This section includes addition and capitalization journal entry examples for the following transactions:
Current and Prior Period Addition
Construction-in-Process (CIP) Addition
For manual additions, Oracle Assets gets the clearing account from the category. For mass additions, the clearing account comes from your source system.
Example: The recoverable cost is $4,000 and the method is straight-line 4 years.
You purchase and place the asset into service in Year 1, Quarter 1.
Payables System
| Account Description | Debit | Credit |
|---|---|---|
| Asset Clearing | 4,000.00 | |
| Accounts Payable Liability | 4,000.00 |
Oracle Assets - CURRENT PERIOD ADDITION
| Account Description | Debit | Credit |
|---|---|---|
| Asset Cost | 4,000.00 | |
| Depreciation Expense | 250.00 | |
| Asset Clearing | 4,000.00 | |
| Accumulated Depreciaiton | 250.00 |
You place an asset in service in Year 1, Quarter 1, but you do not enter it into Oracle Assets until Year 2, Quarter 2. Your payables system creates the same journal entries to asset clearing and accounts payable liability as for a current period addition.
Oracle Assets - PRIOR PERIOD ADDITION
| Account Description | Debit | Credit |
|---|---|---|
| Asset Cost | 4,000.00 | |
| Depreciation Expense | 250.00 | |
| Depreciation Expense (Adjustment) | 1,250.00 | |
| Asset Clearing | 4,000.00 | |
| Accumulated Depreciaiton | 1,500.00 |
When you merge two mass additions, Oracle Assets adds the asset cost of the mass addition that you are merging to the asset account of the mass addition you are merging into. Oracle Assets records the merge when you perform the transaction. Oracle Assets does not change the asset clearing account journal entries it creates for each line, so each of the appropriate clearing accounts clears separately.
As an audit trail after the merge, the original cost of the invoice line remains on each line. When you create an asset from the merged line, the asset cost is the total merged cost.
Oracle Assets creates journal entries for the asset cost account for the mass addition into which the others were merged. Oracle Assets creates journal entries for each asset clearing account. For example, you merge mass addition #1 into mass addition #2, so Oracle Assets creates the following journal entries:
| Account Description | Debit | Credit |
|---|---|---|
| Asset Cost (mass addition #2 asset cost account) | 4,000.00 | |
| Depreciation Expense | 1,500.00 | |
| Asset Clearing (mass addition #1 accounts payable clearing account) | 3,000.00 | |
| Asset Clearing (mass addition #2 accounts payable clearing account) | 1,000.00 | |
| Accumulated Depreciaiton | 1,500.00 |
You add a CIP asset. (CIP assets do not depreciate)
Oracle Assets
| Account Description | Debit | Credit |
|---|---|---|
| CIP Cost | 4,000.00 | |
| CIP Clearing | 4,000.00 |
Oracle Assets creates no journal entries for deleted mass additions and does not clear the asset clearing accounts credited by accounts payable. You clear the accounts by either reversing the invoice in your payables system, or creating manual journal entries in your general ledger.
When you capitalize CIP assets, Oracle Assets creates journal entries that transfer the cost from the CIP cost account to the asset cost account. The clearing account has already been cleared.
| Account Description | Debit | Credit |
|---|---|---|
| Asset Cost | 4,000.00 | |
| Depreciation Expense | 250.00 | |
| CIP Cost | 4,000.00 | |
| Accumulated Depreciation | 250.00 |
If you change the asset type from capitalized to CIP, Oracle Assets creates journal entries to debit the CIP cost account and credit the asset clearing account. Oracle Assets does not create capitalization or reverse capitalization journal entries for CIP reverse transactions.
Oracle Assets - CHANGE TYPE FROM CAPITALIZED TO CIP (CURRENT PERIOD)
| Account Description | Debit | Credit |
|---|---|---|
| CIP Cost | 4,000.00 | |
| Asset Cost | 4,000.00 |