FIXED ASSETS

FIXED ASSETS

1. What is unplanned depreciation?
Answer: Unplanned depreciation is a feature used primarily to comply with special
depreciation accounting rules in Germany and the Netherlands. However, you
also can use this feature to handle unusual accounting situations in which
you need to adjust the net book value and accumulated depreciation amounts
for an asset without affecting its cost. Oracle Assets immediately updates
the YTD and LTD depreciation and the net book value of the asset. The
unplanned depreciation expense you enter must not exceed the current net
book value (Cost - Salvage Value - Accumulated Depreciation) of the asset.
2. Can depreciation be suspended for a specified period of time?
Answer: Depreciation can be suspended at any time by changing the depreciate flag
on the book form to NO. Note that the total depreciation to be taken over
the life of the asset (including that incurred in periods the flag was set
to NO) will still be taken over the original life assigned to the asset. If
the asset was added with the depreciate flag set to NO, missed depreciation
will be caught up in the period the flag is changed to YES. If the asset
was added with the depreciate flag set to YES and the flag was later changed
to NO, the missed depreciation will be caught up in the last period of the
asset's ORIGINAL life; suspending depreciation will not extend the period
over which the asset is depreciated.
The Depreciate flag can also be set at the category level.
If you set the depreciate flag at the asset level, this will override the category
depreciate flag which is the default.
If the intention is to never have the asset Depreciate then the flag Depreciate
flag should be set to 'No' for the life of the asset or the asset can be entered
into the system fully reserved.
3. Can depreciation expense be manually input to override the system?
Answer: Depreciation reserve adjustments can be made to a TAX book. From Release
10.7, with unplanned depreciation you may manually override the depreciation
amount taken in the Corporate book. The depreciation amount cannot be
greater than the net book value of the asset.
4. How does the Depreciate When Placed In Service flag on my prorate
convention affect the calculation and allocation of depreciation?
Answer: With the exception of the method type Calculated Straight Line,
depreciation for the year is calculated based on the prorate date which maps
to a prorate period and rate on the prorate calendar. This total amount is
then allocated back to the individual periods in the year. If this flag is
set to NO, the years depreciation will be spread over the periods beginning
with the prorate date. If the flag is set to YES, the years depreciation
will be spread over the periods beginning with the date placed in service.
Note that total depreciation for the year remains unchanged, only
depreciation per period will differ.
When the method type Calculated Straight Line is used, this flag has no
effect. Yearly depreciation will be calculated as recoverable cost/life,
and allocated beginning with the prorate date.
5. GAAP defines two types of changes; changes in estimates which are to be
handled prospectively and errors which are to be retroactively corrected.
What Oracle functionality addresses these?
Answer: Expense an adjustment for correction of an error, amortize the adjustment
for a change in estimate.
6. How do I set up Oracle Assets to charge a half-month's depreciation in the
first and last periods of the assets life?
Answer: You must do the following:
a. Set up a prorate CALENDAR with semi-monthly periods. So your prorate
calendar will have 24 periods per fiscal year.
Example:
Period 1: Jan 01 - Jan 15
Period 2: Jan 16 - Jan 31
Period 3: Feb 01 - Feb 15
Period 4: Feb 16 - Feb 28
Period 5: Mar 01 - Mar 15 ...

b. Set up a prorate CONVENTION that maps the appropriate dates to the
middle of the month.
Example:
Jan 01 - Jan 31 map to Jan 16
Feb 01 - Feb 28 map to Feb 16
Mar 01 - Mar 31 map to Mar 16 ...

c. Assign your book to the appropriate prorate CALENDAR in the Book
Controls form. (You will also probably want it to depreciate EVENLY).

d. Set the default prorate convention to the appropriate mid-month
convention in the Default Depreciation Rules zone of the Asset
Categories form. You can also specify the prorate CONVENTION in the
Books window during the Detail Additions process.

Now when the depreciation program processes an asset whose date placed in
service is Jan 10, it will use the prorate convention to map that date to a
PRORATE DATE of Jan 16, and it will use the prorate date to map to
PRORATE PERIOD #2 in your prorate calendar. Thus, if you are running
depreciation for January (note that your DEPRECIATION CALENDAR can still
be monthly), you will get half a month's worth of depreciation for January.

*** It is not enough to set the prorate convention to a mid-month convention -
*** you must also set the prorate CALENDAR to be semi-monthly.
7. What is the difference between the new What-If feature and the old
depreciation projections functionality?
Answer: Using What-If Analysis, you can model depreciation scenarios for any number
of future periods based on depreciation attributes different from what you
have currently set up for the asset. Hence the name: What If Analysis.

Using Depreciation Projection, you can project depreciation expense based
on the asset's current depreciation method, life, etc.

Additionally, What-If Analysis is very flexible in allowing you to select a
subset of assets for analysis. Selection criteria include Range of Asset
Numbers, Range of Dates Placed in Service, Asset Category etc. For
Depreciation Projections, you must specify a BOOK and the program selects
all active assets for that book.
8. When I run depreciation I get the following error:
"Error: function fafbgcc returned failure (called from fadoflx) Getting
account CCID"
How do I correct this problem?
Answer: Set the profile options FA:PRINT_DEBUG and FA:DEPRN SINGLE to YES and
rerun depreciation. Make note of the asset number and distribution id.
Depreciation tries to build a code combination id (CCID) for one of the
following:

Asset Cost Account/CIP Cost Acct (Current Period Asset Clearing
Account)/CIP Clearing Acct (Current Period Adds) Depreciation Expense
Account (Prior Period Additions)

Check whether Allow Dynamic Inserts is being allowed for the Accounting
Flexfield (AFF).
Navigation:
Setup -> Financials -> Flexfields -> Segments -> Key
Query for Oracle General Ledger - Accounting Flexfield
If the Allow Dynamic Inserts box is not checked, unfreeze the flexfield
definition, check the box, refreeze and Compile. If it is already checked,
that means the combination generated is not valid. To find out what
combination is being generated, do the following:

Find out which category the asset belongs to by querying for the asset in
the Asset Workbench (Navigation: Assets -> Asset Workbench). Then query for
the asset category/book combination in the Asset Categories form
(Navigation: Setup -> Asset System -> Asset Categories). Using the Help ->
Tools -> Examine function from the menu, get the following information:

Account segment value for Asset Cost/Cost Clearing accounts
(or CIP Cost/CIP Clearing accounts if asset is CIP)
Code combination id (CCID) associated with these accounts

From the Book Controls form, you need to get the Default CCID for the
book utilizing Help -> Tools -> Examine method
(N)Setup -> Asset System -> Book Controls.

From the Inquiry/Financial Information form, you need to get the
distribution CCID for the asset utilizing the same method
(N)Inquiry -> Financial Information -> Assignments form.

Once you have the parameters, in Release 11 run the script faxagtst.sql
to see what combination is getting built and why it is failing.
For details on using faxagtst.sql, see Note 1062849.6

In Release 10.7, you will need to perform a Flexbuilder Test in the
application.
(N)Setup -> Financials -> Flexfields -> Flexbuilder -> Test
9. What depreciation methods are supported within Oracle Assets?
Answer: You may choose from the following:
Straight-line
Declining balance
Sum-of-year's digits
Units of production
ACRS and MACRS
Flat rate
Diminishing value
Bonus depreciation
In Release 11i, you will also be able to create formula-based methods
for depreciation.
10. When should I run the depreciation program?
Answer: For Release 10.7 and 11:
You should run depreciation when you are ready to close your depreciation
period. Depreciation cannot be rolled back once run. Since the depreciation
program closes the period, you should make sure that you entered all your
transactions for the current period. If you forget to enter a transaction in
the current period, you can enter a retroactive addition, transfer, or
retirement transaction in the following period. Oracle Assets will not
calculate adjustments to depreciation until you run depreciation again.

For Release 11i:
You can now run Depreciation as many times as you would like without closing
the period. When you are ready to close the period, on your final
Depreciation run, you would check the Close Period button on the form.
You have the capability in 11i to rollback depreciation. So if you run
Depreciation and you do not like the results, you can rollback Depreciation,
make your changes, and submit Depreciation again. Once the final Depreciation
has been run and the period is closed, you cannot rollback Depreciation for
the period. If you are closing the last period for a fiscal year, you cannot
enter a retroactive retirement for a period after the end of the year.
11. How often can I run depreciation?
Answer: For Release 10.7 and 11:
You can run depreciation only once per depreciation period. When you run
depreciation and close the period, you cannot reopen that period. You must
run depreciation for each corporate and tax book; Oracle Assets does not run
depreciation automatically for a tax book when you run depreciation for the
associated corporate book. Run Mass Copy to update your tax book prior to
running depreciation for the tax book.

For Release 11i:
You can run Depreciation as many times as you like. When you are ready to
close the period, on your last Depreciation run, check the Close Period
box on the Run Depreciation form.
12. What happens if I run depreciation when there are retirements or
reinstatements pending?
Answer:
When you submit depreciation, the process automatically runs the Calc
Gain/Loss (FARET) program to calculate gains and losses for any pending
retirements. You also can run FARET independently in order to reduce
depreciation processing time.
13. What is the difference between depreciation projections and depreciation?
Answer: Depreciation projections use a completely separate set of modules than the
Depreciation program. Depreciation projections do not take into account
adjustments entered in the current period, so any new retirements, transfers,
or adjustments will not effect the projection. Projections simply take a
snapshot of the asset at the start date of the projection and project
depreciation expense based on that information.
14. What happens if depreciation encounters an error? How do I proceed?
Answer: For Release 10.7 and 11:
If the depreciation program encounters an error, the program will stop and
perform a rollback to the previous commit. The program automatically resets
the DEPRN_RUNNING_FLAG to NO. If the error is straight forward, such as
Out of rollback segments, you can try to correct the error and then resubmit
the depreciation program. If the error is more serious, such as an operating
system error, you should contact Support before taking any further actions.

For Release 11i:
If the Depreciation program encounters and error, it will continue to
process all of the assets. The errored assets will appear in your logfile
so that you can fix them and resubmit Depreciation. Depreciation will then
only process the corrected assets.
15. What can I do to reduce processing time for the depreciation program?
Answer: Run Calc Gain/Loss several times throughout the period (this can be run
as often as you want). Then, when you finally run depreciation, the
Calc Gain/Loss program will process only the remaining retirements or
reinstatements. Ensure that your tables are not fragmented. Ask your
database administrator (DBA) to check for fragmentation problems. If
fragmentation exists, have the DBA export and reimport the tables, or
recreate them.

For Release 11 and 11i:
In addition to running Calculate Gains and Losses throughout the period,
run the Generate Accounts program before running Depreciation (N)Other
-> Requests -> Run. This will create the new code combinations needed so
that when you run Depreciation, the Generate Accounts program will not
detect any new asset with code combinations that need to be built, which
will greatly enhance overall performance.

For 11i customers, if the concurrent program (FAGDA) does not appear in the LOV
using Standard Report Submission (SRS) form, then please see Note 124955.1.
16. How does the depreciation program handle the end of a fiscal year?
Answer: At the end of a fiscal year, the depreciation program runs a short module
to prepare Oracle Assets for the next fiscal year. This module runs
automatically during the depreciation program. The fiscal years program
runs if the current period is the last period in the fiscal year. This
occurs when the period number of the current period = NUMBER_PER_FISCAL_YEAR
in the table FA_CALENDAR_TYPES. The fiscal years program checks if there are
rows defined for the next fiscal year in FA_DEPRN_PERIODS, FA_FISCAL_YEAR,
FA_CALENDAR_PERIODS, and FA_CONVENTIONS. If rows do not already
exist, the fiscal years program creates them.

For Release 11i:
Because of changes for the formula-based depreciation methods, you are now
required to create your fiscal year and calendars for the current fiscal
year + 1. Otherwise, you will be unable to run depreciation successfully.
17. What is the process flow for running Depreciation in 11i?
Answer:There have been several changes made by development to make the Depreciation/Create
Journals Process go much smoother for 11i. To take advantage of these changes, you must be on minipack H (2115788) and stand alone Patch 2130639.
In 11i, you may run Depreciation without closing the period. This allows you to check Depreciation
and make any necessary adjustments before closing the period.
The process should be:
1. Run Depreciation (without closing the period)
2. Run Create Journals
3. Review reports in FA and GL to determine if everything look correct
If everything is correct,
- Resubmit Depreciation (closing the period)
- Create Journals does not need to be ran again
If corrections are necessary,
- Rollback Journals
- Rollback Depreciation
- Make corrections
- Repeat steps 1-3.
With the application of the new code mentioned above, if you try to rollback
Depreciation without rolling back Create Journals, Rollback Depreciation will
error telling you that you need to rollback Create Journals.
18. What is the difference between the 'B' row and the 'D' row in the
FA_DEPRN_DETAIL table?
Answer:The 'B' (Books) row is added to the FA_DEPRN_DETAIL table when the asset is added
to Oracle Assets. There will only be one Books row per distribution in the
FA_DEPRN_DETAIL table. The 'D' (Depreciation) rows are added when Depreciation
is ran. There will be one row for each period and distribution that
Depreciation is ran for.
19. What is the Depreciation Adjustment account used for?
Answer:When you use the functionality of Tax Reserve Adjustment for the prior fiscal
of a Tax book the Depreciation Adjustment Account is used.
20. How can I add assets to a closed period (after Depreciation has been ran)?
Answer:Many types of transactions within Oracle Assets can be entered with
retro-active effective dates - (please consult the User Guide to see
if this is possible for the transactions you wanted to enter).
For the period accidentally closed in Assets, you can accrue for the
financial impact of these transactions using manual GL journals.
Oracle Assets will then catch up any financial impact of the transactions
when you Create Journal Entries for the next period. You can then reverse
out your accruals.