Journal Entries for Transfers and Reclassifications (Oracle Assets)

Journal Entries for Transfers and Reclassifications

Example: You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000, the life is 4 years, and you are using straight-line depreciation.

This section illustrates the following journal entry examples:

Current Period Transfer Between Cost Centers

In Year 2, Quarter 2, you transfer the asset from cost center 100 to cost center 200 in the current period.

Cost Center 100

Account Description	Debit	Credit
Accumulated Depreciation	1,250.00
Asset Cost		4,000.00

Cost Center 200

Account Description	Debit	Credit
Asset Cost	4,000.00
Depreciation Expense	250.00
Accumulated Depreciation		1,500.00

Prior Period Transfer Between Cost Centers

In Year 3, Quarter 4, you discover that an asset was transferred in Year 3, Quarter 3, from cost center 100 to cost center 200.

Cost Center 100

Period (Yr.,Qtr.)	Asset Cost	Accumulated Depreciation	Yr-to-Date Depreciation	Depreciation Expense
Y3,Q1	4,000.00	2,250.00	250.00	250.00
Y3,Q2	4,000.00	2,500.00	500.00	250.00
Y3,Q3	4,000.00	2,750.00	750.00	250.00
Y3,Q4	0.00	0.00	500.00	-250.00*

Cost Center 200

Period (Yr.,Qtr.)	Asset Cost	Accumulated Depreciation	Yr-to-Date Depreciation	Depreciation Expense
Y3,Q1	0.00	0.00	0.00	0.00
Y3,Q2	0.00	0.00	0.00	0.00
Y3,Q3	0.00	0.00	0.00	0.00
Y3,Q4	4,000.00	3,000.00	500.00	500.00*

Cost Center 100

Account Description	Debit	Credit
Accumulated Depreciation	2,750.00
Asset Cost		4,000.00
Depreciation Expense (adjustment)		250.00

Cost Center 200

Account Description	Debit	Credit
Asset Cost	4,000.00
Depreciation Expense	250.00
Depreciation Expense (adjustment)	250.00
Accumulated Depreciation		3,000.00

Current Period Transfer Between Balancing Segments

In Year 3, Quarter 4, you transfer the asset from the ABC Manufacturing Company to the XYZ Distribution Company.

ABC Manufacturing

Account Description	Debit	Credit
Accumulated Depreciation	2,750.00
Intercompany Receivables	1,250.00
Asset Cost		4,000.00

XYZ Distribution

Account Description	Debit	Credit
Asset Cost	4,000.00
Depreciation Expense	250.00
Accumulated Depreciation		3,000.00
Intercompany Payables		1,250.00

Prior Period Transfer Between Balancing Segments

In Year 3, Quarter 4, you discover that the asset was transferred in Year 3, Quarter 3, from the ABC Manufacturing Company to the XYZ Distribution Company.

ABC Manufacturing

Period (Yr.,Qtr.)	Asset Cost	Accumulated Depreciation	Yr-to-Date Depreciation	Depreciation Expense
Y3,Q1	4,000.00	2,250.00	250.00	250.00
Y3,Q2	4,000.00	2,500.00	500.00	250.00
Y3,Q3	4,000.00	2,750.00	750.00	250.00
Y3,Q4	0.00	0.00	500.00	-250.00*

XYZ Distribution

Period (Yr.,Qtr.)	Asset Cost	Accumulated Depreciation	Yr-to-Date Depreciation	Depreciation Expense
Y3,Q1	0.00	0.00	0.00	0.00
Y3,Q2	0.00	0.00	0.00	0.00
Y3,Q3	0.00	0.00	0.00	0.00
Y3,Q4	4,000.00	3,000.00	500.00	500.00*

ABC Manufacturing

Account Description	Debit	Credit
Accumulated Depreciation	2,750.00
Intercompany Receivables	1,500.00
Asset Cost		4,000.00
Depreciation Expense (adjustment)		250.00

XYZ Distribution

Account Description	Debit	Credit
Asset Cost	4,000.00
Depreciation Expense	250.00
Depreciation Expense (adjustment)	250.00
Accumulated Depreciation		3,000.00
Intercompany Payables		1,500.00

Unit Adjustment

A unit adjustment is similar to a transfer, since you must update assignment information when you change the number of units for an asset. For example, you place the same $4,000 asset in service with two units assigned to cost center 100. In Year 2, Quarter 3, you realize the asset actually has four units, two of which belong to cost center 200.

Cost Center 100

Account Description	Debit	Credit
Accumulated Depreciation	750.00
Asset Cost		2,000.00

Cost Center 200

Account Description	Debit	Credit
Asset Cost	2,000.00
Accumulated Depreciation		750.00

Note: If all units remain in the original cost center, Oracle Assets creates journal entries with zero amounts.

Reclassification

Example: You reclassify an asset from office equipment to computers in Year 1, Quarter 3. The asset cost is $4,000, the life is 4 years, and you are using straight-line depreciation.

When you reclassify an asset in a period after the period you entered it, Oracle Assets creates journal entries to transfer the cost and accumulated depreciation to the asset and accumulated depreciation accounts of the new asset category. This occurs when you create journal entries for your general ledger. Oracle Assets also changes the depreciation expense account to the default depreciation expense account for the new category, but does not adjust for prior period expense.

Office Equipment

Period (Yr., Qtr.)	Asset Cost	Accumulated Depreciation	Yr-to-Date Depreciation	Depreciation Expense
Yr1,Q1	4,000.00	250.00	250.00	250.00
Yr1,Q2	4,000.00	500.00	500.00	250.00
Yr1,Q3	0.00	0.00	500.00	0.00*
Yr1,Q4	0.00	0.00	500.00	0.00

Computers

Period (Yr.,Qtr.)	Asset Cost	Accumulated Depreciation	Yr-to-Date Depreciation	Depreciation Expense
Yr1,Q1	0.00	0.00	0.00	0.00
Yr1,Q2	0.00	0.00	0.00	0.00
Yr1,Q3	4,000.00	750.00	250.00	250.00*
Yr1,Q4	4,000.00	1,000.00	500.00	250.00

Office Equipment

Account Description	Debit	Credit
Accumulated Depreciation	500.00
Asset Cost		4,000.00

Computers

Account Description	Debit	Credit
Asset Cost	4,000.00
Depreciation Expense	250.00
Accumulated Depreciation		750.00

Note: The new Depreciation Expense account will only inherit the natural account from the new category. The other segment values will remain the same.