R12: How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?

Using of Subledger Accounting Setup

By Mohammed Ahmad,
https://community.oracle.com/docs/DOC-909668
A Reference for Document How to Control Assets Purchases through
Funds Check across Cost Centers?

https://community.oracle.com/docs/DOC-909669

Disclaimer:
This document is intended solely for information purposes and should be considered as a tool for
sharing information or knowledge related to documents subject of matter. The document is written
based upon the experience that the author encountered, and, as a result, it is not necessary suitable
to readers business processes and requirements. Readers should not interpret or use information in
this document as a solutions or recommendations and IT SHOULD NOT BE RELIED UPON IN
MAKING NEW SETUP OR CHANGES ON PRODUCTION INSTANCE(S).
Abstract:
Using the Subledger Accounting (SLA), this document elaborates, in details, on how to change the
derivation rule of assets cost clearing account combination for assets added from mass additions
open interface.
Before explaining how and what to change, we should recall the standard functionality of Oracle
Assets in generating Asset Cost Clearing Accounts:
For manual additions, Oracle Assets gets the clearing account from the category. For mass
additions, the cost clearing account combination comes from source system (after certain
criteria are met; please refer to Oracle Assets User Guide for more details).
Accordingly, the asset cost clearing account combination (the focus here is on Cost Center segment
value) used in Payables invoice or the PO charge account used in PO-matched invoice is what will be
generated during mass addition run. Indeed, this standard functionality is sound and consistent since
what was debited as clearing cost account at time of receiving/invoicing (along with cost center and
other segments values) is what should be credited it time of adding asset so that bringing that account
combination balance to zero. However, exceptions happen and business requirements may demand
different methods.
What we are seeking here is to let Oracle Assets gets asset cost clearing account combination from
related Asset Category and discards the combination imported from feeder system; for example if the
asset clearing account combination debited in Payables invoice was 10-12-100-40 (where segments
are respectively as follows: Balancing Segment, Natural Account, and Cost Center) while asset cost
clearing assigned to related Asset Category was 10-12-100-00, then, at time of adding (posting)
assets from mass additions interface, the account combination of 10-12-100-00 is the one we looking
to be credited. In few words, our final goal is to discard segments values other than Balancing
Segment and Natural Account at time of adding imported assets.

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad

Document Purpose:
Why this change?
The ultimate goal is to subject asset clearing account to funds check in Oracle Purchasing and
Payables applications. In fact, there is no room in this document for explaining the details of how this
change would enable controlling assets (capital) purchases through funds check across cost centers.
For this reason, another document with title of How to Control Assets Purchases through
Budgets Across Companys Cost Centers? was uploaded to Oracle Community while using the
current document as reference for its SLA setup part. Accordingly, to gain the complete picture both
documents should be reviewed.
Assumption(s)
The key assumption of this document is that the current used Subledger Accounting Method is the
Oracle seeded Encumbrance Accrual.

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad

Setup Steps
(a) Create New User-Derivation Rule
Setup -> Financials -> Subledger Accounting -> Transaction Accounting Builder Setup ->
Account Derivation Rules
Click New button and enter Rule Code and Name: As shown in the below print screen, the
code USER ASSET CLEARING RULE and Name User Rule - Asset Cost Clearing
Account were used.
In Priorities line, set Value Type to Source and use Oracle seeded value of Asset
Clearing Account Code Combination Identifier.

The following dummy condition can be used:

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad

(b) Create New Journal Line Type

Setup -> Financials -> Subledger Accounting -> Accounting Methods Builder -> Journal Entry
Setup -> Journal Line Types
Search for FA_ADD_COST_CLEARING in Line Type Code field, click Copy button and enter
new Code and Name fields and then click Done button

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad

(c) Create New Journal Line Definition

Setup -> Financials -> Subledger Accounting -> Accounting Methods Builder -> Method and
Definitions -> Journal Lines Definitions
Search for FA_STANDARD_ACCOUNTING_ADDITI1 in Definition Code field, click Copy
button and enter new Code and Name fields and then click Done button

(d) Amend Journal Lines Definition

Now, in the copied Journal Lines definition, do the following (steps are highlighted on next
supporting print screen):
1. Delete the Line Assignment of Addition Cost Clearing; that is the one Owned by
Oracle
2. Enter new Line Assignment: the newly created Journal Line Type User Addition
Cost Clearing created in step (b).
3. Under Account Derivation Rules related to the new journal line, do the following:
Enter User Rule - Asset Cost Clearing Account created in step (a) for All
Segments
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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad

Use Oracle seeded derivation rule of Assets Expense Account Segment

for Balancing Segment
Use Oracle seeded derivation rule of Assets Category Cost Clearing
Account Segment for Natural Account.

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad

(e) Create New Application Accounting Definition

Setup -> Financials -> Subledger Accounting -> Accounting Methods Builder -> Method and
Definitions -> Application Accounting Definitions
Search for FA_STANDARD_ACCOUNTING in Definition Code field, click Copy button and
enter new Code and Name fields and then click Done button.

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad

(f) Amend Application Accounting Definition

In the new copied Application Accounting definition, created in step (e) do the following setup
for Addition Event Class:
1- Delete Assets Standard Accounting-All1
Accounting All1 journal line definition assignment
2- Add newly created User journal line definition assignment;
assignment; created in step (c)
3- Click Validate button

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets
Assets?
Using of Subledger Accounting Setup

(g) Create New Subledger Accounting Methods

Setup -> Financials -> Subledger Accounting -> Accounting Methods Builder -> Method and
Definitions -> Subledger Accounting Methods
Search for ENCUMBRANCE_ACCRUAL in Method Code field, copy and enter new Code
and Name fields.
.

Note: Oracle Seeded Subledger Accounting Methods allows update; however, a user owned
method was created to preserve Oracle owned method from updates.

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad

(h) Amend Subledger Accounting Method

This step is just about deleting Oracle owned Assets application accounting definition from the copied
Subledger Accounting Method and adding the one created in steps (e) and (f).

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad

(i) Assign New Subledger Accounting Method to GL Ledger

By this we have a new Subledger Accounting Method which can be attached to ledger. To do
so:
1- Navigate to accounting setup (Setup -> Financials -> General Ledger ->
Accounting Setup Manager -> Accounting Setup),
2- Find your ledger,
3- Click on Update Accounting Options,
4- Scroll down to Primary Ledger region and Click on Update,
5- Attach the User defined Subledger Accounting Method
USER_ENCUMBRANCE_ACCRUAL to Subledger Accounting Method option.
6- Click Finish

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad

Testing:
Following tests were applied to check that the forgoing setup was not negatively impact the key
processes and transactions related to Oracle Assets in terms of completeness and accounting:
123456789-

Mass Addition Create Program in Oracle Payables

Mass Addition Prepare and Post
Cost Adjustments to added assets
Assets Reclassification
Asset Partial and Full Retirement
Manual Assets Addition
Depreciation Run
Create Accounting and transfer to GL
Asset Periods Closing

All tests results were positive except for displayed Clearing Account combination in prepare mass
addition form. As shown in below print screen, the account is displayed from source system; however,
the SLA accounting derives the desired account combination by returning related asset categorys
account combination.

--- End

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How to Change Assets Cost Clearing Account Derivation Rule in Fixed Assets?
Using of Subledger Accounting Setup
By Mohammed Ahmad