IMPAIRMENTS WHITE PAPER v2 PDF

ORACLE APPLICATIONS
WHITE PAPER
IMPAIRMENTS
Release 11i
September 2007
Impairments White Paper 1

Oracle/Client Confidential – For internal use only
Contributors
Name Position
Octavian-Nucu Modiga Senior Support Engineer, Fixed Assets Support, Bucharest
Change Record
Change Reference

Contents
INTRODUCTION ............................................................................................................................. 4
OBJECTIVE ............................................................................................................................................ 4
SCOPE ..................................................................................................................................................... 4
BACKGROUND .................................................................................................................................... 4
DEFINITIONS .................................................................................................................................... 5
IMPAIRMENTS APPLICABILITY ..................................................................................... 6
THE BIG PICTURE ........................................................................................................................ 7
IMPAIRMENTS SETUP .............................................................................................................. 8
DEFINE CASH GENERATING UNITS .......................................................................................... 8
ASSIGN CASH GENERATING UNITS.......................................................................................... 9
SETUP IMPAIRMENT ACCOUNTS .............................................................................................. 11
IMPAIRMENTS WORKFLOW ........................................................................................... 12
IMPAIRMENT TRANSACTIONS ................................................................................................... 12
IMPAIRMENT ACCOUNTING METHODS ................................................................................ 20
IMPAIRMENT JOURNALS .............................................................................................................. 27
IMPAIRMENT REPORTS ....................................................................................................... 30
ASSET IMPAIRMENTS REPORT .................................................................................................. 30
LIST ASSETS BY CASH GENERATING UNIT ....................................................................... 31
LOADING IMPAIRMENTS DATA ................................................................................... 32

INTRODUCTION
Objective
The purpose of this document is to provide an overview of the
Impairments feature in Oracle Assets. Impairment functionality is
available from 11i, FA.P and rollup patch 4970145 and it enables
users to calculate and account impairment losses when carrying
amounts of the assets exceed their recoverable amount. This
document will instruct users how to setup the Impairment
functionality and how to use different Impairment methods.
This document describes the solution design to meet the
requirements of the International Accounting Standard (IAS) 36
Impairment of Assets as well as the Japanese Asset Impairment
needs.
Scope
This paper will cover the functional and technical side of
Impairments functionality. It will describe the Impairments
terminology, the steps to setup the Impairments, how to perform
Impairments transactions, different methods of Impairments and the
current Impairment reports. Also will be presented the mandatory
information for uploading Impairment data to the interface.
Background
Impairments process consists in three separate programs: Upload
Impairments, Process Impairments and Rollback Impairments.
Upload Impairments will insert the Impairments details from
WebAdi spreadsheets to the Interface table FA_IMPAIRMENTS.
This can be done also with scripts from external data following the
required data that needs to be inserted to this table. Post Impairments
will generate the Impairment transactions to the assets while
Rollback Impairments will remove the Impairments transactions for
the assets.

DEFINITIONS
Impairments Definition
Impairment represents a loss of the assets that happens when
carrying amount of the asset exceeds its recoverable amount.
Impairments Loss
Impairment loss is the amount by which the carrying amount of the
asset or a Cash Generating Unit exceeds its recoverable amount. The
impairment loss is an expense in the income statement (unless it
relates to a revalued asset where the value changes are recognized
directly in equity).
Carrying Amount
Carrying amount represents the amount at which an asset is
recognized in the balance sheet after deducting the accumulated
depreciation and accumulated depreciation losses. Carrying amount
of the asset is also known as NBV of the asset up to date.
Recoverable Amount
Recoverable Amount represents the higher of the asset’s Fair Value

less cost to sell (some time called Net Selling Price) and its Value in
Use.
Fair Value or Net Selling Price
Fair Value is the amount obtainable from sale of an asset in a

bargained transaction between knowledgeable, willing parties. It can
be considered as the market value of the asset.
Value in Use
Value in Use is the discounted present value of the estimated future

cash flows expected to arise from:
- Continuing use of the asset and
- Asset disposal at the end of its normal life
Cash Generating Unit (CGU)
Cash Generating Unit is the smallest identifiable group of assets that:

- Generates cash inflows from continuous use, and
- That is largely independent of the cash inflows from other assets
or group of assets.
IMPAIRMENTS APPLICABILITY
IAS36 Impairments applies to all assets except: [IAS 36.2]
- Inventories (see IAS 2)
- Assets arising from construction contracts (see IAS 11)
- Deferred tax assets (see IAS 12)
- Assets arising from employee benefits (see IAS 19)
- Financial assets (see IAS 39)
- Investment property carried at fair value (see IAS 40)
- Certain agricultural assets carried at fair value (see IAS 41)
- Insurance contract assets (see IFRS 41)
- Assets held for sale (see IFRS 5)
Therefore, IAS 36 applies to (among other assets):
- Land
- Buildings
- Machinery and Equipment
- Investment Property carried at cost
- Intangible assets
- Goodwill
- Investments in subsidiaries, associates and joint ventures
- Assets carried at revalued amounts under IAS 16 and IAS 38

THE BIG PICTURE
Data can come to Impairment functionality of Oracle Assets via
FA_IMPAIRMENTS table from the following sources: as upload of
WebAdi spreadsheet file or from external sources directly to table.
Once that the data is in the FA_IMPAIRMENTS table (it is uploaded
to the interface), the user needs to review if it needs to be updated or
deleted. If the data is ok then it is posted to the assets and the
Impairments transaction is performed. Optionally the Impairments
transaction can be reverted in the posting period through Rollback
Impairments process.

IMPAIRMENTS SETUP
Define Cash Generating Units

The first step in setting up Impairments is to define the Cash
Generating Units. The CGUs needs to be defined based on the cash
inflow criteria for each unit.
From Oracle Assets Navigator, select the navigation path:

Setup > Asset System > Cash Generating Units
This navigation path will open the Define Cash Generating Units
form, FAXSUCGU.
Create Cash Generating Units
To create a Cash Generating Unit, you will have to do the following

steps:
1. Select from Book LOV the book name for which you want
define the CGU.
2. Add the Impairment CGU by entering the Cash Generating Unit
name and Description.
3. Save the work.

Query Cash Generating Units
To query the existing CGUs of a specific book, do the following:
1. Select the book from Book LOV.
2. Place the cursor on the CGU level and use F11 – Ctrl+F11 to
query the existing CGU(s).
You can inactivate a specific CGU by pressing Disable flag and

saving the work. Then this CGU and its assets cannot be used for
future Impairment transactions.
Note: Cash Generating Units information is inserted and kept in the

FA_CASH_GEN_UNITS table.
Assign Cash Generating Units

There are two ways of assigning Cash Generating Units: as manual
assignment to each asset or as mass assignment using WebAdi
functionality.
Note: assigning Cash Generating Units represents an adjustment
transaction that will add the value of CGU id in the
FA_BOOKS.CASH_GENERATING_UNIT_ID column. Do NOT
update this column since the transaction has to contain details in
FA_TRANSACTION_HEADERS and FA_ADJUSTMENTS tables.
Manual Assignment
To be able to create and process Impairment transactions, the defined
Cash Generating Units need to be assigned to the assets. By manual
assignment for each asset should be picked the Cash Generating Unit
that it should be part of.

To manually assign the Cash Generating Unit to the existing assets,
perform the following steps:
1. Go to Asset Workbench form by using the following navigation
path:
Assets > Asset Workbench
2. Query for existing asset(s).
3. Press Books button and select the Book from LOV.
4. Go to Impairment tab and pick from LOV the previously defined
Cash Generating Unit.
5. Save the work.
WebAdi CGUs Assignment
Cash Generating Units can be assigned using the WebAdi tool

adapted for Impairment functionality.
To assign the Cash Generating Units to the existing assets, perform

the following steps:
1. Go to the Assign Cash Generating Units spreadsheet by the next

path:
Assets > Impairment > Assign Cash Generating Units
Note: Don’t forget to select Enable Macros when spreadsheet will be
loaded.
2. In the open spreadsheet enter the following data:
Book: Select from LOV the existing book for which you want to
assign the CGUs to its assets. This is a mandatory field that needs to
be selected.

Asset Number: Select from LOV each asset number that you want
to attach the Cash Generating Unit. This is a mandatory field since
the CGUs needs to be added at the asset level.
Cash Generating Unit: Select from LOV the Cash Generating Unit
for each asset. This is a mandatory field also.
3. Upload the assignments to the assets by following the next path:
From the main toolbar go Oracle > Upload and a form called Upload
Parameters will be open.
After confirming the parameters, you can press Upload button.
Setup Impairment Accounts

Impairment transaction requires that the accounting information to
be sent to General Ledger, so that Impairment Loss to be included in
the Profit and Loss Account / Income Statement. There are two
Impairment accounts: Impairment Expense and Accumulated
Impairment.
To define the Impairment accounts, perform the following steps:
1. Go to Asset Categories form by the next path:

Setup > Asset System > Asset Categories
2. Query for the existing Category Combination using F11 –
Ctrl+F11 search tool.
3. Place the cursor on one of the fields under General Ledger
Account’s tab and query for the book using again F11 –
Ctrl+F11 search tool.
4. Enter the accounting combination for Impairment Expense and
Accumulated Impairment fields.
5. Save the work.
IMPAIRMENTS WORKFLOW
The Impairments Workflow chapter will present the transactions that

can be made with Impairments functionality and within the
transactions will be showed the different accounting methods of
using them.
Impairment Transactions
Overview of Impairment transactions
As Impairment Transactions will be considered the following:
- Create Impairments;
- Adjust/Update Impairments;
- Post Impairments;
- Rollback Impairments;
- Delete Impairments;
Impairment Statuses
Each Impairment line has a Status according to the transactions you

perform for Impairments. The following table describes each Oracle
Assets Impairment Status.
Status Definition Set by
New New Impairments Created by Oracle

line created. Assets user when the
Impairment is created
or when Impairments
data are uploaded.
Preview Impairments line Created by Oracle
status that is ready to Assets user when the
be Previewed. Impairment is created
or when Impairments
data are uploaded.
Previewed Impairment status Set by Oracle Upload
that shows that the process through
line is ready for Process Impairments
posting. request.

Status Definition Set by
Post Intermediary status Set by Oracle Post
while posting the process through
Impairments. Process Impairments
request
Posted Status that shows that Set by Oracle Post
Impairments were process through
successfully posted Process Impairments
to the assets. request
Posting Failed Impairment status Set by Oracle Post
that is used when process through
Impairments failed to Process Impairments
be posted to the request
assets.
Delete Intermediary status Set by Oracle Delete
while Deleting the process through
request
Deleted Impairment status Set by Oracle
that is used when Rollback process
Impairments are through Process
Rollbacked. Impairments request.
Running Allocation Intermediary status Set by Oracle Update
while uploading the Allocation process
Impairments through Process
Allocation. Impairments request.
Running Intermediary status Set by Oracle Upload
Depreciation while uploading the process through
request.
Depreciation Failed Impairments status Set by Oracle Upload
that is used during process through
Upload process when Process Impairments
the Depreciation request.
calculation fails.

Create Impairments
In order to create Impairments transactions, the following steps need
to be performed:
1. Go to Create and Post Impairments form by the next path:

Assets > Impairments > Create and Post
3. Press New Impairment button.
4. A Web ADI popup will be open that will ask if you want to open
this file. From the available options chose Open.
5. A new question will ask you whether if you want to open the file
with macros. Chose Enable Macros option. After this step the
Impairments spreadsheet will be open.
6. Add the mandatory fields for header (Book, Impairment Name
and Impairment Date) and Impairment detail information (Status,
Cash Generating Unit / Asset Number, Net Selling Price, Value
in Use, Impairment Loss, Goodwill and optionally Comments).
7. From the main menu go to Oracle > Upload for uploading the
Preview/New impairments.

8. Process Impairments request will be fired. Verify that it
successfully completes.
*Note: When you upload the Impairments in status Preview, the new
status generated will be Previewed.
*Attention. Impairment are Amortized transactions and accordingly

to Oracle Assets standard functionality you cannot perform anymore
an Expensed transaction once that you performed an Amortized one
but only Amortized transactions. For Impairments Amortization
Start Date will be the same as Impairment Date.
*Note that Impairments can be created in two ways:

1. For each asset by entering/selecting the Asset Number from LOV
and the Impairments information will be provided for each asset.

2. To the Cash Generating Unit level by entering this information.
For this situation the Impairment Expense is calculated and
distributed proportionally to the assets of Cash Generating Unit
accordingly to their Cost and NBV.
Update Impairments
Reviewing the Impairments is necessary to check their information
before posting. If the Impairments were created with status New then
it is necessary to update them with status Preview in order to be able
to post them. Only Impairments that are Previewed can be posted.
Also with Update Impairments options you can change other data
like Impairment Data, Net Selling Price, Value in Use, Impairment
Loss or Comments information.
In order to Update the Impairments perform the following steps:

2. Enter the query criteria: Book, Cash-Generating Unit,
Impairment Name, Asset Number, Impairment Date and Status.
Press Go button.
3. For the row that you need to alter, press Update Impairment
button.
4. A Web ADI popup will be open that will ask if you want to open
this file. From the available options chose Open.
5. A new question will ask you whether if you want to open the file
with macros. Chose Enable Macros option. After this step the
Impairments spreadsheet will be open.
6. Change the data that you need.
7. From the main menu go to Oracle > Upload for uploading the
changes to the interface.
Post Impairments
After the Impairments were reviewed and when you want to post
them to the system, the following steps needs to be done:
Press Go button.
3. Use the Select flag to check the Impairments and then press Post
button.
4. You will be asked to confirm the posting. Press Yes button if you
want to Post the Impairment(s).

Rollback Impairments
An impairment transaction can be rollbacked only in the period that
it is posted.
To rollback the Impairments the following steps need to be
performed:

Press Go button.
3. Use the Select flag to check the Impairments and then press
Rollback button.
4. You will be asked to confirm the Rollback. Press Yes button if
you want to Rollback the Impairment(s).
*Note that once that you rollback an Impairment transaction, that
transaction cannot be posted again.
Delete Impairments
To delete the Impairments, do the next steps:

Press Go button.
3. Use the Select flag to check the Impairments and then press
Delete button.
4. You will be asked to confirm the deletion. Press Yes button if
you want to Delete the Impairment(s).
Process Impairments request will be fired. Verify that it successfully
completes.
View Impairments
Impairment information regarding YTD Impairment and
Accumulated Impairment can be seen to each asset in Asset
Workbench form.
To be able to see this information perform the following steps:
1. Go to Asset Workbench form by the next path:

Assets > Asset Workbench
2. Enter the query criteria for the impaired asset and press Find
button.
3. Press Books button and select the Book name from LOV.
4. Go to the Impairment tab. This will show the following
Impairments information of this asset: Accumulated Impairment,
YTD Impairment and Cash Generating Unit that was previously
attached.
How Impairment Loss is calculated
As was previously defined, Impairments occurs when:
Carrying amount (or NBV) > higher (Value in Use, Net Selling
Price)
Based on this, the Impairment Expense or Impairment Loss is

calculated as can be seen in the next picture.
Cost
Depreciation
reserve
Impairment
Expense
Fair Value
Carrying
amount/NBV Value in Use
IMPAIRMEN LOSS = NBV – HIGHER (FAIR VALUE; VALUE IN USE)

*Note that the calculation formula is the same no matter the level
(asset or Cash Generating Unit) on which it is made. If the
Impairment transaction is performed at the Cash Generating Unit
level, then the NBV, Fair Value (or Net Selling Price), Value in Use
and Impairment Loss is calculated as sum of the assets’ values that
belongs to this Cash Generating Unit. Then Impairment Loss is
distributed to each asset upon NBV of each asset.
Attention: NBV includes the depreciation amount of the period

where Impairment Date is entered.
*Note: There are two more factors that influence the calculation of
Carrying Amount (NBV) than Depreciation Reserve and they are:
- Salvage Value
- Previous Impairment Expense (Accumulated Impairment)
So NBV calculation formula looks like:
NBV = Cost – Salvage Value - Depreciation Reserve - Accumulated

Impairment
When Revaluation Reserve occurred for an asset, the Impairment

Loss calculated is decreased with this Revaluation Reserve amount.
The resulted amount will be the Impairment Loss Expensed.

Impairment Accounting Methods
There are several methods of handling the Impairments calculations

and transactions that can be used accordingly to the law and business
requirements.
These methods are:
1. Calculate Impairment Loss using Fair Value (Net Selling Price)
or Value in Use for the asset.
2. Calculate Impairment Loss using both Fair Value (Net Selling
Price) and Value in Use for the asset.
3. Using known value of Impairment Loss.
4. Reversing the Impairment Loss in a future period.
*Note that for all the methods, except the third one, Impairment Loss
is calculated as the above formula.
Initial data for all the Impairments transactions:
A. Asset Addition
Asset Setup Item Asset Setup Information

Book Type Code TAVI CORP 01
Asset Numbers 103762, 103763, 103764, 103766
Method STL 3Y
Cost 5000
Addition Period FEB-2001
DPIS 01-JAN-2001
Prorate Date 01-JAN-2001
Depreciate Y
Divide Depreciation Evenly
Depreciation has been run until MAY-05.
B. Current Asset Data
Asset Item Asset Information

Cost 5000
Depreciation Reserve 555.56
Monthly Depreciation 138.89

Calculate Impairment Loss using Fair Value (Net Selling Price)
or Value in Use for the asset
This method contains two ways of handling it: either uses the Fair
Value (Net Selling Price) or either uses the Value in Use when
entering the Impairment transaction.
The method consists on the following transaction details and

calculations:
A. Using Fair Value (Net Selling Price)
Impairment transaction
Impairment Item Impairment Value

Book TAVI CORP 01
Impairment Name IAS 36 Impairment
Impairment Date 01-May-2001
Status Preview
Asset Number 103762
Fair Value (Net Selling Price) 3000
The impairment line is uploaded to the interface and posted to the

asset.
Impairment Calculations
Carrying Amount (NBV) = Cost – (Acc Deprn + Current Period

Depreciation) – Previously Impairment
Expense
= 5000 – 694.45 –0 = 4305.55
Carrying Amount > Net Selling Price and therefore Impairment

Expense is calculated as:
Impairment Expense = Carrying amount – Net Selling Price

= 4305.55 – 3000 = 1305.55
Adjusted Cost will be equal with Net Selling Price (3000) and will
depreciate over the remaining life of the asset.
Monthly Depreciation = Adjusted Cost / Remaining life in years

= 3000 / 31 = 96.77

B. Using Fair Value

Book TAVI CORP 01
Status Preview
Asset Number 103763
Value in Use 3000

asset.
Carrying Amount (NBV) = Cost – (Acc Deprn + Current Period

Depreciation) – Previously Impairment
Expense
= 5000 – 694.45 –0 = 4305.55
Carrying Amount > Value in Use and therefore Impairment

Expense is calculated as:
Impairment Expense = Carrying amount – Value in Use

= 4305.55 – 3000 = 1305.55
Adjusted Cost will be equal with Value in Use (3000) and will
depreciate over the remaining life of the asset.

= 3000 / 31 = 96.77

Calculate Impairment Loss using both Fair Value (Net Selling
Price) and Value in Use for the asset
As the name tells, this method applies when you are using in the
same time the Fair Value and the Value in Use for the asset or for the
Cash Generating Unit.

calculations:

Book TAVI CORP 01
Status Preview
Asset Number 103766
Value in Use 2800
Net Selling Price 3500

asset.
Carrying Amount = Cost – (Acc Deprn + Current Period Deprn) –

Previously Impairment Expense
= 5000 – 694.45 –0 = 4305.55
Carrying amount > Max (Value in Use, Net Selling Price) and
therefore the Impairment Expense is calculated as:
Impairment Expense = Carrying amount – Net Selling Price

= 4305.55 – 3500 = 805.55
Adjusted Cost will be equal with Max (Value in Use, Net Selling
Price) = 3500 and will depreciate over the remaining life of the asset.

= 3500 / 31 = 112.9

Using known value of Impairment Loss
Using this method means that you already know Impairment Loss
amount and you want to use it directly without the system to
calculate it.

calculations:

Book TAVI CORP 01
Status Preview
Asset Number 103764
Impairment Expense 1000

asset.
Adjusted Cost = Cost – (Acc Deprn + Current Period Deprn) –

Impairment Loss
= 5000 – 694.45 – 1000 = 3305.55

= 3305.55 / 31 = 106.63

Reversing the Impairment Loss in a future period
There are two ways of reversing the Impairment transaction:
- In the transaction period. For this situation the Impairment can be
rollback as was shown to the Transaction Types chapter.
- In the future period when it is find out that the Value in Use
and/or Net Selling Price have a different value.
Reversing the Impairment in the future period can be made by:
- Reverse the previous Impairment by Actualizing the asset

information in the future current period as result of the change in
Value in Use and/or Net Selling Price
Current Asset Data before the reversal
Asset Item Asset Information

Current Period Counter AUG-2001
Asset Numbers 103762, 103763
Cost 5000
Depreciation Reserve 984.76
Monthly Depreciation 96.77
Previous Impairment Expense 1305.55
Carrying Amount (NBV) 2709.69
*Note: This method can be used also when it is needed to decrease

the Impairment effect of a previous Impairment transaction and
when the Fair Value / Value in Use of the asset came back to the
residual value in the current period due to economic changes the
same as it wouldn’t be Impaired. This actualization is a response of
the economic changes regarding the Fair Value and other factors that
might impact the assets and has as result partially/totally decrease of
a previous Impairment effects.
Due to the economic changes (in our example), the Value in Use
and/or Fair Value of the asset are considered to be as they would not
have been impaired before. That means that their values for period
AUG-2001 will be equal with 3888.89 (5000 – 8 * 138.89). The
same effect will be also if using directly the Impairment Loss
amount of <1305.55 > with the Impairment Date within AUG-2001
period.
In this example will be used Value in Use and Net Selling Price.


Book TAVI CORP 01
Impairment Name IAS 36 Impairment Reversal
Impairment Date 01-Aug-2001
Status Preview
Asset Number 103763
Value in Use / Net Selling Price 3888.89

asset.
Carrying amount (NBV) = Cost – (Acc Deprn + Current Period

Deprn) – Previously Impairment
Expense
= 5000 - 984.76 - 1305.55 = 2709.69
Carrying amount < Max (Value in Use, Net Selling Price) and
therefore the Impairment Expense is calculated as:
Impairment Expense = Carrying amount – Value in Use

= 2709.69 – 3888.89 = -1179.2
Depreciation will be calculated from now on as Adjusted cost (Value

in Use) over the remaining life.
Monthly Depreciation = 3888.89 / 28 = 138.89

Impairment Journals
Under this chapter will be presented the transactions when
Impairment journals will be generated and what are they. Will be
presented also the transactions that are not supposed to generate
Impairment accounting transactions.
Impairment Addition
There are several situations when Impairment Additions Journals are
generated:
A. Regular Impairments (when no previous Revaluation Reserve

amounts exists).
The journals for this situation when an example Impairment Loss of

1000 occurred are as follows:
Dr. Impairment Expense 1000

Cr. Accumulated Impairment 1000
B. Impairment transactions that occurs after a Revaluation

transaction that generated Revaluation Reserve amount.
Taking the example of Impairment Loss of 1000 will be considered

two situations:
- When Revaluation Reserve is less than Impairment Loss. The
example amount for Revaluation Reserve is 800 and then the
accounting journals are:
Dr. Revaluation Reserve 800

- When Revaluation Reserve is higher than Impairment Loss. For

this example will be taken a Revaluation Reserve amount of
3500. The journals are:
Dr. Revaluation Reserve 1000


Adjustment, Transfers and Reclassification transactions
If these transactions are performed either before or either after the
Impairments transactions they will not generate any Impairment
journal but only their regular journals.
Revaluation transaction after Impairment
In order to see the accounting journals as result of revaluation

transaction that is performed after an Impairment transaction, will be
considered the following asset financial information.
Asset Item Amount

Cost 10000
Depreciation Reserve 3000
Impairment Reserve 500
A revaluation transaction is performed having the index of 20%. The

amounts calculated as result of this transaction are:
Asset Item Amount

Cost 12000
Revaluation Reserve 1400
The journals are:
Dr. Revaluation Cost 1500

Cr. Depreciation Reserve 600
Cr. Revaluation Reserve 900
Dr. Impairment Reserve 500

Cr. Revaluation Reserve 500
Retirement of an asset that was Impairment
Asset financial information before retirement is:
Asset Item Amount

Cost 10000
Impairment Reserve 500

Retirement transaction is performed and the journals are as follows:
Dr. Depreciation Reserve 3000

Dr. Impairment Reserve 500
Dr. NBV Retired 6500
Cr. Asset Cost 10000

IMPAIRMENT REPORTS
There are two Impairment reports that became available and will
have to be used. They are:
- Asset Impairment Report and
- List Assets by Cash Generating Unit.
Asset Impairment Report is automatically fired when Impairments

are uploaded to the interface or when they are posted.
Asset Impairments Report

Use this report to see all the Impairment transactions of the period.
When the report is fired when the Impairments are uploaded and
posted it contains only the data of the uploaded / posted Impairment
but not the other Impairment data from other transaction.
Therefore, in order to see all the data of Impairment transactions of
the period, you will have to run this report separately.
The report shows the assets that had Impairment transactions in the
selected period, assets that are grouped under their Cash Generating
Units.
You must enter a Book, Set of Books Currency and Period when you
request this report.
Optionally you can enter Impairment and Cash Generating Unit
values.
Selected Headings
Cost: The asset cost at the date of Impairment transaction.
Net Book Value: The amount that is calculated at the date of
Impairment transaction. Note that it contains the result of
Depreciation amount for the period when Impairment transaction
occurred.
Net Selling Price: The amount that was used (if any) for Net Selling
Price in the Impairments transaction for the asset.
Value in Use: The amount that was used (if any) for Value in Use in
the Impairments transaction for the asset.
Impairment Loss: The amount of Impairment loss that was either
calculated based on Net Selling Price and/or Value in Use or either
that was manually entered in the Impairment transaction.

List Assets By Cash Generating Unit
Use this report to review up to date the assets information to each
Cash Generating Unit level. With this report you can review the
Cash Generating Units and their assets before and after the
Impairment transactions.
You can decide, for example, if it is necessary to perform new
Impairments transactions at the asset or Cash Generating Unit level.
Also you can see the Impairment information regarding YTD
Impairment and Impairment reserve.
You must enter Book and Set of Books when you request this report.
Optionally you can enter Cash Generating Unit and Asset Number
information.
Selected Headings
Cost: The current asset/CGU cost.
Net Book Value: The current NBV in the moment when the report
is run.
Accumulated Impairment: The current value of Accumulated
Impairment for the asset/CGU.
YTD Impairment: The current value of YTD Impairment for the
asset/CGU.

LOADING IMPAIRMENTS DATA
Impairment transactions can be loaded to the interface table
FA_IMPAIRMENTS. The usage column in the following table
indicates whether a field is required, optional or system generated.
Column name Type Description Usage

IMPAIRMENT_ID NUMBER(15) The system-generated System-generated
impairment identification
number.
IMPAIRMENT_NAME VARCHAR2(30) The name of the Impairment Required
transaction.
DESCRIPTION VARCHAR2(240) The description of the Optional
REQUEST_ID NUMBER(15) System-generated request id System-generated
when impairment line was
uploaded, posted, adjusted,
rollbacked or deleted.
STATUS VARCHAR2(30) Current Impairment status. Required
You can upload impairments
only with New or Preview
status.
BOOK_TYPE_CODE VARCHAR2(15) Use the column for the book Required
that will receive the
Impairment transaction.
CASH_GENERATING_ NUMBER(15) The identification number for Conditionally
UNIT_ID Cash Generating Unit. If you required.
enter the value for this column
then you cannot enter the
Asset_Id information.
ASSET_ID NUMBER The identification number for Conditionally
the Asset. If using this column required.
then Cash_Generating_Unit_Id
shouldn’t be used.
NET_BOOK_VALUE NUMBER System-generated amount for System-generated
Net Book Value used as
reference in Impairment
transaction.
NET_SELLING_PRICE NUMBER The value entered for Net Conditionally
Selling Price of Asset/CGU. required.
You can use this column
and/or Value_In_Use or
Impairment_Amount.
Column name Type Description Usage
VALUE_IN_USE NUMBER The value entered for Value in Conditionally
Use of Asset/CGU. You can required.
use this column and/or
Net_Selling Price or
Impairment_Amount.
GOODWILL_ASSET_ID NUMBER(15) The system-generated asset id System-generated
for the impairments that use
Goodwill_Amount
GOODWILL_AMOUNT NUMBER The entered Goodwill amount Optional.
for the Asset/CGU.
USER_DATE DATE The extra date that the user can Optional
use as reference for the
impairment transaction.
IMPAIRMENT_DATE DATE The Impairment Date to be Required
used in the transaction.
PERIOD_COUNTER_IM NUMBER(15) The system-generated period System-generated
PAIRED counter of the impairment
transaction.
IMPAIRMENT_AMOUN NUMBER The Impairment expense Conditionally
T amount for Asset/CGU. If used required.
then Net_Selling_Price and
Value_In_Use shouldn’t be
used.
DATE_INEFFECTIVE DATE The system-generated date in System-generated
the moment when the
impairment is deleted.
CREATION_DATE DATE Standard who columns. The System-generated
date when Impairment was
created.
CREATED_BY NUMBER(15) Standard who columns. System-generated
Typically the user_id of the
person that created the
Impairment.
LAST_UPDATE_DATE DATE Standard who columns. This System-generated
date corresponds to the date a
user updated the Impairment
transaction.
LAST_UPDATED_BY NUMBER(15) Standard who columns. System-generated
The user_id of the person that
updated the transaction.
LAST_UPDATE_LOGIN NUMBER(15) Standard who columns. System-generated
The user_id of the last person
that updated the transaction.


IMPAIRMENTS WHITE PAPER v2 PDF

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

IMPAIRMENTS WHITE PAPER v2 PDF

Hochgeladen von

Copyright:

Verfügbare Formate

ORACLE APPLICATIONS

Impairments White Paper 1

Octavian-Nucu Modiga Senior Support Engineer, Fixed Assets Support, Bucharest

Impairments White Paper 2

Impairments White Paper 3

Impairments White Paper 4

Recoverable Amount represents the higher of the asset’s Fair Value

Fair Value or Net Selling Price

Fair Value is the amount obtainable from sale of an asset in a

Value in Use is the discounted present value of the estimated future

Cash Generating Unit (CGU)

Cash Generating Unit is the smallest identifiable group of assets that:

Impairments White Paper 6

Impairments White Paper 7

Define Cash Generating Units

From Oracle Assets Navigator, select the navigation path:

Create Cash Generating Units

To create a Cash Generating Unit, you will have to do the following

Impairments White Paper 8

You can inactivate a specific CGU by pressing Disable flag and

Note: Cash Generating Units information is inserted and kept in the

Assign Cash Generating Units

Impairments White Paper 9

WebAdi CGUs Assignment

Cash Generating Units can be assigned using the WebAdi tool

To assign the Cash Generating Units to the existing assets, perform

1. Go to the Assign Cash Generating Units spreadsheet by the next

Impairments White Paper 10

Setup Impairment Accounts

To define the Impairment accounts, perform the following steps:

1. Go to Asset Categories form by the next path:

The Impairments Workflow chapter will present the transactions that

Each Impairment line has a Status according to the transactions you

Status Definition Set by

New New Impairments Created by Oracle

Impairments White Paper 12

Impairments White Paper 13

1. Go to Create and Post Impairments form by the next path:

Impairments White Paper 14

*Attention. Impairment are Amortized transactions and accordingly

*Note that Impairments can be created in two ways:

Impairments White Paper 15

In order to Update the Impairments perform the following steps:

Impairments White Paper 16

1. Go to Create and Post Impairments form by the next path:

1. Go to Create and Post Impairments form by the next path:

1. Go to Asset Workbench form by the next path:

Impairments White Paper 17

How Impairment Loss is calculated

As was previously defined, Impairments occurs when:

Based on this, the Impairment Expense or Impairment Loss is

IMPAIRMEN LOSS = NBV – HIGHER (FAIR VALUE; VALUE IN USE)

Impairments White Paper 18

Attention: NBV includes the depreciation amount of the period

So NBV calculation formula looks like:

NBV = Cost – Salvage Value - Depreciation Reserve - Accumulated

When Revaluation Reserve occurred for an asset, the Impairment

Impairments White Paper 19

There are several methods of handling the Impairments calculations

Initial data for all the Impairments transactions:

Asset Setup Item Asset Setup Information

Depreciation has been run until MAY-05.