
Depreciate Assets
Run the depreciation process to calculate depreciation amounts for all assets within a book
for a period. After the depreciation process is run, Oracle Assets automatically closes the
current period and opens the next period.
FA-P011
FA-P012
FA-E04
FA-E05
Period Close Process

Create Accounting
Period Close process in Oracle Fixed Assets

Oracle Assets creates journal entries for depreciation expense, asset cost and other
accounts. These journal entries are automatically created and transferred to the Oracle
General Ledger module.
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Fixed Assets Future Process Flow in Application
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ABRL Future Business Process Flow

Requisitions are raised by the Project Team members to the HO. Upon the approval of the Requisition the Purchase order is raised by ABRL HO, in Mumbai.
Invoices are generated upon matching the same to Receipt at the HO. POs for other Locations are proposed to be processed from HO only. Fixed Assets Future
Business Process Flow explains the proposed Flow in ABRL.
FA-P001: Prepare Mass Additions

The mass additions process allows for the addition of new assets or cost adjustments from other systems to Oracle Assets automatically without re-entering the
data. For example, new assets can be created from invoice lines brought over to Oracle Assets from Oracle Payables.
ABRL suppliers invoices can be matched to the goods receipt electronically within the Oracle Payables module. There is no requirement to perform the matching
using physical copies of the Purchase Order or Goods Receipt Note, After the relevant invoices have been approved, the Mass Addition process will be run which
will transfer invoice information from Oracle Payables to Oracle Assets. Once the invoice information is transferred to Oracle Assets, further processing on the
asset is performed.
The process flow diagram describes this process.
ABRL Proposes to have assets added in bulk through Mass Addition and split the same in to individual Assets at the time of capitalising the assets.
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FA-P002: Post Mass Additions

Once the mass additions lines (i.e. invoice details) have been transferred from Oracle
Payables to Oracle Assets, they can be reviewed from within the module before posting
them to Oracle Assets (i.e. before creating assets). The review is done to confirm how
each mass addition line (i.e. invoice line) will be processed. Several options are available:
Each mass addition line will be created as an asset.
Each mass addition line will be combined with other mass

addition lines to form one asset (i.e. several invoice lines
will be grouped together to form one asset).
One mass addition line can be split to create several

assets. This may occur when several purchased items are
recorded under one invoice line (e.g. 5 x PCs) but each
item has to be recorded as an individual asset in the
system.
Mass addition lines which were created in error (i.e. those

not meant to be created as assets can be deleted from the
system.
During this process, additional information such as mass addition source, descriptive, and
depreciation information can be inputted into the Assets module.
Once the user has verified that the mass addition is ready to become an asset, the user
changes the mass addition queue to POST. Post Mass Additions function is then run and
this mass addition line will become an asset.
The Mass Additions post program defaults depreciation rules from the asset category,
book, and date placed in service. The user if necessary can override this information
manually.
Asset Categories
Oracle Assets uses the category Flex Field to group your assets by financial information. By
standardizing category names, it is easier to track the assets. By defaulting financial and
depreciation information from the asset book and asset category, the creation of assets
can be speeded up as less information needs to be manually entered during asset creation.
Further Asset Category Flex fields determines the account to which depreciation expense
will get generated.
Oracle Assets allows having a maximum number of 7 Segments for Asset Category
Flexfield.
For ABRL the Category will be created as
Major Category
Minor Category I
Minor Category - II
Asset Key
ABRL has a requirement to track assets by ---- (i.e. assets purchased in the particular
financial year). In ABRL the Asset Category will have only one Segment as Asset Key
This Flex field can be used to group assets without impacting the financial reports as
required by ABRL.
Asset Locations
ABRL will track the locations of all assets. ABRL Will have a Asset Location Flex field
structured on the pattern of Location Segments designed in the Accounting Flex field as
follows.
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Location Segment Values.
Asset Number
ABRL will practice automatic numbering of assets.
Tagging
ABRL will tag its assets i.e. Tag labels containing the asset number and other necessary
information will be attached onto the assets.
These Tag Labels will facilitate users in identifying assets during stock taking exercises.
Tag Numbers has to be manually entered by the person who is creating the asset.
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FA-P003: Manual Additions

There are occasions in ABRL where certain assets are to be created directly in the Oracle
Assets module (i.e. not via the transfer of invoices from the Oracle Payables module). For
such cases, the assets are manually created as Fixed Assets.
For example, Furniture and Fittings acquired to decorate the model homes and common
areas of properties held for sales are considered as marketing and promotion expenditure.
Such assets must be tagged and maintained under a separate register.
There are 2 ways assets can be added directly into the Oracle Assets module.
The quickest way is to use the Quick Additions function. This function allows for the
addition of an asset by accepting default information. Details entered into the system
include:
Description of the asset

Asset Category
Current cost
Date Placed in Service
Employee the asset is assigned to
Depreciation Expense Account
Location
Using Quick Additions, only a limited number of fields are captured for each asset. Most of
the information is also defaulted from the parameters assigned to the Asset Book and the
Asset Category. For example, the depreciation methods are defaulted from the Asset
Category.
The Detail Addition function is used to enter complex assets that the Quick Addition
process does not handle. This function allows more information to be captured about the
asset. Default information can also be changed. The information includes:
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Asset Description
Asset Category
Number of units making up the asset
Details of asset sub-components
Manufacturer and Model
Serial number
Property type and class (i.e. Owned/Leased and New/Used)
Purchasing information (e.g. Supplier name, PO number, Invoice
Number of Supplier)
Current cost, Accumulated Depreciation etc
Salvage value
Date placed in service
Indicate whether the asset will be depreciated (Oracle Assets can
track items that do not need to be depreciated e.g. expensed
items)
Override and change the depreciation and prorate methods which
were defaulted from the category.
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FA-P004: Enter CIP Asset

ABRL will create an asset which is to be constructed over a period of time through CIP
Asset creation function. A construction-in-process (CIP) asset is an asset constructed over
a period of time. CIP assets will be maintained in the Oracle Assets module and can be
tracked for material and labor resources to build the asset. Initially, the CIP asset is not in
use, it does not depreciate. When the CIP asset is complete (i.e. when capitalised) ABRL
will place the asset in service and begin depreciating it.
CIP assets can be created in the Oracle Assets module in 2 ways i.e. using the mass
additions or manual additions function. The 2 methods of adding the CIP assets are similar
to the methods previously described for the addition of normal assets.
Oracle Assets identifies invoices with distributions to CIP Clearing Accounts in Oracle
Payables, and creates mass additions from them. You can create new CIP assets from your
mass additions (i.e. invoice lines), or add them to existing assets.
ABRL Proposes to capitalize all its CIP Assets as on the date on which a store is
opened in a location
Capitalize Assets in the Asset work bench facilitates the capitalization of assets
based on the client need on a asset to asset basis.
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FA-P005: Asset Maintenance

ABRL Head Office, Finance department will centrally handle the Fixed Asset Procurement.
ABRL proposes to continue the same process as far as Asset maintenance also. It may
include any of the following activities
Revaluation of assets
Adjustment to prior year depreciation
Adjustment to the assets financial information (e.g. asset
cost, depreciation method, prorate convention etc)
Asset retirement
Asset Transfer (to different locations, cost center etc)
Capitalize CIP assets that are completely constructed etc.
Change the Asset Category of Assets For More
information refer to Adjustments - Financial and Other
Asset Information
The process flows gives an overview of the various types of maintenance processes. Each
type of process will be elaborated in greater detail in subsequent flows.
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FA-P006: Adjustments - Financial and Other Asset

Information
This process describes changes to the financial and other asset information of ABRL
Corporate Book.
Financial and Depreciation Information
After an asset has been created in the Oracle Asset module, updates can be made to the
financial and depreciation information for a single asset or a group of assets.
Before running depreciation (in the period in which you added the asset), any fields can be
changed.
However, after depreciation has been run, only the following financial and depreciation
information can be changed:
Asset cost
Salvage value
Prorate convention
Depreciation method
Life of the Asset if SLM
Capacity and unit of measure
Rate
If the asset is fully reserved, adjustments can be made to the same fields as for an asset
for which depreciation has been run. If the asset is fully retired, none of the fields can be
changed.
The user can choose whether to amortize or expense the adjustment made and Oracle
Assets passes the necessary journal entries for the same. Further these adjustments can
be identified after the current open period is closed.
Other Asset Information
Other asset information that can be changed includes:
Asset Description
Asset Category
Tag Number
Sub-components
Parent asset
Number of units
Other Asset details pertaining to manufacturer, warranty,
model etc.
As and when ABRL will change the Category of Assets, the applicable depreciation rates for
the category will automatically apply.
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FA-P007: Asset Retirement

When an asset is no longer in service, ABRL HO Finance department will retire an Asset in
the Oracle Assets module.
Assets can be fully or partially retired. Assets can be retired by units or by cost. When
assets are retired by units Oracle Assets automatically calculates the fraction of the cost
retired. When assets are retired by cost, the units remain unchanged and the cost retired
is spread evenly among all assignment lines.
Assets can be selected individually for retirement. Alternatively, the Mass Retirements
function can be used to retire a group of assets at a time. The user can specify the
selection criteria for the assets to be mass retired. These election criteria include:
Asset category
Asset key
Location
Employee
Asset number range
Date placed in service range
For assets with sub-components, the user can also elect to automatically retire the subcomponents along with the parent asset.
When performing a mass retirement, Oracle Assets automatically runs the Mass
Retirements Report and the Mass Retirements Exception Report. The user can review these
reports, perform a mass reinstatement, or adjust an individual retirement transaction if
necessary.
For individual retirements, the details of Proceeds of Sale and Cost of Removal (of the
asset) can be entered into the system. When Mass Retirements is used, the total proceeds
of sale and/or the total cost of removal amounts will be entered into the system. Oracle
Assets then prorates the total amounts over the assets being retired according to each
asset's current cost.
ABRL has a requirement to capture the capital gain on Disposal of Assets.
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FA-P008: Asset Transfer

Several types of transfers can occur to existing assets in ABRL such as transfer to various
locations etc. Transfers can take place between locations, depreciation expense accounts or
employees.
A transfer form is used to start the transfer process. The requester completes the transfer
form and obtains the necessary approval. The signed approval form is submitted to the
Fixed Assets Manager that processes the request.
Transfers can be performed for individual assets or a group of assets. Where mass
transfers are executed, the Fixed Asset user can run the Mass Transfers Preview report to
preview the expected effects of the Mass Transfer before it is actually executed. If
necessary, the Fixed Asset user can update the parameters and run the preview report
again before actually affecting the transfer.
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FA-P009: Manage Construction in Progress Assets

ABRL HO will maintain CIP Assets. After CIP assets are entered in Oracle Assets, they are
built up over a period of time.
As payments are made for the CIP asset, supplier invoices will be received and processed
in Oracle Payables. These invoice details will be transferred to Oracle Assets electronically
via the Mass Addition process. In Oracle Assets, these mass addition lines (i.e. invoice
lines) can be added to the existing CIP assets to reflect the building up of the CIP assets
cost.
Similarly, invoice lines that have already been assigned to a CIP asset can be deleted or
modified. These invoice lines can also be transferred to another CIP asset if necessary.
Once the CIP asset is completely constructed, it will be capitalized and placed in service
as an asset. From this point on, the asset will start depreciating and continue to be tracked
as a normal asset.
ABRL will have the store opening date as the date for capitalizing its CIP Assets
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FA-P010: Depreciate Assets

ABRL HO, Finance department Propose to maintain two Books, Corporate book to calculate
depreciation as per Companies Act 1956, and to calculate depreciation amounts for all
assets within a book for a period as per Income Tax Act. As Already noted in the earlier
part of the document, Depreciation Amounts will reflect the Depreciation policy of ABRL
namely Flat rates based depreciation.
At month end, the Fixed Asset user will ensure that all necessary asset maintenance
transactions for that month have been completed (i.e. asset adjustments, transfers,
retirements/ disposals, capitalization of CIP assets etc).
The user will also ensure that all new asset creations by mass additions or manual
additions have been completed.
If necessary, run the Depreciation Projection report to review projected depreciation
expense for assets in each book.
When the review is completed and all data is correct, run the Depreciation function to
process all assets in a book for a period.
It is important to note that Oracle Assets automatically closes the current period and opens
the next for the book after calculating depreciation. Once depreciation is run, and the
current period is closed, all further changes or adjustments to the assets will affect the
General Ledger in the next period. It is not possible to reopen an accounting period in the
Fixed Assets module.
The Prorate date basis would be Daily for all the asset categories. Retirement Convention
will be the same as prorate convention. Hence depreciation would be calculated from the
date the asset is put in to service.
Run Depreciation for the period. Depreciation can be run any number of times. However no
activities can be done in Fixed Assets for the period once depreciation is run and period is
closed. Navigation is
The Following Accounting entries are generated in FA for Depreciation
Accounting Event
Depreciation
Account Head Debit
Depreciation A/C
To Accumulated Depreciation A/C
Credit
10
10
For Income Tax purpose, Depreciation on asset is calculated on the Written down Value for
the Block of Asset. 100% of depreciation is calculated if the asset is purchased between
1st April and 30th September and 50% of eligible depreciation if asset is purchased
between 1st October and 31st March.
For the above purposes date placed in Service is the date on which the assets are
capitalized and the Depreciation Calculations are done accordingly.
For calculating depreciation as per Income Tax Act, users need to manually run the
program Income Tax Act Fixed Asset Schedule
Please note that India-Income Tax Depreciation is only a report and no accounting entries
are passed in the system.
ABRL HO requires adjusting the cenvat recovery on Capital Goods at the applicable rates
for the assets.
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FA-P011: Period Close Process

ABRL Plans to follow a Period close Process for its fixed assets on a monthly basis
Once all the activities of assets are confirmed for the Accounting period and depreciation
amount has been reviewed and found correct then that period can be closed and
accounting entries can be transferred into the general ledger. Accounting period can be
closed by clicking the Close Period Box in Depreciation form.
Please note that you cannot open the next period without closing the current period
Navigation: Oracle Fixed Assets> Depreciation> Run Depreciation
Run the Create Accounting program to generate the journal entries and for transferring
the same to General Ledger. Please refer to the Close Accounting Period Process Flow
Diagram
ABRL Proposes to Use April to March as their Fiscal Year.
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Close Accounting Period
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Key Reporting Requirements of ABRL
Asset Listing by Period: To track assets for a specified period for internal
management purposes.
Assets Register Report: To get a snapshot of any asset.
Asset by Category Report: To find and review the entire asset in an asset
category.
Expensed Property Report: To find all expensed assets
Fully Reserved Assets Report: TO find the assets that became fully
depreciated in a range of accounting periods
Asset Addition Report: To find the detail of asset added in that period
Asset Schedule VI in accordance with Companies Act, 1956
Asset Retirement Report: To Find the retired asset for that period
Asset Transfer Report: To find the list of assets transferred from one
location, Employee to another.
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FA-P012: Create Accounting

After the depreciation run is completed, ABRL Finance department need to create journal
entries to reflect the depreciation expense, asset cost, transfers and other accounts. When
the Create Accounting Concurrent Program is run, the Oracle Assets module will
automatically create transaction journal entries and then transfer them to the Oracle
General Ledger.
Oracle Assets Facilitates Online Creation of Accounting for FA Transactions without the
period being closed.
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Open and Closed Issues

Open Issues
ID
Issue
Resolution
Responsibility
Target
Date
Impact Date
Closed Issues
ID
Issue
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Resolution
Responsibility
Target
Date
Page
Impact Date
37

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AIM

BP.080 - FUTURE PROCESS MODEL

Swarup Ghosal Chaudhary, Project Manager

Confidential for Internal use only

Oracle 11.5.10.2 Implementation Project

Lead Consultant, Wipro Infotech

Company Confidential - For internal use only

Oracle 11.5.10.2 Implementation Project

Company Confidential - For internal use only

Oracle 12.0.5 Implementation Project

Document Scope and Assumptions

Company Confidential - For internal use only

Oracle 12.0.5 Implementation Project

Key Issues Highlighted /Observed

Matching of PO/GRN against Invoice and Fixed Asset is performed manually.

In ABRL, Depreciation under Income Tax are calculated separately in Excel

ABRL Capex procurement, Invoicing, payment and capitalization process is

Transfer of Asset related financial information namely Asset cost and

Key Business Process Improvement

Invoice details will be transferred electronically from the Accounts Payable

Actual depreciation will be automatically calculated by the system monthly.

Depreciation expense can be assigned to relevant cost centers.

Company Confidential - For internal use only

Oracle 12.0.5 Implementation Project

Future Business Model

Company Confidential - For internal use only

Oracle 12.0.5 Implementation Project

Asset Category Flex field

The Asset Location Flex field

The Asset Key Flex field

Prorate Convention/Retirement Convention.

Physical Verification of Assets

Company Confidential - For internal use only

Oracle 12.0.5 Implementation Project

Fixed Assets Process

Company Confidential - For internal use only

Oracle 12.0.5 Implementation Project

Event Catalog for Fixed Assets

Creation of Fixed Assets

Depreciate Fixed Assets

Period Close Process

Define Book Control

Defining Flex Fields

Create fixed assets in the Assets module.

Creation of Asset Flex fields

Company Confidential - For internal use only

Once at the time of

Oracle 12.0.5 Implementation Project

Process Descriptions for Fixed Assets

Prepare Mass Additions

Post Mass Additions

Enter CIP Asset

Perform Asset Adjustments Financial Information

This process describes adjustments to financial information of assets.

Manage CIP Asset

Period Close Process

Period Close process in Oracle Fixed Assets

Company Confidential - For internal use only

Oracle 12.0.5 Implementation Project

Fixed Assets Future Process Flow in Application

Company Confidential - For internal use only

Oracle 12.0.5 Implementation Project