R12.2 Oracle Fixed Assets - Discovery At 14.09.2023 Tuesday, 19 September 2023 1 Fixed Assets – Current Status • There are currently 4 Fixed Asset Registers: • • • • Property Vehicles ICT Other Furniture and Equipment • All registers are held on spreadsheets. • Each spreadsheet has a different process to hold asset costs and calculate depreciation • Depreciation is calculated yearly and processed in EBS via a General Ledger Journal Tuesday, 19 September 2023 2 Fixed Assets – Business Requirement • To migrate the 4 Fixed Asset Registers to Oracle EBS • Benefits • Visibility of the Fixed Assets • A standard process for processing and reporting Fixed Assets • Simplifies the asset management and accounting complexities Tuesday, 19 September 2023 3 Fixed Asset –Discovery • Work has been done to date to identify Asset Categories for Fixed Assets EBS configuration • Work will need to be done to clarify those requirements and identify gaps Tuesday, 19 September 2023 4 Fixed Assets – Pre-Requisites • Currently Fixed Assets are depreciated differently for each Category of Assets • The requirement is for this to change and for assets to be depreciated from date placed in service. • This change triggers a financial impact for the following • The Accounting method for reporting Fixed Assets and Depreciation in the financial accounting notes to the accounts needs to be agreed • Will/Can the change for some assets use the incremental approach i.e. assets acquired after the change will be in the new method while depreciating the old assets under the old method • What is the materiality of the approach. If the value is over £5m this needs to be reported. Tuesday, 19 September 2023 5 Fixed Assets – Pre-Requisites • Cleansing of the data to ensure the required fields in each of the 4 spreadsheets contain the correct information • To agree: • one Asset Book is required for all Fixed Assets • The Category flexfields of Major and Minor Categories and map to spreadsheet data • Location Flexfield values and map to spreadsheet data • Key Flexfield values Tuesday, 19 September 2023 6 Fixed Assets - Design • To identify requirements for Major and Minor Categories, Location and Key Flexfields • To confirm Deprecation for each Minor Category • Agree Prorate Convention and Prorate Date to determine depreciation to take in the first and last years of the asset life • To agree asset accounting for cost, depreciation expense etc • To discuss the process of: • Mass Additions through Payables. • Web ADI includes the ability to create assets. This allows for the import of data from Excel spreadsheets • To identify requirements for • DFFs e.g. to capture the Vehicle Reg No • Quickcodes for Asset Description Tuesday, 19 September 2023 7 Fixed Assets-Book Controls • Book Name: LPA CORP BOOK • Accounting rules • Natural Accounts Tuesday, 19 September 2023 8 Fixed Asset – Quickcodes • Quickcodes can be set up against the asset description field. • The quickcode allows you to choose from a list of values the description against the asset. This allows for standardisation against the description • The field still allows for free text • Use example – Vehicles description Tuesday, 19 September 2023 9 Fixed Assets-Major and Minor Categories • Confirmation of Major and Minor Categories • Confirmation of all elements for Major and Minor Category set up Tuesday, 19 September 2023 10 Fixed Assets – Additional Asset Information • Asset Descriptive Flexfields (DFFs) • Set up descriptive flexfields against the asset category to collect extra information about your asset e.g Vehicle Reg Numbers Tuesday, 19 September 2023 11 Fixed Assets-Locations • Current Configuration includes • District • Town • Postcode Tuesday, 19 September 2023 12 Fixed Assets-Asset Key • Purpose – The Asset Key Flexfield is used to group assets by non-financial information. It is designed to record the information you want, and you can assign the same asset key to many assets to easily find similar assets. Asset Key flexfields provide a means to capture a key such as a part number, job code, Project code or an account code. Each segment can have a meaning • Requirements? • Current Configuration – Review current configuration? Note: Project code could be for CIP asset costs to enable you to view CIP assets for the same project Tuesday, 19 September 2023 13 Fixed Assets-Depn and Prorate Calendars • Oracle Fixed Assets uses the depreciation method and life to determine the depreciation over the life of the asset • Prorate calendar/convention • Determines depreciation in the first and last year of an asset’s life, based on when the asset is placed in service. Assets can be acquired at any time in a period. The Prorate convention determines when the asset is depreciated from i.e. current month or next month Tuesday, 19 September 2023 14 Fixed AssetsDepn and Prorate Calendars Tuesday, September 19, 2023 Asset Depreciation Protocol Vehicles No depreciation in the first year of date in service. Depreciation starts next year ICT Full year is charged for the first year regardless of date in service Other Furniture and Equipment No depreciation in the first year of date in service. Depreciation starts next year Property Full year is charged for the first year regardless of date in service 15 Fixed Assets - Next steps • Business to review Asset Categories spreadsheet and confirm • list is complete. • Any new Minor Categories. • Remove Categories not required • Accounting is correct for each accounting combination for posting of assets • Review requirements for Locations and value sets. Supply details of the lists • Review requirements for Asset Key Flexfield. Supply details of the lists • Any DFF requirements. Supply details • Set up next session – Data Migration, Fixed Asset Reponsibility requirements Tuesday, 19 September 2023 16 Appendix Tuesday, 19 September 2023 17 Key Flexfield Segment – Validation not required Not a required field with no value set = Free text field Tuesday, 19 September 2023 18 Asset Category DFF Tuesday, 19 September 2023 19 Data Migration – Accumulated Depreciation • You normally enter zero accumulated depreciation for new capitalized assets. • If you are adding an asset that you have already depreciated, you can enter the accumulated depreciation as of the last depreciation run date for this book, or let Oracle Assets calculate it for you. If you enter a value other than zero, Oracle Assets uses that amount as the accumulated depreciation as of the last depreciation run date. If you have bonus reserve, the amount should be added to the accumulated depreciation and is no longer tracked as bonus reserve. • If you enter too little accumulated depreciation, Oracle Assets adjusts depreciation to the correct amount for the current fiscal year. If you enter too much accumulated depreciation, the asset becomes fully reserved before the end of its life. If you enter zero accumulated depreciation, Oracle Assets calculates the accumulated depreciation and the bonus reserve, if any, based on the date placed in service. You can have a different accumulated depreciation for each depreciation book. Enter the amount of depreciation taken in the current fiscal year, if any, for the year-to-date depreciation. If the asset is placed in service in the current fiscal year, the accumulated depreciation amount and the year-to-date depreciation amount must be the same. For Oracle Assets to recognize an asset as fully reserved when you add it, enter an accumulated depreciation amount equal to the recoverable cost. You cannot change the accumulated depreciation after the period in which you added the asset. You can, however, change the depreciation taken for prior fiscal years in your tax books using the Tax Reserve Adjustments window. You cannot enter year-to-date or life-todate depreciation when you add a units of production asset. Instead, enter the asset with zero accumulated depreciation, and enter the total life-to-date production as production for the current period to catch up depreciation. Tuesday, 19 September 2023 20