Oracle Fixed Assets
Fixed assets, constitute the durable capital base of an enterprise (traditionally the “Property, Plant and Equipment”), necessary to deliver products and services expanded to include investments in non-tangible
assets like software.
Asset management encompasses three primary activities:
Physical Upkeep: Comprises asset location, asset condition and assignment
Asset Tracking: Covers the whole gamut from controlling, leased, loaned and consigned items from acquisition to asset maintenance.
Financial Administration: Involves asset value, depreciation and taxation.
Two Types of Asset Books:
Corporate Books: Where are all assets are created or captured, accounted, Depreciated and retired as per the GAAP rules.
Tax Books: Tax books use the asset data of the corporate book but account, Depreciate and retire as per the tax rules.
Capital Assets such as building and machinery typically lose their value over time.
The loss of value during any given period is called depreciation and it is charged as an expense in that period. The value of asset at any point in time –usually cost minus accumulated depreciation–is called net book value.
When an asset is acquired / built, asset is assigned an initial book value, an economic life and a calculation to determine value of asset at each period during that economic life. An asset may have a residual value beyond which it will not depreciate.
At the end of its economic life, the initial cost of asset (less residual value if any), will have been expensed. The depreciated book value appears on balance sheet as an asset. The asset is taken off books when it is sold. The diff between sale price and book value at the time of the sale is gain/loss on sale.
Fixed Asset Process flow