The
Oracle E-Business Suite is a complete set of business applications that enables
corporations to efficiently track detailed business transaction data and turn
it into decision making information using a system built on a unified
information architecture.
Oracle Financials applications
are a subset of this suite and are a family of products designed to capture and
analyze your financial data on a worldwide basis. Use Oracle Financials
applications to better manage business to the targets that are announced to
investors. Management can better report to investors and colleagues. Oracle
Financials applications also help you to meet your obligations in key areas
surrounding the numbers, such as:
·
Compliance
·
Financial Control
·
Regulatory Reporting
·
Cost Containment
·
Risk Management
The Oracle Financials Concepts
Guide introduces you to the fundamental concepts involved in setting up and
using Oracle Financials applications.
R12
Oracle E-Business Suite Financials applications automate and streamline all
your financial business processes for enterprise wide daily business
intelligence that lets you make more informed decisions, improve operations,
and reduce costs. A unified data model provides a single accurate view of all
your financial information, including a 360-degree view of your customers.
Oracle Financials, running on Oracle technology, gives you industry-leading
performance and scalability. Once you learn the essentials of Oracle R12
E-Business Suite, you can develop advanced knowledge in any of the following focus
areas:
- Fixed Asset Management
- General Ledger Management
- Accounts Receivable
- Accounts Payable
- Cash Management
These
are also considered as the basic for setting up Financial Module
Further
let us know what are the features and importance of the above mentioned modules.
Fixed Assets Management
Fixed assets are items of value, such as buildings, vehicles,
land, and equipment, which are owned by an individual or organization.
You can set up and enter
acquisition information for fixed assets, and then manage them by depreciating
them and setting a capitalization threshold to determine depreciation. You can
calculate adjustments to the fixed assets, and also dispose of them. When you
use General ledger together with fixed assets, you can view the current value
of all fixed assets. The way in which fixed assets are handled must correspond
to both international accounting standards and the accounting legislation in
each country/region. Requirements might include rules for recording acquisition
and disposal transactions, depreciation, lifetimes, and write-ups and
write-downs of fixed assets. The Fixed assets functionality incorporates many
of these standards and rules.
Fixed asset groups let you group your assets and specify default
attributes for every asset that is assigned to a group. Books are assigned to
fixed asset groups. Books track the financial value of a fixed asset over time
by using the depreciation configuration that is defined in the depreciation
profile.
Fixed assets are assigned to a group when they are created. By
default, the books that are assigned to the fixed asset group are then assigned
to the fixed asset. Books that are configured to post to the general ledger are
associated with a posting profile. Ledger accounts are defined for each book in
the posting profile and are used when fixed asset transactions are posted.
Fixed
assets can be integrated with General ledger, Inventory management, Accounts
receivable, and Accounts payable. You can also set up Fixed assets so that it
is integrated with purchase orders.
General ledger
In
General ledger, the value of all fixed assets is typically summarized in
multiple main accounts that are required for financial reporting. However, on
the Fixed assets page, you can create many fixed asset records. These
records can include information such as the acquisition price, depreciation,
and valuation. Each time that you post a transaction for a fixed asset, the
appropriate main accounts are updated. The main accounts for fixed assets
always show the updated value of the fixed assets.
On
the Fixed asset posting profiles page, you define the main accounts
that fixed asset book transactions are posted to. You also specify the types of
fixed asset transactions that are posted to each main account. You can create
various combinations of main accounts for fixed assets, depending on the level
of detail that you want for fixed assets in the general ledger. Main accounts
can be based on transaction types, books, and other main accounts.
Inventory management
In
the inventory journal for fixed assets, you can enter the acquisition of fixed
assets that the legal entity has produced or constructed for itself. You can
then transfer inventory items to fixed assets either as an acquisition or as
part of an acquisition.
When
an inventory item becomes a fixed asset acquisition through the inventory
journal, a purchase order, or an acquisition proposal, a fixed asset book
acquisition transaction is created. If a book acquisition includes a derived
book, the derived book acquisition transaction is also created.
Posting
rules that are set up on the Posting page in Inventory management
control the decrease in inventory when an acquisition is posted. However, you
don’t always decrease inventory when you post invoices that are related to
fixed assets. In some cases, the fixed assets might be purchased for internal
use. An example is a laptop that is purchased for the sales department. When
you work with purchase orders, you can use items that are set up for both
resale and internal use.
If
you use specific receipt and issue accounts on item groups for fixed assets,
you can use the same inventory item both for internal purchases and as stock
for resale.
Fixed
assets that are for internal use, are set up so that they have an account type
of Fixed asset receipt. This account type is used to track the receipt of
the fixed asset. When you post a vendor invoice, use the fixed asset receipt
account if any of the following conditions is true:
The
invoice line contains an existing fixed asset for internal purposes.
The New
fixed asset? Check box is selected for the product receipt line that is
posted.
The Create
a new fixed asset check box is selected for the vendor invoice line.
Typically,
this account is an expense account. You can set up the Fixed asset receipt account
type for either an item group or an individual item by using the Purchase
order tab on the Item group or Posting page.
Similarly,
fixed assets that are for internal use can be set up so that they have an
account type of Fixed asset issue. This account type is used to track the
issuing of the fixed asset to the recipient. When an asset is acquired by using
a purchase order, the fixed asset issue account offsets the fixed asset debit
account. The asset acquisition can be posted either when you post a vendor
invoice or when you post the asset acquisition in the Fixed assets journal,
possibly by using an acquisition proposal. You can set up the Fixed asset
issue account type for either an item group or an individual item by using
the Inventory tab on the Item group or Item posting page.
Ultimately,
the main accounts that are used for posting are determined by the options for
ledger integration that are specified for the item model group. Additionally,
the main accounts that are used vary, depending on whether an asset is assigned
to the purchase order line. The accounts are derived from the posting profile
for each item group. Note: If an inventory reservation exists when
product receipts are posted, you can’t assign a fixed asset or create a fixed
asset from the line.
The
accounts that fixed asset transactions are posted to depend on two factors:
whether the assets are purchased or constructed by the legal entity, and the
transaction type of the asset.
The
transaction type connects the inventory transaction to the posting profile in
Fixed assets. Because the posting profile in Fixed assets defines which
accounts are updated, the selection of a transaction type for a fixed asset is
also, indirectly, the selection of the main accounts that the transaction is
posted to. For both constructed and purchased fixed assets, the transaction
type is typically Acquisition or Acquisition adjustment.
Accounts Receivable
The
integration of Fixed assets with Accounts receivable uses posting profiles that
are set up in Fixed assets. These posting profiles are activated when a fixed
asset, book, and fixed asset transaction type are selected for a customer
invoice before the customer invoice is posted. Because fixed assets aren’t part
of Inventory management, you must use the Free text invoice page when
you sell a fixed asset.
If
the book includes a derived book, the derived book transaction is created when
you post the customer invoice.
Accounts payable
Accounts
Payable can be used for mass addition of Fixed assets. Typically, fixed assets
are acquired from external vendors. You can use the Fixed assets
parameters page to specify whether asset acquisitions are always posted when
you post vendor invoices, or whether asset acquisitions can be posted only from
Fixed assets. If you enable asset acquisitions to be posted from Accounts
payable, fixed asset accounts are updated whenever a vendor invoice for a fixed
asset acquisition is posted.
If
the system is set up to post an asset acquisition when an invoice is posted,
the transaction is posted according to the posting profiles that are set up in
Fixed assets for the various fixed asset transaction types. The posting is
controlled by the fixed asset, book, and fixed asset transaction type that are
selected on the Purchase order page before the vendor invoice is
posted.
If
the book includes a derived book, the derived book transaction is created when
you post the vendor invoice.
The
integration for each order line is activated on the Fixed assets tab
on the Line details FastTab on the Purchase order page. You
can send a purchase order for a fixed asset to the vendor. However, the fixed
assets and main accounts are updated only when you post the vendor invoice
after the fixed asset is received. Because purchase orders can contain only
inventory items, the effect that the acquisition of fixed assets has on
inventory depends on the setup of the legal entity.
