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Swarup Ghosal Chaudhary, Project Manager Wipro Saurabh Chakravarthy Bala S.K
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Shalini Pal
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Contents
Document Control........................................................................................ii Introduction ................................................................................................4 About Company.....................................................................................4 Document Scope and Assumptions........................................................4 ABRL HO Finance...................................................................................4 Key Issues Highlighted /Observed..........................................................5 Key Business Process Improvement.......................................................5 Legend......................................................................................................... 6 Fixed Assets Process....................................................................................8 Event Catalog for Fixed Assets ...................................................................9 Process Descriptions for Fixed Assets........................................................10 Fixed Assets Future Process Flow in Application........................................11 ABRL Future Business Process Flow ....................................................12 FA-P001: Prepare Mass Additions ........................................................12 FA-P002: Post Mass Additions..............................................................14 FA-P003: Manual Additions...................................................................17 FA-P004: Enter CIP Asset......................................................................19 FA-P005: Asset Maintenance................................................................21 FA-P006: Adjustments - Financial and Other Asset Information...........23 FA-P007: Asset Retirement..................................................................25 FA-P008: Asset Transfer.......................................................................27 FA-P009: Manage Construction in Progress Assets...............................29 FA-P010: Depreciate Assets.................................................................31 FA-P011: Period Close Process.............................................................32 FA-P012: Create Accounting ................................................................35 Open and Closed Issues.............................................................................37 Open Issues......................................................................................... 37 Closed Issues.......................................................................................37
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Introduction
About Company
ABRL Profile
Aditya Biral Retail Limited belongs to the USD 28 Billion Corporation that is in the league of fortune 500. ABRL made its foray into retail market in 2006 by acquiring Trinethra, a retail chain of super markets in south India and with over 170 Outlets. Spread across the four southern states of Tamilnadu, Karnataka, Andhra Pradesh and Kerala respectively. In May 2007 ABRL launched its own Brand of retail stores More. More Spread its wings in Super Markets and Hyper markets ranging from an area of 10000 Sq.Feet to 75000 Sq.feet, more. has till date around 100 Super Markets in locations across Pune, Vizag, Delhi, Bangalore & Vijayawada.
Process descriptions
The proposed solution uses the standard Oracle Application Release 12.0.5 with India Localization which is an integrated Module of Supply Chain, Oracle Financials. Oracle Assets module provides the basis for creation, tracking and maintenance of fixed assets. Those business functions identified as not being sufficiently catered for by the standard system will be addressed during detailed analysis in Phase - II of the implementation cycle. We may propose to change the business practices or will propose workarounds that can be fulfilled using standard Oracle applications. In the event of these options are not able to meet ABRL requirements, we may look at the possibility of customizing the functionality and features of the standard modules. This will be a last resort as our intention will be to keep the system as standard as possible. If customization is unavoidable, we will try to make the processes external to Oracle Assets module. Our objective is to avoid modifications to the core logic and procedures of the Oracle Assets system. Upon acceptance of this document, we will carry out the business mapping for the Assets system and a gap list will be produced addressing the business areas that are not supported by the standard Oracle Assets module. We will also suggest the workarounds (if any) in the same document. It is important that all key users and the IT key users go through this document and identify any areas that we may not have addressed or are not to be implemented due to operational reasons. Such items need to be addressed at this stage to ensure smooth deployment of the system.
ABRL HO Finance
The HO Accounts in ABRL is responsible for maintaining the Financial and Management accounts in the company. The Fixed assets processing activities of ABRL are currently performed using FAMS/Navision system. In ABRL all Fixed Assets reports are performed manually using FAMS, an offline System The Accounts Department matches Supplier Invoices with Receipts and then they manually record the items as fixed assets in the System.
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The objective of this document is to recommend the High level Process model for the Fixed Assets functions in ABRL. Future process model will be used as the basis for the Oracle Product mapping. ABRL Proposes to maintain a single Corporate Book that will be associated with HO Ledger.
In ABRL, journal entries relating to Fixed Assets are passed in the General Ledger manually. In ABRL, Depreciation under Income Tax are calculated separately in Excel Sheet. ABRL Follows a Straight line Method of Depreciating Assets based on the rates for the relevant assets/category of assets. In ABRL, Store opening date is the cutoff date for capitalizing the assets for that Location ABRL Capex procurement, Invoicing, payment and capitalization process is centralized Transfer of Asset related financial information namely Asset cost and depreciation expense to the Concerned State ledger is not possible as a single FA book can be attached to a single ledger only.
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Legend
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The Asset Register is referred to as an Asset Book i.e. Corporate Book in the Oracle Assets. The journal of all the financial transactions of an Asset Book is done in the GL. Hence every asset book should be associated with a GL. Fixed Assets has three flex fields that assist in codification and classification of assets.
Depreciation Calendar
Depreciation calendar is the calendar, which the entire fixed assets use for the purpose of calculating depreciation and subsequent accounting in the General Ledger module. It is a general practice to maintain the same calendar for both the GL and the FA.
Depreciation Methods
Oracle Assets supports almost any depreciation method. The depreciation methods that can be used are Flat rate, Table based, Calculated, Production based and Formula depreciation. Different depreciation methods can be used for different categories based on ABRL requirements.
Transfer of Assets Each asset can be assigned to a location and / or to an employee. Assets can be transferred between locations or from one employee to another. Running Depreciation
Depreciation can be run only at the book level and for a period at a time. Running depreciation for a period automatically closes the current period and opens the next period for transactions. Fixed Assets can have only one period open at any point in time.
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FA-E02 FA-E02 Maintain Fixed Maintain Assets Fixed Assets FA-P005 Maintain Assets FA-P006 Adjustment to Financial Information. FA-P007 Asset Retirement FA-P008 Asset Transfer
FA-P011 FA-P011 Period Close Period Close Process Process FA-P012 Create Journal Entries
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FA-P002
FA-E01
FA-P003
FA-E01
Manual Additions
FA-P004
FA-E01
FA-P005
FA-E02
Maintain Assets
FA-P006
FA-E02
FA-P007
FA-E02
An asset that is no longer in service will be retired. For example assets that are lost, damaged beyond repair, sold or returned will be retired by this process. This process describes the transfer of existing assets between employees, depreciation expense accounts and locations. After CIP assets are first captured in Oracle Assets, they are built up over a period of time. This process describes the maintenance of CIP assets. This includes adding, deleting or changing invoice lines to the existing CIP asset, transferring invoice lines between existing CIP assets, capitalizing CIP assets. Run the depreciation process to calculate depreciation amounts for all assets within a book for a period. After the depreciation process is run, Oracle Assets automatically closes the current period and opens the next period. Period Close process in Oracle Fixed Assets Oracle Assets creates journal entries for depreciation expense, asset cost and other accounts. These journal entries are automatically created and transferred to the Oracle General Ledger module.
FA-P008
FA-E02
Asset Transfer
FA-P009
FA-E02
FA-P010
FA-E03
Depreciate Assets
FA-P011 FA-P012
FA-E04 FA-E05
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Payables
Pay Invoice
Fixed Assets
Prepare and Post Prepare and Post Mass Additions Mass Additions
General Ledger
Post J ournals
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Supplier
Supplier Invoice
Purchasing
Purchase Order
Inventory
Payables
Fixed Assets
FA-P002
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
During this process, additional information such as mass addition source, descriptive, and depreciation information can be inputted into the Assets module. Once the user has verified that the mass addition is ready to become an asset, the user changes the mass addition queue to POST. Post Mass Additions function is then run and this mass addition line will become an asset. The Mass Additions post program defaults depreciation rules from the asset category, book, and date placed in service. The user if necessary can override this information manually.
Asset Categories
Oracle Assets uses the category Flex Field to group your assets by financial information. By standardizing category names, it is easier to track the assets. By defaulting financial and depreciation information from the asset book and asset category, the creation of assets can be speeded up as less information needs to be manually entered during asset creation. Further Asset Category Flex fields determines the account to which depreciation expense will get generated. Oracle Assets allows having a maximum Segments for Asset Category Flexfield. For ABRL the Category will be created as Major Category Minor Category I Minor Category - II number of 7
Asset Key
ABRL has a requirement to track assets by ---- (i.e. assets purchased in the particular financial year). In ABRL the Asset Category will have only one Segment as Asset Key This Flex field can be used to group assets without impacting the financial reports as required by ABRL.
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
Asset Locations
ABRL will track the locations of all assets. ABRL Will have a Asset Location Flex field structured on the pattern of Location Segments designed in the Accounting Flex field as follows. Location Segment Values.
Asset Number
ABRL will practice automatic numbering of assets.
Tagging
ABRL will tag its assets i.e. Tag labels containing the asset number and other necessary information will be attached onto the assets. These Tag Labels will facilitate users in identifying assets during stock taking exercises. Tag Numbers has to be manually entered by the person who is creating the asset.
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Yes
Merge several mass addition lines together, and create a single asset with this function.
Start mass additions posting program with this form, Submits concurrent request set. No
Use this function: - To enter additional information for a mass addition item and create an asset. - To merge multiple mass additions lines into a single asset. - To add mass addition to an existing asset as a cost adjustment. - To split a multi-unit mass addition.
A A
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
Using Quick Additions, only a limited number of fields are captured for each asset. Most of the information is also defaulted from the parameters assigned to the Asset Book and the Asset Category. For example, the depreciation methods are defaulted from the Asset Category. The Detail Addition function is used to enter complex assets that the Quick Addition process does not handle. This function allows more information to be captured about the asset. Default information can also be changed. The information includes:
Asset Description Asset Category Number of units making up the asset Details of asset sub-components Manufacturer and Model Serial number Property type and class (i.e. Owned/Leased and New/Used) Purchasing information (e.g. Supplier name, PO number, Invoice Number of Supplier) Current cost, Accumulated Depreciation etc Salvage value Date placed in service Indicate whether the asset will be depreciated (Oracle Assets can track items that do not need to be depreciated e.g. expensed items) Override and change the depreciation and prorate methods which were defaulted from the category.
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Complex Asset?
No
CIP Asset
Quick Asset
Assign invoice and Supplier references During set up. Quick Additions Use Quick Additions for ordinary assets to make use of Category default depreciation rules, Add an asset using Quick Additions to minimize Data entry.
Enter Assignments
Enter distribution Information, location, allocate units. Asset Type = Expensed? Yes Charge Asset To Expense account
Use Asset Category flexfield to tie the asset to its Corresponding asset account, asset clearing account, and Depreciation method & Life.
No Return
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
ABRL Proposes to capitalize all its CIP Assets as on the date on which a store is opened in a location Capitalize Assets in the Asset work bench facilitates the capitalization of assets based on the client need on a asset to asset basis.
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CIP Assets are only added to Corporate books, Initially a CIP asset has a zero cost. It is a shell for the cost that make up the asset. Subsequently, add invoice distribution lines to the New CIP asset to increase the cost.
Add Manually?
No
Additions
Yes
Quick Additions
Return
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
The process flows gives an overview of the various types of maintenance processes. Each type of process will be elaborated in greater detail in subsequent flows.
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FA-P005
Maintain Assets
No
Retire Assets?
No
Transfer assets?
No
Yes
Yes
Yes
Yes
FA P006 Adjustments
Return
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
If the asset is fully reserved, adjustments can be made to the same fields as for an asset for which depreciation has been run. If the asset is fully retired, none of the fields can be changed. The user can choose whether to amortize or expense the adjustment made and Oracle Assets passes the necessary journal entries for the same. Further these adjustments can be identified after the current open period is closed. Other Asset Information Other asset information that can be changed includes: Asset Description Asset Category Tag Number Sub-components Parent asset Number of units Other Asset details pertaining to manufacturer, warranty, model etc.
As and when ABRL will change the Category of Assets, the applicable depreciation rates for the category will automatically apply.
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FA-P006
Revalue Assets?
No
No
FA-P008
Yes
Yes
Reserve Adjustments
Mass Revaluation
Revalue all the assets in a category, or Individual assets, Enter the revaluation rates and rules.
Select the book to adjust and enter the adjustment factor, Preview the effects of the adjustment before performing it.
Return
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
For assets with sub-components, the user can also elect to automatically retire the subcomponents along with the parent asset. When performing a mass retirement, Oracle Assets automatically runs the Mass Retirements Report and the Mass Retirements Exception Report. The user can review these reports, perform a mass reinstatement, or adjust an individual retirement transaction if necessary. For individual retirements, the details of Proceeds of Sale and Cost of Removal (of the asset) can be entered into the system. When Mass Retirements is used, the total proceeds of sale and/or the total cost of removal amounts will be entered into the system. Oracle Assets then prorates the total amounts over the assets being retired according to each asset's current cost. ABRL has a requirement to capture the capital gain on Disposal of Assets.
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Fully
Process Retirements
Return 1.5
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
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No
yes Use the mass transfer function to transfer a group of assets between general ledger depreciation expense accounts, locations, or employees with a corporate book.
Assignments
Transfer units from a single asset between general ledger depreciation expense accounts, location, or employees within a corporate book.
Mass transfers
Return
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Change the cost of an invoice line or delete the invoice line from a CIP Asset.
Assignments
Transfer all or part of an invoice line between assets. Transfer lines between CIP and Capitalized assets.
Capitalize a CIP asset when it is ready to be placed into service and depreciated. Capitalize one or more assets in a single Transaction. Capitalize an asset in the period you added it, or in a later period.
Return
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
The Prorate date basis would be Daily for all the asset categories. Retirement Convention will be the same as prorate convention. Hence depreciation would be calculated from the date the asset is put in to service. Run Depreciation for the period. Depreciation can be run any number of times. However no activities can be done in Fixed Assets for the period once depreciation is run and period is closed. Navigation is The Following Accounting entries are generated in FA for Depreciation Accounting Event Depreciation Account Head Debit Credit 10 10
Depreciation A/C
For Income Tax purpose, Depreciation on asset is calculated on the Written down Value for the Block of Asset. 100% of depreciation is calculated if the asset is purchased between 1st April and 30th September and 50% of eligible depreciation if asset is purchased between 1st October and 31st March. For the above purposes date placed in Service is the date on which the assets are capitalized and the Depreciation Calculations are done accordingly. For calculating depreciation as per Income Tax Act, users need to manually run the program Income Tax Act Fixed Asset Schedule Please note that India-Income Tax Depreciation is only a report and no accounting entries are passed in the system. ABRL HO requires adjusting the cenvat recovery on Capital Goods at the applicable rates for the assets.
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Run Depreciation
Return
Depreciation
Close Period
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
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Oracle 12.0.5 Implementation Project FA_BP080_ABRL BP.080-Future Process Model- Fixed Assets 08 Sep 2008
Closed Issues
ID Issue Resolution Responsibility Target Date Impact Date
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