Fixed Assets Accounting Entries.doc

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Fixed Assets Accounting Entries

Mass Additions Accounting Entries

Case 1: Current Period Addition

Example: The recoverable cost is $4,000 and method is straight-line 4years. we purchase and place asset into service in Year 1, Quarter 1.

Payables System - Current Period Addition

Dr. Asset Clearing 4,000

Cr. Accounts Payable Liability 4,000

Oracle Assets - Current Period Addition

Dr. Asset Cost 4,000.00

Dr. Depreciation Expense 250.00

Cr. Asset Clearing 4,000.00

Cr. Accumulated Depreciation 250.00

Case 2: Prior Period Addition

You place an asset in service in Year 1, Quarter 1, but we do not enter it intoOracle Assets until Year 2, Quarter 2. The payables system creates samejournal entries to asset clearing and accounts payable liability as for acurrent period addition.

Payables System - Prior Period Addition

Dr. Asset Clearing 4,000


Oracle Assets Prior Period Addition



Dr. Depreciation Expense (Adjustment) 1,250.00

Cr. Asset Clearing 4,000.00

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Cr. Accumulated Depreciation 1,500.00

Merge Mass Additions Accounting EntriesOracle Assets creates journal entries for the asset cost account for the massaddition into which the others were merged. Oracle Assets creates journalentries for each asset clearing account. For example, we merge massaddition #1 into mass addition #2, so Oracle Assets creates journal entries:

Payables System

Dr. Asset Cost(mass addition #2 asset cost account)

4,000.00

Cr. Asset Clearing(mass addition #1 accountspayableclearing account)

3,000.00

Cr. Asset Clearing(mass addition #2 accountspayableclearing account)

1,000.00


Construction-In-Process (CIP) Addition AccountingEntries

Oracle Assets

Dr. CIP Cost 4,000

Cr. CIP Clearing 4,000

Deleted Mass Additions no AccountingEntries

Oracle Assets creates no journal entries for deleted mass additions and doesnot clear the asset clearing accounts credited by accounts payable. we clear

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the accounts by either reversing the invoice in payables system, or creatingmanual journal entries in general ledger.

Capitalization Accounting Entries

A capitalization transaction is similar to an addition transaction: when weplace the asset in service so you can begin depreciating it. When wecapitalize an asset in the period you added it, Oracle Assets creates thefollowing journal entries:

Payables System Accounting Entries

Dr. CIP Cost 4,000


Oracle Assets - CAPITALIZED IN PERIOD ADDED



Cr. CIP Clearing 4,000.00


When we capitalize an asset in a period after the period added it, OracleAssets creates journal entries that transfer the cost from CIP cost account to

asset cost account.

Oracle Assets - CAPITALIZED After PERIOD ADDED



Cr. CIP Cost 4,000.00


Asset Type Adjustments Accounting Entries

If we change the asset type from capitalized to CIP, Oracle Assets createsjournal entries to debit the CIP cost account and credit the asset clearingaccount. Oracle Assets does not create capitalization or reversecapitalization journal entries for CIP reverse transactions. Oracle Assets Change Type from CAPITALIZED TO CIP (CURRENT PERIOD)

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Dr. CIP Cost 4,000

Cr. Asset Clearing 4,000

Journal Entries for Depreciation

When we run depreciation, Oracle Assets creates journal entries foraccumulated depreciation accounts and depreciation expense accounts.Oracle Assets creates journal entries for a current period depreciation chargeof $200 and a bonus charge of $50:

Oracle Assets


Dr. Bonus Expense 50.00


Cr. Bonus Reserve 50.0

Journal Entries for Retirements

When you retire an asset and create journal entries for that period, OracleAssets creates journal entries for your general ledger for each component ofthe gain/loss amount. Oracle Assets creates journal entries for either thegain or the loss accounts for the following components: proceeds of sale,cost of removal, net book value retired, and revaluation reserve retired.Oracle Assets also creates journal entries to clear the proceeds of sale andcost of removal.

Oracle Assets creates journal entries for the retirement accounts you set upin the Book Controls window. If you enter distinct gain and loss accounts foreach component of the gain/loss amount, Oracle Assets creates multiplejournal entries for these accounts. You can enter different sets of retirementaccounts for retirements that result in a gain and retirements that result in aloss.

Depreciation for Retirements JournalEntries

Case 1: Current Period Retirements Journal Entries

Example: when we place an asset in service in Year 1, Quarter 1. The assetcost is $4,000, the life is 4 years, and when we are using straight-line

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depreciation. In Year 3, Quarter 3, we sell the asset for $2,000. The cost toremove the asset is $500. The asset uses a retirement convention anddepreciation method which takes depreciation in the period of retirement.You retire revaluation reserve in this book.

Receivables System

Dr. Accounts Receivable 2,000.00

Cr. Proceeds of Sale Clearing 2,000.00

Payables System

Dr. Cost of Removal Clearing 500.00

Cr. Accounts Payable 500.00

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Case 2: If we enter the same account for each gain and loss account, OracleAssets creates a single journal entry for the net gain or loss as shown in thefollowing table:

Book Controls window:

Accounts Gain Loss

Proceeds of Sale 1000 1000

Cost of Removal 1000 1000

Net Book Value Retired 1000 1000

Revaluation Reserve Retired 1000 1000

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Oracle Assets - MULTIPLE GAIN/LOSS ACCOUNTS

Dr. Accumulated Depreciation 2,500.00

Dr. Proceeds of Sale Clearing 2,000.00

Dr. Cost of Removal Gain 500.00

Dr. Revaluation Reserve 600.00

Dr. Net Book Value Retired Gain 1,500.00

Cr. Asset Cost 4,000.00

Cr. Proceeds of Sale Gain 2,000.00

Cr. Cost of Removal Clearing 500.00

Cr. Revaluation Reserve Retired Gain 600.00


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Oracle Assets - SINGLE GAIN/LOSS ACCOUNT






Cr. Gain/Loss 600.00

Case 3: Prior Period Retirement Journal Entries

Example: when we place an asset in service in Year 1, Quarter 1. The assetcost is $4,000, the life is 4 years, and you are using straight-linedepreciation. In Year 3, Quarter 3, you discover that the asset was sold inYear 3, Quarter 1, for $2,000. The removal cost was $500. The asset uses aretirement convention and depreciation method which allows to takedepreciation in the period of retirement.

Receivables System

Dr. Accounts Receivable 2,000.00


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Payables System


Cr. Accounts Payable 500.00

Oracle Assets



Dr. Cost of Removal Loss 500.00

Dr. Net Book Value Retired Loss 1,750.00

Cr. Proceeds of Sale Loss 2,000.00



Cr. Depreciation Expense 250.00

Depreciation for Retirements JournalEntries

Case 1: Current Period Reinstatement Journal Entries

Example:You discover that you retired the wrong asset. Oracle Assetscreates journal entries for the reinstatement to debit asset cost, creditaccumulated depreciation, and reverse the gain or loss you recognized forthe retirement. Oracle Assets reverses the journal entries for proceeds ofsale, cost of removal, net book value retired, and revaluation reserve retired.

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Oracle Assets also reverses the journal entries you made to clear theproceeds of sale and cost of removal.

Oracle Assets also creates journal entries to recover the depreciation notcharged to the asset and for the current period depreciation expense.

Oracle Assets



Dr. Gain / Loss 600.00




Cr. Revaluation Reserve 600.00

Case 2: Prior Period Reinstatement Journal Entries

Example:You place an asset in service in Year 1, Quarter 1. The asset costis $4,000, the life is 4 years, and you are using straight-line depreciation. InYear 2, Quarter 1, you retire the asset. In Year 2, Quarter 4, you realize thatyou retired the wrong asset so you reinstate it.

Oracle Assets



Dr. Proceeds of Sale Loss 2,000.00



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(adjustment)

Cr. Net Book Value Retired Loss 2,750.00

Cr. Cost of Removal Loss 500.00



Assets Fully Reserved Upon Addition JournalEntries

If you add an asset with an accumulated depreciation equal to therecoverable cost, it is fully reserved upon addition. When you retire it, OracleAssets does not back out any depreciation, even if you assigned the asset adepreciation method that backs out all depreciation in the year ofretirement. However, it creates all the other journal entries associated withretiring a capitalized asset.

Non-Depreciated Capitalized/Construction-In-Process(CIP) Assets no Journal Entries

A non-depreciated capitalized asset or a CIP asset has no accumulateddepreciation. Therefore, Oracle Assets does not create journal entries tocatch up depreciation to the retirement prorate date, and does not removethe accumulated depreciation. However, Oracle Assets creates all otherjournal entries associated with retiring a capitalized asset.

Reinstatement Transactions NO JournalEntries

PENDING Asset Retirement

When you reinstate an asset retired in the current accounting period that thecalculate gains and losses program has not yet processed, the retirement

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transaction is deleted, and the asset is immediately reinstated. No journalentries are created.

PROCESSED Asset Retirement

When you reinstate an asset retired in a previous accounting period oralready processed in the current period, the existing retirement transactiongets a new Status REINSTATE, and the asset is reinstated when you processretirements. Oracle Assets creates journal entries to catch up any misseddepreciation expense.

Revaluations Journal Entries

Case 1: Revalue Accumulated Depreciation

Example 1: You place an asset in service in Year 1, Quarter 1. The asset

cost is $10,000, the life is 5 years, and you are using straight-linedepreciation.

In Year 2, Quarter 1 you revalue the asset using a revaluation rate of 5%.Then in Year 4, Quarter 1 you revalue the asset again using a revaluationrate of -10%.

Revaluation Rules:

o Revalue Accumulated Depreciation = Yes

o Amortize Revaluation Reserve = No

o Retire Revaluation Reserve = No

Oracle Assets bases the new depreciation expense on the revaluedremaining net book value.

In Year 5, Quarter 4, at the end of the asset's life, you retire the asset withno proceeds of sale or cost of removal.

The effects of the revaluations are illustrated in the following table:

Period (Yr,

Qtr.)

Asset

Cost

Deprn.

Expense

Accum.

Deprn.

Reval.

Reserve

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Yr1,Q1 10,000.00 500.00 500.00 0.00

Yr1,Q2 10,000.00 500.00 1,000.00 0.00

Yr1,Q3 10,000.00 500.00 1,500.00 0.00

Yr1,Q4 10,000.00 500.00 2,000.00 0.00

Reval. 1 5% 10,500.00 0.00 *2,100.00 **400.00

Yr2,Q1 10,500.00 525.00 2,625.00 400.00

Yr2,Q2 10,500.00 525.00 3,150.00 400.00

Yr2,Q3 10,500.00 525.00 3,675.00 400.00

Yr2,Q4 10,500.00 525.00 4,200.00 400.00

Yr3,Q1 10,500.00 525.00 4,725.00 400.00

Yr3,Q2 10,500.00 525.00 5,250.00 400.00

Yr3,Q3 10,500.00 525.00 5,775.00 400.00

Yr3,Q4 10,500.00 525.00 6,300.00 400.00

Reval. 2 -10% 9,450.00 0.00 *5,670.00 **-20.00

Yr4,Q1 9,450.00 472.50 6,142.50 -20.00

Yr4,Q2 9,450.00 472.50 6,615.00 -20.00

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Yr4,Q3 9,450.00 472.50 7,087.50 -20.00

Yr4,Q4 9,450.00 472.50 7,560.00 -20.00

Yr5,Q1 9,450.00 472.50 8,032.50 -20.00

Yr5,Q2 9,450.00 472.50 8,505.00 -20.00

Yr5,Q3 9,450.00 472.50 8,977.50 -20.00

Yr5,Q4 9,450.00 472.50 9,450.00 -20.00

Retire 0.00 0.00 0.00 -20.00

REVALUATION 1

Year 2, Quarter 1, 5% revaluation

*Accumulated Depreciation =

Existing Accumulated Depreciation +

[Existing Accumulated Depreciation x (Revaluation Rate / 100)]

2,000 + [2,000 X (5/100)] = 2,100

**Revaluation Reserve =

Existing Revaluation Reserve + Change in Net Book Value

0 + (8,400 - 8,000) = 400

Oracle Assets - REVALUATION

Dr. Asset Cost 500.00

Cr. Revaluation Reserve 400.00


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REVALUATION 2

-10% revaluation in Year 4, Quarter 1:



Dr. Accumulated Depreciation 630.00


Retirement in Year 5, Quarter 4:




Case 2: Accumulated Depreciation Not Revalued

Example 2: You place an asset in service in Year 1, Quarter 1. The assetcost is $10,000, the life is 5 years, and you are using straight-linedepreciation.

In Year 2, Quarter 1 you revalue the asset using a revaluation rate of 5%.Then in Year 4, Quarter 1 you revalue the asset again using a revaluationrate of -10%.

Revaluation Rules:

o Revalue Accumulated Depreciation = No


o Retire Revaluation Reserve = Yes

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For the first revaluation, the asset's new revalued cost is $10,500. Since youdo not revalue the accumulated depreciation, Oracle Assets transfers thebalance to the revaluation reserve in addition to the change in cost.

Since you are also not amortizing the revaluation reserve, this amount

remains in the revaluation reserve account until you retire the asset, whenOracle Assets transfers it to the appropriate revaluation reserve retiredaccount. Oracle Assets bases the new depreciation expense on the revaluednet book value.

For the second revaluation, the asset's revalued cost is $9,450. Again, sinceyou do not revalue the accumulated depreciation, Oracle Assets transfers thebalance to the revaluation reserve along with the change in cost.

You retire the asset in Year 5, Quarter 4, with no proceeds of sale or cost ofremoval.


Period (Yr,

Qtr.)

Asset

Cost

Deprn.

Expense

Accum.

Deprn.

Reval.

Reserve

Yr1,Q1 10,000.00 500.00 500.00 0.00

Yr1,Q2 10,000.00 500.00 1,000.00 0.00

Yr1,Q3 10,000.00 500.00 1,500.00 0.00

Yr1,Q4 10,000.00 500.00 2,000.00 0.00

Reval. 1 5% 10,500.00 0.00 0.00 *2,500.00

Yr2,Q1 10,500.00 **656.25 6,56.25 2,500.00

Yr2,Q2 10,500.00 656.25 1,312.50 2,500.00

Yr2,Q3 10,500.00 656.25 1,968.75 2,500.00

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Yr2,Q4 10,500.00 656.25 2,625.00 2,500.00

Yr3,Q1 10,500.00 656.25 3,281.25 2,500.00

Yr3,Q2 10,500.00 656.25 3,937.50 2,500.00

Yr3,Q3 10,500.00 656.25 4,593.75 2,500.00

Yr3,Q4 10,500.00 656.25 5,250.00 2,500.00

Reval. 2 -10% 9,450.00 0.00 0.00 *6,700.00

Yr4,Q1 9,450.00 **1,181.25 1,181.25 6,700.00

Yr4,Q2 9,450.00 1,181.25 2,362.50 6,700.00

Yr4,Q3 9,450.00 1,181.25 3,543.75 6,700.00

Yr4,Q4 9,450.00 1,181.25 4,725.00 6,700.00

Yr5,Q1 9,450.00 1,181.25 5,906.25 6,700.00

Yr5,Q2 9,450.00 1,181.25 7,087.50 6,700.00

Yr5,Q3 9,450.00 1,181.25 8,268.75 6,700.00

Yr5,Q4 9,450.00 1,181.25 9,450.00 6,700.00

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REVALUATION 1 : 5% revaluation in Year 2, Quarter 1:




Cr. Revaluation Reserve 2,500.00

REVALUATION 2 : -10% revaluation in Year 4, Quarter 1:





Retirement in Year 5, Quarter 4:



Dr. Revaluation Reserve 6,700.00

Cr. Revaluation Reserve Retired Gain 6,700.00


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Case 3: Amortizing Revaluation Reserve

Example 3: You place an asset in service in Year 1, Quarter 1. The asset

cost is $10,000, the life is 5 years, and you are using straight-linedepreciation.

In Year 2, Quarter 1 you revalue the asset using a rate of 5%. Then in Year 4,Quarter 1 you revalue the asset again using a rate of -10%.

Revaluation Rules:


o Amortize Revaluation Reserve = Yes

For the first revaluation, the asset's new revalued cost is $10,500. Since youdo not revalue the accumulated depreciation, Oracle Assets transfers theentire amount to the revaluation reserve. Since you are amortizing therevaluation reserve, Oracle Assets calculates the revaluation amortizationamount for each period using the asset's depreciation method. Oracle Assetsalso bases the new depreciation expense on the revalued net book value.

For the second revaluation, the asset's revalued cost is $9,450. Again, sinceyou do not revalue the accumulated depreciation, Oracle Assets transfers theentire amount to the revaluation reserve.


Period

(Yr,Qtr.)

Asset

Cost

Deprn.

Expense

Accum.

Deprn.

Reval.

Amortize

Reval.

Reserve

Yr1,Q1 10,000.0

0

500.00 500.00 0.00 0.00

Yr1,Q2 10,000.0

0

500.00 1,000.00 0.00 0.00

Yr1,Q3 10,000.0

0

500.00 1,500.00 0.00 0.00

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Yr1,Q4 10,000.0

0

500.00 2,000.00 0.00 0.00

Reval. 1

5%

10,500.0

0

0.00 0.00 0.00 *2,500.00

Yr2,Q1 10,500.0

0

**656.25 656.25 ***156.25 2,343.75

Yr2,Q2 10,500.0

0

656.25 1,312.50 156.25 2,187.50

Yr2,Q3 10,500.0

0

656.25 1,968.75 156.25 2,031.25

Yr2,Q4 10,500.0

0

656.25 2,625.00 156.25 1,875.00

Yr3,Q1 10,500.00 656.25 3,281.25 156.25 1,718.75

Yr3,Q2 10,500.0

0

656.25 3,937.50 156.25 1,562.50

Yr3,Q3 10,500.0

0

656.25 4,593.75 156.25 1,406.25

Yr3,Q4 10,500.0

0

656.25 5,250.00 156.25 1,250.00

Reval. 2

-10%

9,450.00 0.00 0.00 0.00 *5,450.00

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Yr4,Q1 9,450.00 **1,181.25 1,181.25 ***681.25 4,768.75

Yr4,Q2 9,450.00 1,181.25 2,362.50 681.25 4,087.50

Yr4,Q3 9,450.00 1,181.25 3,543.75 681.25 3,406.25

Yr4,Q4 9,450.00 1,181.25 4,725.00 681.25 2,725.00

Yr5,Q1 9,450.00 1,181.25 5,906.25 681.25 2,043.75

Yr5,Q2 9,450.00 1,181.25 7,087.50 681.25 1,362.50

Yr5,Q3 9,450.00 1,181.25 8,268.75 681.25 681.25

Yr5,Q4 9,450.00 1,181.25 9,450.00 681.25 0.00

REVALUATION 1 : Year 2, quarter 1, 5% revaluation





Oracle Assets creates journal entries each period to amortize the revaluation

reserve:



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Cr. Revaluation Amortization 156.25

REVALUATION 2 :Year 4, quarter 1, -10% revaluation





Oracle Assets creates journal entries each period to amortize the revaluation

Reserve




Case 4: Revaluation of a Fully Reserved Asset

Example 4: You place an asset in service in Year 1, Quarter 1. The assetcost is $10,000, the life is 5 years, and you are using straight-linedepreciation. The asset's life extension factor is 2 and the maximum fullyreserved revaluations allowed for this book is 3.

In year 5, quarter 4 the asset is fully reserved. In Year 9, Quarter 1 you wantto revalue the asset with a revaluation rate of 5%.

Revaluation Rules:



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First, Oracle Assets checks whether this fully reserved asset has beenpreviously revalued as fully reserved, and that the maximum number oftimes is not exceeded by this revaluation. Since this asset has not beenpreviously revalued as fully reserved, this revaluation is allowed.

The asset's new revalued cost is $10,500. The life extension factor for thisasset is 2, so the asset's new life is 2 X 5 years = 10 years. Oracle Assetscalculates depreciation expense over its new life of 10 years. Oracle Assetscalculates the depreciation adjustment of $2,000 using the new 10 yearasset life. It transfers the change in net book value to the revaluation reserveaccount.

Oracle Assets revalues the accumulated depreciation using the 5%revaluation rate. The change in net book value is transferred to therevaluation reserve account. Since you do not amortize the revaluationreserve, the amount remains in the revaluation reserve account.

The effect of the revaluation is illustrated in the following table:

Period (Yr,

Qtr.)

Asset

Cost

Deprn.

Expense

Accum.

Deprn.

Reval.

Reserve

Yr1 to Yr4

Yr5,Q1 10,000.00 500.00 8,500.00 0.00

Yr5,Q2 10,000.00 500.00 9,000.00 0.00

Yr5,Q3 10,000.00 500.00 9,500.00 0.00

Yr5,Q4 10,000.00 500.00 10,000.00 0.00

Reval. 5% 10,500.00 0.00 *8,400.00 **2,100.00

Yr9,Q1 10,500.00 ***262.50 8,662.50 2,100.00

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Yr9,Q2 10,500.00 262.50 8,925.00 2,100.00

Yr9,Q3 10,500.00 262.50 9,187.50 2,100.00

Yr9,Q4 10,500.00 262.50 9,450.00 2,100.00

Yr10,Q1 10,500.00 262.50 9,712.50 2,100.00

Yr10,Q2 10,500.00 262.50 9,975.00 2,100.00

Yr10,Q3 10,500.00 262.50 10,237.50 2,100.00

Yr10,Q4 10,500.00 262.50 10,500.00 2,100.00





Case 5: Revaluation with Life Extension Ceiling

Example 5: You place an asset in service in Year 1, Quarter 1. The assetcost is $10,000, the life is 5 years, and you are using straight-linedepreciation. The asset's life extension factor is 3.0 and its life extensionceiling is 2.

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In Year 5, Quarter 4 the asset is fully reserved. In year 9, quarter 1 you wantto revalue the asset with a revaluation rate of 5%.

Revaluation Rules:



To determine the depreciation adjustment, Oracle Assets uses the smaller ofthe life extension factor and the life extension ceiling. Since the lifeextension ceiling is smaller than the life extension factor, Oracle Assets usesthe ceiling to calculate the depreciation adjustment. The new life used tocalculate the depreciation adjustment is 2 X 5 years = 10 years, the lifeextension ceiling of 2 multiplied by the original 5 year life of the asset.

Oracle Assets calculates the asset's depreciation expense under the new lifeof 10 years up to the revaluation period, and moves the difference betweenthis value and the existing accumulated depreciation from accumulateddepreciation to revaluation reserve.

Oracle Assets then determines the new asset cost using the revaluation rateof 5% and revalues the accumulated depreciation with the same rate. OracleAssets calculates the asset's new life by multiplying the current life by thelife extension factor. The asset's new life is 3 X 5 years = 15 years. OracleAssets bases the new depreciation expense on the revalued net book valueand the new 15 year life.


Period (Yr,

Qtr.)

Asset

Cost

Deprn.

Expense

Accum.

Deprn.

Reval.

Reserve

Yr1 to Yr4

Yr5,Q1 10,000.00 500.00 8500.00 0.00

Yr5,Q2 10,000.00 500.00 9000.00 0.00

Yr5,Q3 10,000.00 500.00 9,500.00 0.00

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Yr5,Q4 10,000.00 500.00 10,000.00 0.00

Reval. 5% 10,500.00 0.00 *8,400.00 **2,100.00

Yr9,Q1 10,500.00 ***75.00 8,475.00 2,100.00

Yr9,Q2 10,500.00 75.00 8,550.00 2,100.00

Yr9,Q3 10,500.00 75.00 8,625.00 2,100.00

Yr9,Q4 10,500.00 75.00 8,700.00 2,100.00

Yr10 to

Yr15

Depreciation Adjustment (calculated using life extension ceiling)= 2,000





Case 6: Revaluation with a Revaluation Ceiling

Example 6: You own an asset which has been damaged during its life. Youplaced the asset in service in Year 1, quarter 1. The asset cost is $10,000,

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the life is 5 years, and you are using straight-line depreciation. You entered arevaluation ceiling of $10,300 for the asset.

In year 3, quarter 3 you revalue the asset's category with a revaluation rateof 5%.

Revaluation Rules:


o Amortize Revaluation Reserve = Yes

If Oracle Assets applied the new revaluation rate of 5%, the asset's new costwould be higher than the revaluation ceiling for this asset, so instead OracleAssets uses the ceiling as the new cost. The ceiling creates the same effectas revaluing the asset at a rate of 3%. Oracle Assets bases the asset's new

depreciation expense on the revalued asset cost.


Period (Yr,

Qtr.)

Asset

Cost

Deprn.

Expense

Accum.Dep

rn.

Reval.

Amortize

Reval.

Reserve

Yr1 to Yr 2

Yr3,Q1 10,000.

00

500.00 4,500.00 0.00 0.00

Yr3,Q2 10,000.

00

500.00 5,000.00 0.00 0.00

Reval. *3% 10,300.

00

0.00 0.00 0.00 **5,300.00

Yr3,Q3 10,300.

00

***1,030.00 1,030.00 ****530.00 4,770.00

Yr3,Q4 10,300. 1,030.00 2,060.00 530.00 4,240.00

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00

Yr4,Q1 10,300.

00

1,030.00 3,090.00 530.00 3,710.00

Yr4,Q2 10,300.

00

1,030.00 4,120.00 530.00 3,180.00

Yr4,Q3 10,300.

00

1,030.00 5,150.00 530.00 2,650.00

Yr4,Q4 10,300.

00

1,030.00 6,180.00 530.00 2,120.00

Yr5,Q1 10,300.

00

1,030.00 7,210.00 530.00 1,590.00

Yr5,Q2 10,300.

00

1,030.00 8,240.00 530.00 1,060.00

Yr5,Q3 10,300.00 1,030.00 9,270.00 530.00 530.00

Yr5,Q4 10,300.

00

1,030.00 10,300.00 530.00 0.00





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Oracle Assets creates journal entries each period to amortize the revaluationreserve:




Tax Accumulated Depreciation Adjustments Journal

Entries

Example:You place an asset in service in Year 1, Quarter 1. The asset costis $4,000, the life is 4 years, and you are using straight-line depreciation. InYear 4, Quarter 1, your tax authority requests that you change thedepreciation taken in Year 2 from $1000 to $800.

Oracle Assets creates the following journal entries for the reserveadjustment:

Oracle Assets


Cr. Depreciation Adjustment 200.00

Cost Adjustments to Capitalized and CIP Source Lines

When you transfer source lines you adjust the recoverable cost of an asset.Depreciationis calculated based on the asset type.

Case 1: Transfer Source Lines between Capitalized Assets

Oracle Assets creates the following journal entries for a source line transfer betweencapitalized assets

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Oracle Assets

Dr. Asset Cost (from destinationasset category)

400.00

Cr. Asset Cost (from source assetcategory

400.00

.

Oracle Assets

Dr. Accumulated Depreciation(from source asset category)

70.00


Oracle Assets


Dr. Depreciation Expense(adjustment)

70.00

Cr. Accumulated Depreciation(from source asset category)

125.00

Case 2: Transfer Source Lines From Capitalized Assets to CIP Assets

When you transfer source lines from capitalized to CIP assets, Oracle Assets must back outsome of the depreciation from the capitalized asset, because CIP assets do not depreciate.Oracle Assets creates the following journal entries for a source line transfer betweencapitalized assets and CIP assets:

Oracle Assets


400.00

Cr. Asset Cost (from source assetcategory 400.00

Oracle Assets


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(from source asset category)


Case 3: Transfer Source Lines from CIP Assets to Capitalized Assets

When you transfer source lines from CIP to capitalized assets, Oracle Assets takes catchupdepreciation as for any cost adjustment transaction.Oracle Assets creates the following journal entries for a source line transfer between CIPassets and capitalized assets

Oracle Assets


400.00

Cr. CIP Asset Cost (from sourceasset category) 400.00

Oracle Assets

Dr. Depreciation Expense (fromsource asset category)

250.00

Cr. Accumulated DepreciationExpense (from destinationasset category)

250.00

Case 4: Transfer Source Lines between CIP Assets

Oracle Assets does not need to reverse depreciation expense when you transfer invoicelines between CIP assets Because CIP assets do not depreciate.Oracle Assets creates the following journal entries for a source line transfer between CIPassets:

Oracle Assets

Dr. CIP Asset Cost (fromdestination asset category) 250.00

Cr. CIP Asset Cost (from sourceasset category)

250.00

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Cost Adjustment by Adding a Mass Addition to an ExistingAsset

If you add a mass addition to an asset, Oracle Assets creates a journal entry to the assetcost account of the existing asset. Oracle Assets also credits the clearing account you

assigned to the invoice distribution line in accounts payable to net it to zero.If you want the existing asset to assume the asset category and description of the massaddition, Oracle Assets creates a journal entry for the new total asset cost to the asset costaccount of the mass additions category. It also creates journal entries for the clearingaccount you assigned to the invoice line in accounts payable, and for the clearing or costaccount of the original addition category.

Oracle Assets creates the following journal entries for a capitalized $2,000 mass additionadded to a new, manually added $500 asset, where the asset uses the category of the massaddition:

Oracle Assets

Dr. Asset Cost (from assetcategory of mass addition) 2500.00

Cr. Asset Clearing (from originalasset category)

500.00

Cr. Asset Clearing (from originalasset category)

2000.00

Depreciation Method Adjustments Accounting

Entries

Example:You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000,the life is 4 years, and you are using the 200 declining balance depreciation method. In Year2, Quarter 1, you change the depreciation method to straight-line.

Expensed:

Oracle Assets



Cr. Depreciation Expense (adjustment) 1000.00

Amortized:

Oracle Assets

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Documents

Fixed Assets Accounting Entries.doc