oracle ebs r12 assets period closing procedures

Oracle Applications White Paper

ORACLE EBS R12 ASSETS CLOSING

PERIOD PROCEDURES

Jan 2010

Author: Mohamed Nazih

CPA, PMP, Oracle Financials Consultant

[email protected]

Version 1.0

R12 Assets - Closing Period © 2010

Contents

About the Author ................................................................................... 3

Introduction ......................................................................................... 4

Purpose .............................................................................................. 4

Who Should Read This ............................................................................. 4 Oracle EBS R12 Assets - Closing Period Procedures ............................................ 5 Overview of the Period Close ............................................................................ 5 Complete Transactions.................................................................................... 5 Run Depreciation........................................................................................... 5 Create, Transfer, and Post Journals .................................................................... 6 Reconciling Journals Transfer Process.................................................................. 7 Reconciling Journals Import Process (GL).............................................................. 7 Reconcile FA to GL......................................................................................... 8

Reconcile Asset Cost Account ..................................................................................... 9 Reconcile Asset CIP Cost Account ............................................................................... 10 Reconcile Reserve Account ....................................................................................... 11 Reconcile Depreciation Expense ................................................................................. 11

Information Sources...............................................................................12

Information Sources...............................................................................12

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About the Author Mohamed Nazih is a Proficient functional consultant in Oracle e-Business Suite with more than six years of experience of solutions design, configuration, testing and documentation and three full life cycle implementations.

Prior to Oracle, he worked as a certified accountant and auditor for six years. This experience gave him an advantage to team up with financial staff in many companies in delivering high quality professional services, such as consulting, support, and training.

While not working, Mohamed Nazih takes care of his family. Furthermore, he is a self-learner and avid reader in project management, change management, business intelligence, science, and environment issues.

Mohamed Nazih values an atmosphere of ethics, punctuality, and team-working.

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Introduction Closing the books is a necessary step in the accounting cycle. In order to issue the financial statement, accounting staff must ensure that subledgers’ balances are cross checked with relevant General Ledger accounts’ balances.

Doing so in Oracle EBS R12, requires performing actions in order and running many reports to ascertain that ledgers and accounts are in harmony and no surprises will be discovered at year end.

Purpose This paper will help you understand the steps, order, and reports required to close Oracle Receivables period. Proper closing each month helps minimizing year end time needed to issue financial statements.

Who Should Read This This paper is aimed to super users and applications’ auditors, as well as functional consultants and implementers.

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Oracle EBS R12 Assets - Closing Period Procedures

Overview of the Period Close

At the end of each accounting period, companies must complete the closing process in Assets and reconcile Assets activity for the period.

Complete Transactions Completing all transactions for Oracle Assets:

Prepare and Post Mass Additions

Complete Manual Additions, Adjustments, Transfers, Retirements, and Reinstatements

Ensure that:

All transactions have been entered for the period being closed

o Once a depreciation period in Oracle Assets has been closed, it cannot be re-opened

All assets have been assigned to a distribution line. Otherwise, period end Depreciation Process will not complete, and will not close the period. Run:

o Assets Not Assigned To Any Books

o Assets Not Assigned To Any Cost Centers

No transactions are being entered as Oracle Assets prevents transaction data entry while the Depreciation Run Process is running

Run Depreciation Run Depreciation process is performed independently for each asset book

When the process is run, Oracle Assets automatically calculates depreciation for all assets, calculates gains and losses for all retirements, and then runs the appropriate Reserve Ledger Report

Ensure to:

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Run Depreciation without closing the period

Review Journal Entry Reserve Ledger Report for Cost, calculated depreciation expense, and accumulated depreciation

Make necessary activities

Re-Run Depreciation without closing the period and review the Reserve Ledger Report again

Run Depreciation with closing the period

Create, Transfer, and Post Journals Run Accounting after processing all postable records.

The following approach may be applied After an asset addition:

Run Create Accounting - Assets for the Addition Process Category to send Cost and Cost Clearing lines to GL

Run Depreciation without closing the period

After depreciation runs, you can run the Create Accounting for the Depreciation Process Category to get the Depreciation Expense and Reserve lines sent to GL

If needed you can later update the asset and enter whatever transaction is needed. (for example : cost adjustment). For this particular asset, the depreciation data is automatically rolled back

And then run Create Accounting to send to GL the adjustment journal and the reversal journal for Rollback Depreciation (in which the prior depreciation expense is credited and the reserve is debited):

o Rerunning depreciation will then depreciate again this asset And Create Accounting will send to GL new Depreciation lines

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Reconciling Journals Transfer Process Subledger Accounting Program report:

Is produced by Create Accounting program

Shows subledger journal entries created for successful accounting events

Journal Entries report (in Posted status mode):

includes all transactions that should be posted to General Ledger (i.e. associated transaction type has Post to GL set to Yes)

displays:

o details of what is or will be posted to each GL account for a specific period and

o Journals by receivables categories

Ensure the following is correct

Subledger Accounting Program report total should equal Journal Entries report total

Reconciling Journals Import Process (GL) Journal Import Execution report:

Is produced by (GL) journal import process

Shows total debits and credits for the journals it created

Posting Execution report: Is produced by (GL) journal posting journals process

Unposted Journals report

General Journals report

Ensure the following is correct: total of these report should equal (what is transferred by Receivables = what is posted by GL)

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Reconcile FA to GL

After posting, reconcile subledger details with General Ledger.

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Reconcile Asset Cost Account

Asset Additions

Report

Cost Adjustments

Report

Asset Retirements

Report

Cost Detail Report

Asset Reclassification Reconciliation

Report

Asset Transfer Reconciliation

Report

Additions Adjustments Retirements Reclasses Transfers

= Cost in = Net Change in = Cost Retired in = Cost in = Cost in

Ending Balance of Assets’ Cost GL Accounts

Trial Balance Report

Should equal

in

Ending Balance of Assets’ Cost

total

Cost Summary Report

in

in

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Reconcile Asset CIP Cost Account

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Reconcile Reserve Account

Ending Balance of Reserve GL

Accounts

Asset Additions Report

Reserve Adjustments

Report

Asset Retirements

Report

Trial Balance Report

Reserve Detail Report

Should equal

in

Ending Balance of Reserve total

Reserve Summary Report

in

Asset Reclassification Reconciliation

Report

Asset Transfers

Report

Additions Adjustments Retirements Reclasses Transfers

= Accumulate Depreciation

in

= Reserve Adjustment in

= Cost Retired - NBV Retired in

= Cost in

in

Account Reconciliation

Reserve Ledger

Depreciation

= Depreciation in= AccumulatedDepreciation in

Reconcile Depreciation Expense

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Information Sources o Metalink Note: 557948.1

o Metalink Note: 961285.1

o Reconciling Oracle Assets . Whitepaper by Brian R. Bouchard, September 10, 2007 (Oracle Community)

o Oracle Assets User's Guide Release 12.1 Part No. E13586-02