Oracle Applications White Paper ORACLE EBS R12 ASSETS CLOSING PERIOD PROCEDURES

Jan 2010

Author:

Mohamed Nazih CPA, PMP, Oracle Financials Consultant m.nazih@gmail.com

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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R12 Assets - Closing Period 2010

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 teamworking.

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R12 Assets - Closing Period 2010

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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R12 Assets - Closing Period 2010

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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R12 Assets - Closing Period 2010

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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R12 Assets - Closing Period 2010

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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R12 Assets - Closing Period 2010

Reconcile FA to GL
After posting, reconcile subledger details with General Ledger.

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R12 Assets - Closing Period 2010

Reconcile Asset Cost Account

Ending Balance of Assets Cost GL Accounts in Trial Balance Report Ending Balance of Assets Cost total in Cost Summary Report in Cost Detail Report Additions Adjustments Retirements Reclasses Transfers

Should equal

= Cost in Asset Additions Report

= Net Change in Cost Adjustments Report

= Cost Retired in Asset Retirements Report

= Cost in

= Cost in Asset Transfer Reconciliation Report

Asset Reclassification Reconciliation Report

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R12 Assets - Closing Period 2010

Reconcile Asset CIP Cost Account

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R12 Assets - Closing Period 2010

Reconcile Reserve Account

Ending Balance of Reserve GL Accounts in Trial Balance Report Ending Balance of Reserve total

in Reserve Summary Report in Reserve Detail Report

Should equal

Additions

Adjustments

Retirements

Reclasses

Depreciation

Transfers

= Accumulate Depreciation in Asset Additions Report

= Reserve Adjustment in

= Cost Retired - NBV Retired in

= Accumulated Depreciation in

= Depreciation in

= Cost in

Reserve Adjustments Report

Asset Retirements Report

Asset Reclassification Reconciliation Report

Account Reconciliation Reserve Ledger

Asset Transfers Report

Reconcile Depreciation Expense

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R12 Assets - Closing Period 2010

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

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