Fa FDD Rajby

RAJBY INDUSTRIES
Functional Design Document

Oracle Fixed Assets
A. F. FERGUSON & CO.

CHARTERED ACCOUNTANTS
A member firm of
Functional Design
Fixed Assets
Table of Contents
1 Overview ............................................................................................... 4
1.1 Fixed Asset Integration with other Modules ........................................................... 6
1.2 Benefits of implementing Oracle Assets: ................................................................. 7
2. Master Data and Set up ........................................................................... 8
2.1 Asset book ................................................................................................................ 8
2.2 Organizational Structure ......................................................................................... 9
2.3 Asset category Flex field .......................................................................................... 9
2.4 Asset Location Flex field ......................................................................................... 11
2.5 Asset Key Flex field ................................................................................................ 12
2.6 Depreciation Methods ........................................................................................... 13
2.7 Pro-Rate Convention ............................................................................................. 14
2.8 Asset tagging and numbering ................................................................................. 14
2.9 Period Closing ......................................................................................................... 14
3. Process Flows ....................................................................................... 15
3.1 Fixed Assets Overview ............................................................................................ 16
3.2 Mass Additions through Payables ...........................................................................17
3.3 Direct Addition ....................................................................................................... 18
3.4 CWIP Capitalization ............................................................................................... 19
3.5 Transfer and Reclassification ................................................................................. 20
3.6 Depreciation Run ................................................................................................... 22
3.7 Disposals/Retirements ........................................................................................... 23
3.8 Revaluation of Fixed Assets ................................................................................... 24
3.9 Inter-division transfer of Asset .............................................................................. 25
3.10 Transfer to GL and Closing Period ....................................................................... 26
3.11 Held for Sale, idle and scrap asset ........................................................................ 26
3.12 Reconciliation ....................................................................................................... 28
4. Accounting Entries................................................................................ 29
4.1 Capitalized Assets / CIP assets creation ............................................................... 29
4.2 Capitalization of CWIP ......................................................................................... 29
4.3 Disposal of Asset ................................................................................................... 29
4.4 Cost Adjustment ................................................................................................... 30
4.5 Depreciation .......................................................................................................... 30
A. F. FERGUSON & CO. a member firm of Page 2 of 42

Functional Design
Fixed Assets
4.6 Reclassification ..................................................................................................... 30

5. Personalization and Quality Plans ........................................ 31
6. Data Elements ....................................................................... 32
7. Reports.................................................................................. 39

Functional Design
Fixed Assets
1 Overview
All assets of Rajby Industries will be maintained in the Oracle Assets Module. Oracle
Assets will keep the information related to both capitalized assets as well as CWIP
assets. CWIP assets will be capitalized when it is probable that future economic benefits
will flow to the company. The Oracle Assets module is integrated with Oracle Payables
and Oracle General Ledger.
Oracle Assets is a complete Lifecycle Module with major capabilities and their use at
Rajby industries.
Addition of Fixed Assets:

In Oracle Assets, assets can be created through following methods:
 Transfer of invoice distributions from Oracle Payables through Mass addition
program
 Oracle Web ADI in the form of Mass addition lines
 Direct Asset addition in Oracle Assets
 Capitalization of CWIP Assets
Maintenance of Assets:
All the records related to assets will be maintained in asset book, where they can be seen
or enquired and their transaction history traced.
Identification of Assets according to Asset Categories:

Oracle assets has key flex field structure named as category flex field which will group
assets in categories according to shared qualities or characteristics i.e. major categories,
minor categories and sub categories.
Maintenance of Assets Location:

There is key flex field in Oracle assets named as Assets Location Flex field which will be
used to keep record related to asset location e.g. Business Unit, Building and
Department.
Record of Asset’s Assignment to Employees:

Asset can be assigned to employee once the asset is added in assets module. This will
help to keep record of an asset for internal control purposes.
Depreciation and Amortization of Assets:

Oracle Assets uses depreciation program for calculating depreciation and gain and loss
on disposals. Same depreciation program will be used at Rajby industries to close the
period in Fixed Assets module.
The depreciation program will calculate depreciation expenses and adjustments, and
update the accumulated depreciation. When depreciation program will be run, it will
submit two separate requests to:
 Calculate gains and losses for retired assets and catch up depreciation for retired
assets

Functional Design
Fixed Assets
 Calculate depreciation expense and adjustments for the period, and close the
current period.
Disposal of Fixed Assets:
Disposal of Assets shall also be recorded in Oracle Assets by using Retirement
functionality. Oracle Assets allows to preview accounting effects of retirement and then
after accounting effect has been verified, users can post retirement and run Calculate
Gain and Loss Program.
Revaluation of Fixed Assets:

Oracle assets module allow revaluation of Assets.
Transfer of Fixed Assets:

This functionality will be used to transfer an asset from one Location to another. This
functionality will also be helpful in recording transfer of asset from one employee to
another and changing depreciation expense account of assets. Asset transfer can be
recorded within an asset book; any transfer across asset book can be recorded by
processing disposal in one book and addition in another book.
Reclassification of Fixed Assets:

This functionality is helpful in changing Asset Category of Assets.
Create Accounting and Transfer to General Ledger:

Oracle Assets uses program called “Transfer Journal Entries to GL” for transfer of
journal entries from Assets module to General Ledger Module. After depreciation run is
complete, “Create Accounting” will be executed by the user to transfer accounting
entries relating to Fixed Assets addition, Deletion, Adjustments and depreciation for the
period to general ledger for posting.

Functional Design
Fixed Assets
1.1 Fixed Asset Integration with other Modules
Account Receivables Inventory Accounts Payable
Fixed Assets related activities to

Fixed Assets related activities to
Fixed Assets related activities to be performed in Accounts
be performed in Inventory
be performed in AR Payable Module:
Module:
· Booking of Receivable against · Entering Purchase invoices
· Issue of Inventory to be
Disposal of Asset. related to Assets with an
capitalized by manual
· Recording of Cash receipts attribute ‘Track as Assets’
Addition in Fixed Assets.
against sale of Asset. checked.
· Asset Item Maintenance.
· Creating Mass Additions to
Fixed Assets.
Issue of items
Disposal Proceeds of sold Asset Mass Addition
Fixed Assets
Functionalities that will be performed in Oracle

Assets are:
· Asset Book Maintenance
· Mass Addition through Payables
· Direct Additions in Oracle Assets
· CWIP Capitalization
· Transfer and Reclassification
· Retirement/Disposals
· Depreciation Run
· Revaluation
· Transfer to GL and Period Closing
Additions/Depreciation/Adjustments
General Ledger
All the financial Data from Oracle Assets will be

interfaced to Oracle General Ledger. Financial data
includes
· Capitalized Cost (Both Assets and CWIP)
· Depreciation Expense
· Asset Disposal related Financial data
· Any data related to Revaluation of Fixed Assets

Functional Design
Fixed Assets
1.2 Benefits of implementing Oracle Assets:
There are following benefits of implementing Oracle Assets for Rajby Industries
 Automate asset additions as part of the procure-to-pay process to interface
depreciable capitalized assets.
 Strong reporting tools to ensure accuracy and completeness, there will be system
generated reports available such as fixed assets register and fixed assets schedule
to check assets details.
 Tracking of Fixed assets from Oracle Payables
 Automatic calculation of Depreciation, WDV of Assets and gain and loss on assets
disposals.
 Mass Assets addition through Web ADI in excel sheet for direct uploading in
Oracle Assets Module.
 Transferring of assets to different employees, from one location to another and
from one expense account to another.
 Creating and maintaining CIP assets as the money is used for raw materials and
labor for constructing them.
 Online inquiry of Assets
 Transfer of assets within different units
 Multi-org access control enables to view data of multiple operating units using a
single responsibility.
 Create accounting program will transfer all the entries into the General Ledger
module on regular intervals.
 Automatic asset tagging number generation.
 Reclassification of Assets.

Functional Design
Fixed Assets
2. Master Data and Set up
2.1 Asset book
In oracle Assets, asset books are created to secure/segregate asset data. Asset books are
assigned to a ledger.
Oracle assets are used to record Asset related transactions and reporting as per statutory
requirements. Asset books are set up for accounting recognition and measurement of
Assets. In Oracle either Cost or revaluation model can be used can be used at one time
for each corporate book and depreciation schedule can only be calculated for an asset for
either of the two models at a time accordingly depending on which model is selected
while setting up the oracle Assets.
The following cost books will be maintained at Rajby Industries to measure assets at
cost model. Depreciation will be charged according to the cost book.
 Cut to Pack Asset Book
 Washing Asset Book
A corporate book will be defined which will be maintained for revaluation purposes.
Periodically data will be transferred from cost book to corporate book. Depreciation will
be charged according to the corporate book.
Asset books will contain following information:
Sr. No Book Controls Details

1 Calendar
· Depreciation calendar
· Fiscal year
· Prorate calendar
· GL Posting
· Current Period
Ledgers Rajby Ledger will be assigned to Rajby Asset

Book.
2 Accounting Rules · Mass changes and amortization changes

· Controls over Revaluation

Functional Design
Fixed Assets
2.2 Organizational Structure
Legal Entity Rajby Industries
Asset Books
Cut to Pack Asset Book Washing Asset Book
2.3 Asset category Flex field
In Oracle Assets, all assets will be grouped and tracked by Asset Categories. Asset
categories will be used in Oracle Assets for accounting and depreciation / amortization.
In Oracle, following information will be maintained at Asset Category level:
Sr. No Information
1 Cost Account
2 Cost Clearing Account
3 Depreciation Account
4 Accumulated Depreciation Account
5 Revaluation Reserve Account
6 Revaluation Amortization Account
7 CWIP Cost Account
8 CWIP Cost Clearing Account
9 Depreciation method
10 Useful life
11 Asset Addition Convention
12 Asset Retirement Convention

Functional Design
Fixed Assets
The above information will default at the time of asset creation based on the category
assigned. Following assets category structure will be set up in the system:
Sr. Segment
Segment Name Type Description
No Length
Represents the major category of assets

Major as appearing in Fixed asset schedule i.e.
1 2 Independent
Category Land, Building, and Office Equipment
etc.
Further categorization of major

category for reporting purpose i.e.
Dependent on Machinery Stitching, Machinery
Minor
2 3 Major Cutting, Machinery Washing, Cars etc.
Category
Category Segment values related to this segment
will be defined as child of Major
Category segment.
Sub- Category will represent further
divisions of minor category. This is the
Dependent on lowest level at which assets are tracked
3 Sub-category 3 Minor at Rajby Industries. E.g. Minor category
Category Of Machinery Stitching is further
bifurcated into Bartak, Double Needle,
Waist Belt, Eyelet etc.
Segments created for future
4 Future 1 2 Independent
requirements.
Segments created for future
requirements.
Combination of above segments will make up different asset category combination in the
system. When new asset is added, asset category combination will be assigned to it.

Functional Design
Fixed Assets
2.4 Asset Location Flex field
Oracle Assets uses the location flex field to group assets by physical location. It would
help Rajby Industries management to report their assets by location. The asset location
flex field will comprise of the following structure.
Segment
Sr. No Segment Name Type Description
Length
This segment will be used to record

1 Unit 3 Independent
the Unit in which Asset is placed.
To record the Department in which

2 Department 3 Independent
asset is located.
To Track the Asset according to the

3 Building 3 Independent
Building in which it is located
This segment will be used to cater

Future requirements
This segment will be used to cater

Future requirements

Functional Design
Fixed Assets
2.5 Asset Key Flex field
Oracle Assets uses the asset key flex field to group the assets by non-financial
information. It is used for recording additional information. At Rajby industries, the
asset key flex field will consist of the following segment(s).
Segment
Sr. No Segment Name Type Description
Length
1 Source 2 Independent To record whether the assets

are local, imported or
manufactured.
2 Insurance 2 Independent To record which asset is

insured and which one is not.
3 Movable/Immovable 2 Independent Differentiate between movable
assets (like cars) and
immovable assets (like
buildings)
4 Project 4 Independent This will be used in case of
CWIP assets, which are
classified and recorded project
wise.
5 Future 1 4 Independent To be used in future if needed.
6 Future 2 4 Independent To be used in future if needed.

Functional Design
Fixed Assets
2.6 Depreciation Methods
In Oracle Assets, depreciation method is assigned to asset categories and defaults on

individual assets falling under the Asset Category. At Rajby, Building on leased land is
depreciated using straight line method over the life of leased land with no salvage value.
For all other asset categories reducing balance method of depreciation will be defined.
All assets at Rajby Industries other than land will be stated at cost less accumulated
depreciation. Full month depreciation will be charged in the month of purchase and
none in the month of disposal. Intangible assets will be stated at cost less amortization.
Accounting depreciation rates are different for different categories. Ranges of rates for
each major category of asset will be defined as follows:
Sr. No. Asset Category Depreciation Rate
1 Land and Building 5%

2 Plant and Machinery 10%
3 Furnishing of leased hold property 20%
4 Office Equipment 10%
5 Electric Fitting 10%
6 Computer 30%
7 Furniture and Fixture 10%
8 Generator 10%
9 Air Conditioner 20%
10 Solar System 10%
11 Motor Vehicle 20%
12 Lift Cargo 10%
13 Compressor 10%
14 Container 10%

Functional Design
Fixed Assets
2.7 Pro-Rate Convention
Oracle Assets uses the prorate convention to determine how much depreciation to take
in the first and last period of an asset's life based on when asset is placed in service. If an
asset will be retired before it is fully used, Oracle Assets will use the pro-rate convention
to determine how much depreciation to take in the last year, of life based on the
retirement date.
At Rajby Industries, full-month depreciation will be charged in the month of acquisition
and retirement.
2.8 Asset tagging and numbering
Assets Number will be automatically created at the time of creation of assets. If assets
are purchased in bulk then each asset will have separate asset number.
Asset Tag Number is manually enterable field and user will be able to enter the tag
number at the time of creation of asset.
Asset Number is system generated and will appear with each asset in asset workbench
while tag number will appear in Asset Tagging Report/Fixed Asset Register.
2.9 Period Closing
At each month end, the authorized user in Accounts Department will execute the
‘Depreciation Run’. After reviewing the depreciation results, the said user, if satisfied, will
run ‘Transfer to General Ledger’ program and close the relevant Oracle Assets period for
each Corporate Asset
Book. Any Oracle Assets period, once closed, cannot be reopened.

Functional Design
Fixed Assets
3. Process Flows
Sr. No. Scenario Name Process Flow Ref.
1 Fixed Assets Overview 3.1

2 Mass Additions Through Payables 3.2
3 Direct Additions 3.3
4 CWIP Capitalization 3.4
5 Transfer and Reclassification 3.5
6 Depreciation Run 3.6
7 Disposals/Retirements 3.7
8 Revaluation of Fixed Assets 3.8
9 Inter-Division of transfer of Assets 3.9
10 Transfer to GL and Period Closing 3.10
11 Held for sale, idle and scrap asset 3.11
12 Reconciliation 3.12

Functional Design
Fixed Assets
3.1 Fixed Assets Overview
Legend :
Process Overview Manual process Manual Input
Automated process Validation
Documentation Level Fixed Asset Decision Link
Manual Documents System Generated Document
Process owner(s) FA 1
Description
Fixed Asset capitalization process starts from either through Mass
Start
Addition via Payable or through direct Addition.
CIP Asset project Ones capitalized, asset can be depreciated, transferred, reclassified
number in and retires as required.
Descriptive Flexfield
at Inventory Module
Create Accounting program and Transfer to General Ledger program
needs to be run in order to generate accounting of all the transactions
and transfer them from Oracle Asset to Oracle GL.
Prepare Mass Is addition through
Yes No Direct Addition
Addition Payables
Payable
Invoice
Corporate
Book
Asset Addition
Post Mass
in Asset
Addition
Workbench
Corporate
Book
Update Corporate
Transfer Database Book
Perform
Depreciation
Transfer /
Run Process
Disposal
Reclassification
Accounting
Program &
Transfer to GL
End

Functional Design
Fixed Assets
3.2 Mass Additions through Payable
Legend :
Process Additions through Payables Manual process Manual Input
Documentation Level FA 2 Decision Link
Process owner(s) AP/FA
Description
Start
2.1 The user of the accounts department shall enter the invoice
header in Oracle Payables on receipt of supplier invoice.
Accounts department
Invoice
Invoice
Enter Invoice Header Processing
2.2 The user in accounts department shall either match the invoice
with the relevant Fixed Asset receipt/receiving or enter the invoice
2.1
lines manually. In case the Invoice lines are entered manually, the
user will enter Asset Clearing account.
2.3 The invoice will be validated and accounting will be created of the
Validate
Information Invoice in Payables Module.
Match No Enter Manual

Invoice Invoice line Enter Asset Clearing
Account only
Y
E
S
Accounts department
PO
Receipts Match the Invoice to Invoice
Receiving Purchase Order / PO Matching
Transaction Receipt
2.2
Accounts Department
Validate the Invoice
Validate
and Create
Information General
Accounting
2.3 Ledger
A

Functional Design
Fixed Assets
Legend :
Process Additions through Payables Manual process Manual Input

Description
A
2.4 The user of the accounts department shall run the concurrent
Accounts department request of ‘Mass Addition Create’. This integrates Payable module
Accounts department
Is there a need to
with Fixed Asset module, allowing data to flow from AP to FA.
Run concurrent add asset to Yes Add to required asset
request of Mass existing asset?
Addition Create
2.6
2.5 Once request has been completed successfully, the user will go to
2.4 Fixed Asset Module and will create mass addition. This will allow user
to add detail about asset, its depreciation policy, useful life, salvage
value, its location, depreciation expense account, assigning asset to an
employee (where needed), etc.
Accounts department
Create Mass Addition 2.6 If an asset has to be added to an existing asset, then choose the
No ‘Add to Asset’ option select the relevant asset in which it has to be
2.5 added.
2.7 If there is a need to split the asset, then user can do so by

choosing the functionality of ‘Split’. Oracle Asset will split the relevant
asset on the basis of number of units.
Accounts department
2.8 After adding all the relevant details, user will post the details
Is there a need to Transfer to GL and using the functionality of ‘Post Mass Addition’
split asset into No Post Mass Addition Period Closing
multiple asset? Ref: FA 2.9
2.8
Yes
Accounts department
Split the asset on the

basis of number of
units
2.7
3.3 Direct Addition

Functional Design
Fixed Assets
Legend :
Process Direct Additions Manual process Manual Input
Process owner(s) FA
Description
Other than additions routed through payables the followings steps
may be followed to perform manual additions.
Start
3.1-3.2 A Purchase order receipt process will be performed in
inventory module. At he time of inventorization, asset will be
automatically charged to asset clearing account. It will not become
part of inventory.
PO Receipt
3.3 Afterwards the manual addition process will be performed in
3.1 which the asset would be added by means of assets workbench. The
Assets Cost Account or CIP Cost Account will be updated accordingly.
The user will enter following information in respect of each Addition :
Receipt of capital Item Asset Details: The user will enter the asset key (None in this case),
description of the asset, asset category, and number of units,
3.2 manufacturer and model of the asset.
Assignment: The asset will be assigned to an employee, location and

the depreciation charge Account in this region.
Manual Addition
Finally the GL and the assets database will be updated.
3.3
Transfer to GL and Period

Closing Rajby Book
Ref: FA 2.9
3.4 CWIP Capitalization

Functional Design
Fixed Assets
Legend :
Process CWIP Capitalization Manual process Manual Input
Documentation Level FA- 4 Decision Link
Description
Start
4.1 The user of the accounts department shall enter the invoice
header in Oracle Payables on receipt of supplier invoice.
Invoice
Invoice Enter Invoice Header Processing
4.1 4.2 The user in accounts department shall either match the invoice
with the relevant Fixed Asset receipt/receiving or enter the invoice
Validate
lines manually. In case the Invoice lines are entered manually, the
Information user will enter CIP- Clearing account and enter Project Number in the
DFF.
Enter Manual
4.3 The invoice will be validated and accounting will be created of the
Match No
Invoice Invoice line Enter CWIP Clearing Invoice in Payables Module.
Account only.
Y
E
S
Match the Invoice to Invoice Enter Project Number

Purchase Order / PO Matching in DFF
PO Receipt
Receipts 4.2
Receiving
Transaction
Validate Validate the Invoice

Information and Create Accounting
4.3
General
Ledger
3.5 Transfer and Reclassification

Functional Design
Fixed Assets
Legend :
Process Transfer and reclassification Manual process Manual Input
Documentation Level FA-5 Decision Link
Process owner(s) FA
Description
Assets can be transferred or reclassified either individually or at
mass level. Transfer involves change in location or employee
Start ownership of asset after intimation by relevant department.
Is
Is transfer of Is reclassification reclassification Reclassification is used for change in category of an asset or group
End No No Yes of assets due to leased assets reclassified as owned assets, wrong
asset required? of asset categories for more then
required? one asset? category assignment of an asset or group of assets, change in
depreciation method, etc.
Yes Transfer can be processed for recording transfer within the same
Yes asset book. Any transfer across asset books is not allowed.
Is individual asset
No No
to be transferred?
Initiate mass 5.1 The user of accounts department will transfer individual asset
reclassifications
Mass transfers by changing its assignment Location or employee information
initialization Yes FA 5.6 from the asset workbench.
FA 5.2 5.2 To transfer large number of assets at a time, the user will use
Mass transfers functionality. The User of accounts department
Preview Reclassification
Transfers through will select the asset book and the category of the assets to be
Report through asset
asset workbench transferred and enter the Transfer From and Transfer to
workbench
FA 5.1 FA 5.5 information of the assets to be classified.
5.3 He will then preview the list of assets selected by system on
the basis of criteria entered by him through standard Preview
Preview of Assets report.
Preview of assets 5.4 After preview, he will execute the mass transfer process and
FA 5.7 selected assets will automatically be transferred to new location
FA 5.3 Assets and / or employees.
5.5 The user of accounts department will use asset workbench to
reclassify individual assets. The user will query the asset and
Validate Validate change its category as required.
Information Assets Information 5.6 To reclassify the categories of large number of assets, the user
of accounts department will use Mass Reclassifications
functionality. The User of accounts department will select the
asset book and the category of the assets to be reclassified and
Mass transfer process Mass reclassification enter the category to which they need to be transferred.
process 5.7 He will then preview the list of assets selected by system on
FA 5.4
FA 5.8 the basis of criteria entered by him through standard ‘Preview’
report.
5.8 After preview, he will execute the mass reclassification
process and selected assets will automatically be reclassified to
Transfer to GL and new category.
Period Closing
Ref: FA 2.9

Functional Design
Fixed Assets
3.6 Depreciation Run
Legend :
Process Depreciation Manual process Manual Input
Process owner(s) FA
Description
In Oracle Assets depreciation program will be run on
monthly basis for all assets. After depreciation run,
Start
accounting will be created for transactions in a particular
period and finally transferred to General Ledger.
Asset Book
6.1 At period end, authorized user in Accounts Department
will run depreciation in Oracle Assets for a particular
month to automatically calculate depreciation.
Initiate
‘Depreciation Run
Process’ 6.2 System will execute the depreciation process for all
FA 6.1 assets and calculate depreciation. After execution of
process, user will review depreciation calculated by the
system.
6.3 Incase, depreciation has wrongly been calculated for

such assets or certain additions are required during the
Depreciation run
processing period ,necessary adjustments may be made and
Update
Database
depreciation program for that period will be executed
FA 6.2 again.
Make required
Is
adjustments to the
Yes Depreciation No
assets.
correct?
FA 6.3
Transfer to GL and
Period Closing
Ref: FA 2.9

Functional Design
Fixed Assets
3.7 Disposals/Retirements
Legend :
Process Disposal/Retirement Manual process Manual Input
Process owner(s) FA
Description
Assets disposal are handled in Oracle Assets to automatically calculate gain
and loss on asset and reverse existing cost and accumulated depreciation
accounts.
Preparation of
Item Disposal Approval as per 7.1 Processing of disposal will start by relevant user department. The
Start Disposal
Request company policy preparer will enter details of asset being disposed.
FA 7.1 FA 7.2 FA 7.3
7.2 Approval will be done as per company policy for each category of assets.
7.3 Disposal is arranged by the concerned department and is completed

under supervision of that department.
7.4 Accounts department will query the asset in Oracle Assets and enter the
following in respect of disposal of the assets:
· Asset cost to retire;
Enter disposal · Quantity Sold;
Gain/Loss information in Asset · Sale proceeds against disposal;
processing Workbench · Customer Name.
FA 7.5 FA 7.4
Upon saving, Oracle Assets will assign each retirement transaction a unique
reference number that can be used to track the asset disposed.
Is 7.5 The retirement transaction will have the status of pending. The user will
Reinstatement run ‘Calculate Gain and Loss’ program to change the retirement status from
required? Initiate Assets
Reinstatement ‘Pending’ to ‘Processed’. Upon running the calculate gain and loss program,
Yes reinstatement
Process net gain or loss on the asset will be calculated.
process
FA 7.6 FA 7.7
7.6 In case there is any error while entering disposal, user can reinstate the
disposal.
7.7 For reinstatement, he will select the relevant asset in the system and
process reinstatement of disposal. On reinstatement, system will
Transfer to GL and automatically reverse gain and loss on disposal. After reinstatement, user can
No Period Closing again process disposal of asset with correct information.
Ref: FA 2.9
Finally the GL and Oracle Assets is updated.

Functional Design
Fixed Assets
3.8 Revaluation of Fixed Assets
Legend :
Process Revaluation Manual process Manual Input
Process owner(s) FA
Description
8.1 In Mass Transactions – Revaluation form, a particular Asset Book
and Asset number will be selected for revaluation.
Start
8.2 Revaluation rate will be applied for revaluation of asset. In case
of devaluation of asset, negative percentage will be given in the
percentage field.
Selection of book and

asset at ‘Revaluation’
form
8.1
Application of revaluation
rate to individual asset
8.2
Report generation
8.3
Report
Transfer to GL and
Period Closing
Ref: FA 2.9

Functional Design
Fixed Assets
3.9 Inter-division transfer of Asset
Legend :
Process Inter-Division Transfer Manual process Manual Input
Process owner(s) FA
Description
9.1 Asset will be retired at net book value from one asset book.
Retirement process has already been covered in Process 4.6.
Start
9.2 Asset will be directly added at net book value into other asset
book, as already specified in Process 4.2.
Retire Asset from one Manually add asset in

book other asset book
9.1 9.2
Transfer to GL and
Period Closing
Ref: FA 2.9

Functional Design
Fixed Assets
3.10 Transfer to GL and Closing Period
Legend :
Process Transfer to GL and Period Close Manual process Manual Input
Process owner(s) FA
Description
In Oracle Assets, monthly accounting periods are maintained to
process transactions and depreciation calculation. A new period
Additions through payables Ref 3.2, Direct cannot be opened for transaction processing and
addition Ref 3.3, depreciation run unless previous period has been closed.
CWIP additions Ref 3.4,
Transfers and Reclassification Ref 3.5,
Depreciation Ref 3.6,
Disposal/Retirements Ref 3.7, 10.1 At periodic intervals authorized user in Account Department will
Revaluation Ref 3.8, run “Create Accounting Program” in Oracle Assets to create
Inter-division Transfer Ref 3.9 accounting entries in respect of all asset transactions. User will have
Run ‘Create Accounting the option to run the accounting program either in the “Draft” or
Accounting Program’ entries report
“Final” Mode.
FA 10.1
10.2 In case accounting program is run in a draft mode user can view
accounting entries related to all transactions generated in Oracle
Assets through accounting entries report.
Review accounting
Is program to be 10.3 In case any corrections are required in any of the transactions in
YES entry
run in draft mode?
Oracle assets, authorized user in Accounts Department will make the
FA 10.2
necessary amendments before running accounting program in Final
Mode. System does not transfer accounting entries created in draft
NO mode to General Ledger.
10.4 When the accounting is run in the Final Mode, system will
Run Program in
‘Final Mode’ Yes
Are accounting automatically creates accounting entries in Assets Module, transfer it
entries final ? to General Ledger and finally post the journals in Oracle General
FA 10.4 Ledger.
No
10.5 At month end, the authorized user in Accounts Department will
close the Assets Period after all transactions related to that period
Transfer to GL and Perform transactions/ have been processed. Any period closed in Oracle Assets cannot be re-
Period Close corrections in the
General system opened. .
Ledger FA 10.5
FA 10.3
End
3.11 Held for Sale, idle and scrap asset

Functional Design
Fixed Assets
Legend :
Process Held for Sale, Idle and Scrap Asset Manual process Manual Input
Process owner(s) FA
Description
Following cases are to be covered in Oracle FA module for reporting
Start and identification:
1) Idle Assets
2) Held for sale assets
3) Scrap assets
11.1 Idle assets will be identified by creating a Descriptive Flexfield in

Asset Book form. Further, user will unmark “Asset in Use” checkbox
Idle Assets Held for sale assets Scrap Assets
at Asset Detail Form. Reporting for such assets will be available.
11.1 11.2 11.3 11.2 Held for sale assets will be identified in a Descriptive Flexfield in
Asset Book form. Reporting for such assets will then be available.
11.3 Scrap assets will be identified in Descriptive Flexfield in Asset

Unmark Book form. Reporting for such assets will be available.
Unmark ‘Asset in Use’
‘Depreciation’
checkbox in ‘Asset
checkbox in ‘Asset
Details’ form
Book’ form
11.4 11.5
Report generation
11.6
End

Functional Design
Fixed Assets
3.12 Reconciliation
Legend :
Process Reconciliation Manual process Manual Input
Process owner(s) FA
Description
12.1 Accounts user should run the ‘Cost Summary’ Report at first. It
Start will outline the natural accounts at which cost of asset is held.
12.2 Accounts department user will then run the report ‘Journal
Entry Reserve Ledger Report’. It will specify the amount of
depreciation and accumulated depreciation held in each respective
natural account.
Run the Report ‘Cost
Sumary’ 12.3 Accounts department user will then match the total of natural
accounts from the above two reports with the balance of the same
12.1 natural accounts in Trial Balance.
Run the Report

‘Journal Entry
Reserve Ledger
Report’
12.2
Match the output of

reports with Trial
Balance
12.3
End

Functional Design
Fixed Assets
4. Accounting Entries
4.1 Capitalized Assets / CIP assets creation
Process Flow Reference FA

Document Type Asset Addition
Account Description Dr. Cr.

Asset / CWIP Cost Account* ****
Asset / CWIP Clearing Account ****
*Asset Cost account will be debited, based on the asset category assigned to the asset.
4.2 Capitalization of CWIP

Document Type Asset capitalization

Asset Cost Account* ****
CWIP Cost Account ****
*Asset Cost account will be debited, based on the asset category assigned to the asset
4.3 Disposal of Asset

Document Type Asset Disposal

Accumulated Depreciation Account ****
Proceeds of Sale Clearing Account ****
(Disposal proceeds)
Gain/Loss Account ****
Asset Cost Account ****

Functional Design
Fixed Assets
4.4 Cost Adjustment

Document Type Addition to existing asset

Assets Cost Account ****
Assets Clearing Account ****
4.5 Depreciation

Document Type Depreciation

Depreciation Expense ****
Accumulated Depreciation ****
*Depreciation expense account (all segments) will be debited based on asset

assignment.
*Accumulated depreciation account will be credited based on the category assigned to

the asset.
4.6 Reclassification

Document Type Reclassification

New asset category cost account ****
Old asset category cost account ****
Old asset category accumulated depreciation account
New asset category accumulated depreciation account ****

Functional Design
Fixed Assets
5. Personalization and Quality Plans

Personalization will be made of Asset Tag Number. At the time of capitalization of Asset,
Oracle Asset will automatically generate the last available tag number for each major
asset category. Separate tag numbers will be created for different categories.
Quality Plan will be made for Asset insurance alerts. As soon as the marine insurance of
imported asset will end an alert will be generated to cover the asset against a suitable
insurance policy. Contents of quality plan are as follows:
· Item
· Supplier Name
· LC Number
· Expected Date of Shipment
· Date of Insurance
· Insurance Policy Number
· Remarks

Functional Design
Fixed Assets
6. Data Elements
Document Level DE 1
Document Type Asset Details
Asset Details
Standard Fields
Sr.
Data Field
No.
1 Asset Number
2 Description
3 Tag Number
4 Category of Asset
5 Serial Number
6 Asset Key (Asset Key Flex field)
7 Asset Type (CIP, Capitalize, Expensed)
8 Units (Quantity)
9 Parent Asset
10 Manufacturer
11 Model

Functional Design
Fixed Assets
Asset Details
12 Warranty Number
13 Lease Number
14 Description of Lease
15 Lesser Name
16 In Use (Check Box)
17 In Physical Inventory ( Check Box)
18 Property Type (Rental, Personal)
19 Ownership i.e. Leased, Owned
20 Property Class
21 Bought (New, Used)
22 Commitment
23 Investment Law

Functional Design
Fixed Assets
Document Level DE 2
Document Type Asset Source Lines
Asset Source Lines
Standard Fields
Sr.
Data Field
No.
1 Asset Number
2 Asset Type
3 Cost
4 New Cost
5 Status
6 Amortize Adjustment (Check Box)
7 Amortization Start Date
8 Invoice Number
9 Invoice Line
10 Description
11 Distribution Line
12 Supplier Name

Functional Design
Fixed Assets
Asset Source Lines
13 Supplier Number
14 Line Amount
15 Transfer Amount
16 PO Number
17 Source Batch
18 Project Number
19 Task Number
20 Material Indicator (Check Box)
Document Level DE 3
Document Type Assignment
Assignment
Standard Fields
Sr.
Data Field
No.
1 Asset Number
2 Reference Number
3 Book

Functional Design
Fixed Assets
Assignment
4 Transfer Date
5 Comments
6 Distribution Set
7 Unit of Measure (UOM)
8 Total Units
9 Units to Assign
10 Unit Change
11 Units
12 Employee Name
13 Employee Number
14 Description Expense Account
15 Location

Functional Design
Fixed Assets
Document Level DE 4
Document Type Retirements
Retirements
Standard Fields
Sr.
Data Field Source Lines
No.
1 Asset Number
2 Reference Number
3 Book
4 Retire Date
5 Comments
6 Status
7 Current Units
8 Current Cost
9 Units Retired
10 Cost Retired
11 Retirement Type
12 Proceeds of Sale

Functional Design
Fixed Assets
Retirements
13 Cost of Removal
14 Retirement Convention
15 Gain/Loss Amount
16 Straight Line Method
17 Life Years
18 Months
19 Check/Invoice
20 Sold to
21 Trade in Asset
22 Description
23 Group Asset
Recognize gain and Loss (Do not recognize/Immediately

24
when retired)
25 Reduction Rate
26 Reserve Retired
27 Prior year Reserve Retired

Functional Design
Fixed Assets
7. Reports
Customized Reports
Following is the tentative list of customized reports that are required from Oracle
Assets.
Reports Activity Purpose
Fixed Asset Register
Detailed Schedule (Financial Statement
Disclosure)
CWIP Cost Sheet
Standard Reports
Following are the standard reports in Oracle Assets:
Sr. No Name of Reports Description

1 Budget-to-Actual Report This report shows the difference between your
budgeted purchases and actual asset
purchases. It also separately lists categories to
which you have added assets during the
period, but for you have not allocated a budget
amount. This report is sorted by addition type,
company and cost center.
2 Capital Spending Report This report compares the cost of your
additions before the date you specify with the
cost for the whole fiscal year. For actual
additions, the report lists the original cost of
assets placed in service during the whole fiscal
year thus far, and compares it to the cost of
assets placed in service before the date you
specify.
3 Budget Report Use this report to review the annual capital
budget by category for each of your cost
centers. The report is sorted by company, cost
center, category. It prints totals for each
category, cost center and company.
4 Capitalization Report This report shows the CIP assets that you
capitalized during a range of accounting
periods. The cost column on this report

Functional Design
Fixed Assets

matches the capitalizations column on the CIP
Detail and CIP cost Balance report.
5 CIP Assets Report This report shows all the invoice line items and
manually entered source line items for your
CIP assets. Use this report to review your
assets at the end of each accounting period.
6 Cost and CIP Detail and Use the Cost Detail and Cost Summary reports
Summary Reports to reconcile your asset cost accounts to your
general ledger. Use the CIP detail and CIP
summary reports to reconcile your CIP cost
accounts to your general ledger. To reconcile
with your Oracle General Ledger, compare the
Cost or CIP Summary report with the Account
Analysis Report.
7 Asset Register Report Use this report to get a snapshot of any asset.
The report shows a line with asset information
for the corporate book you specify and for each
associated tax book. It provides information
that is current as of the day you request the
report. It does not provide historical
information. The report is sorted by asset
number.
8 Asset Inventory Report Use this report to ensure an accurate asset
inventory. You can send it to each of your
managers periodically to show them the assets
under their control. Your managers can use the
report as a turnaround document to inform
your fixed asset manager of additions,
transfers, retirements and other changes. You
can have your managers sign the report to
provide you and your auditors with
confirmation that your asset inventory is
accurate.
9 Asset Description Listing Use this listing to review the descriptions
assigned to your assets. This helps you
standardize your asset descriptions by helping
you ensure that similar assets have similar
descriptions.
10 Asset Tag Listing Use this listing to review the tag numbers
assigned to your assets.
11 Assets By Category Report Use the assets by category report to find and
review all the assets in an asset category. The
assets are sorted by balancing segment and
category in this report. This report prints the

Functional Design
Fixed Assets

total cost for each category and balancing
segment.
12 Fully Reserved Assets Use this report to find the assets that became
Report fully depreciated in a range of accounting
periods. The report is sorted by period,
balancing segment, asset account, and asset
number. It prints totals for each asset account,
balancing segment and period.
13 Depreciation Projection Use this report to review projected
Report depreciation expense for your assets for each
book you request. The report is sorted by, and
prints the total description for each balancing
segment, cost center, and expense account.
You can request report detail at the cost center
and/or Asset level.
14 Journal Entry Reserve Use this report to find out how much
Ledger Report depreciation expense Oracle assets charged to
a depreciation expense account for any
accounting period. The report lists all active
(not yet retired) capitalized assets, as well as
any assets that you have retired in the period’s
fiscal year.
15 Asset Cost Balance Report Use the asset Cost Balance Reports to reconcile
your asset cost accounts to your general ledger.
16 Transactions History Use this report to review all the transactions
Report that you performed on your assets for the book
and Asset Number range you choose. To get
additional detail about any of the transactions,
use the appropriate transaction reports. The
report is sorted by asset number.
17 Annual Additions Report Use this report to view all assets placed in
service in the date range you specify.
18 Asset Additions Report The report lists all the assets added to Oracle
Assets or capitalized during the specified
accounting periods.
19 Asset Additions by Cost Use this report to review the assets you added
Center Report to Oracle Assets or capitalized during any
depreciation period.
20 Tax Additions Report Use this report to view your asset additions
and capitalizations for the period range you
select.
21 Asset Disposals Use this report to view the assets that you
Responsibility Report removed from your cost centers through
retirements and transfers.

Functional Design
Fixed Assets

22 Leased Assets Report Use this report to find all your leased assets.
This report is sorted by balancing segment,
asset category, and lease number. It prints
totals for each category and balancing
segment.
8. Major Issues and Requirements mapping

Sr. No. Issues/Requirements Reference
1 Fixed Asset Register is not maintained in FAS system.
Properly maintained and updated FAR should be recorded.
2 There are few cases where asset is originally received in one
location and then transferred to another location. This
transfer is not normally communicated to accounts
department, hence, no tracking of assets in place.

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RAJBY INDUSTRIES

Functional Design Document

A. F. FERGUSON & CO.

A. F. FERGUSON & CO. a member firm of Page 2 of 42

4.6 Reclassification ..................................................................................................... 30

A. F. FERGUSON & CO. a member firm of Page 3 of 42

Addition of Fixed Assets:

Identification of Assets according to Asset Categories:

Maintenance of Assets Location:

Record of Asset’s Assignment to Employees:

Depreciation and Amortization of Assets:

A. F. FERGUSON & CO. a member firm of Page 4 of 42

Revaluation of Fixed Assets:

Transfer of Fixed Assets:

Reclassification of Fixed Assets:

Create Accounting and Transfer to General Ledger:

A. F. FERGUSON & CO. a member firm of Page 5 of 42

1.1 Fixed Asset Integration with other Modules

Account Receivables Inventory Accounts Payable

Fixed Assets related activities to

Disposal Proceeds of sold Asset Mass Addition

Functionalities that will be performed in Oracle

All the financial Data from Oracle Assets will be

A. F. FERGUSON & CO. a member firm of Page 6 of 42

1.2 Benefits of implementing Oracle Assets:

A. F. FERGUSON & CO. a member firm of Page 7 of 42

2. Master Data and Set up

2.1 Asset book

Sr. No Book Controls Details

Ledgers Rajby Ledger will be assigned to Rajby Asset

2 Accounting Rules · Mass changes and amortization changes

A. F. FERGUSON & CO. a member firm of Page 8 of 42

2.2 Organizational Structure

Legal Entity Rajby Industries

2.3 Asset category Flex field

A. F. FERGUSON & CO. a member firm of Page 9 of 42

Represents the major category of assets

Further categorization of major

A. F. FERGUSON & CO. a member firm of Page 10 of 42

2.4 Asset Location Flex field

This segment will be used to record

To record the Department in which

To Track the Asset according to the

This segment will be used to cater

This segment will be used to cater

A. F. FERGUSON & CO. a member firm of Page 11 of 42

2.5 Asset Key Flex field

1 Source 2 Independent To record whether the assets

2 Insurance 2 Independent To record which asset is

6 Future 2 4 Independent To be used in future if needed.

A. F. FERGUSON & CO. a member firm of Page 12 of 42

2.6 Depreciation Methods

In Oracle Assets, depreciation method is assigned to asset categories and defaults on

Sr. No. Asset Category Depreciation Rate

1 Land and Building 5%

A. F. FERGUSON & CO. a member firm of Page 13 of 42

2.7 Pro-Rate Convention

2.8 Asset tagging and numbering

2.9 Period Closing

A. F. FERGUSON & CO. a member firm of Page 14 of 42

Sr. No. Scenario Name Process Flow Ref.

1 Fixed Assets Overview 3.1