Governmental Accounting Standards Board (GASB) 34/35 Asset Accounting Solution: How-To Guide

Objectives and Functionality

GASB 34/35 Compliance in Action

The following is a how-to guide for implementing GASB 34/35-compliant functionality in your Oracle Financials Cloud instance:

Asset Clearing Accounts

• Assign the same asset clearing account to each corporate book.
• For multiple clearing accounts in a book or across books in the same ledger, set up the required mapping using the mapping set in sub-ledger accounting.
• For additional sub-ledger accounting setup, repeat the below setups. Note that this setup only covers standard invoices. If debit memos, credit memos, and prepayments require GASB accounting, repeat the steps below for each of these invoice types.

Expense Account to Clearing Accounting Mapping Set

• The invoice accounting for the secondary ledger displays journal lines to the expense account on the invoice instead of the asset clearing account if:
  • The mapping setup is not set up
  • There are unmapped values
• You can manually transfer incorrect amounts to the asset clearing account. This does not affect Create Mass Additions.

Create Mass Additions

• This program only transfers invoice lines with charge account type of expense or asset, and associated variances, freight, tax, and miscellaneous lines.
• Independent freight or miscellaneous invoice lines do not create assets.

Invoice Accounted Before Enabling this Feature

• The secondary ledger will not have the journal entries required for the asset clearing account. You can manually initialize the balances.
• You can create the invoices through the Create Mass Additions program above by backdating the dates.

Primary, Secondary, and Custom Ledgers/Sub-ledgers

• The primary ledger and corporate book contain the expensed assets, and the secondary ledger and tax book contain the depreciated assets. You must create custom sub-ledger accounting rules to map the asset expense accounts to the asset clearing account for the GASB secondary ledger.

Payables Sub-ledger Accounting:

• The journal entry you create for invoice accounting in the Standard Accrual sub-ledger accounting method creates a debit to the charge account on the invoice distribution. For the GASB secondary ledger, the expense account for the asset category is mapped to the asset clearing account.
  • Mapping Set: Create a mapping set in Payables to replace the invoice distribution expense account value with the asset clearing account value.
  • Account Rule: Create an account derivation rule that uses the above mapping set, and then assign this new rule to a journal entry rule set.
  • Journal Entry Rule Set: Copy the Invoice Accrual Basis journal entry rule set to create a custom journal entry rule set and for the Item Expense journal line rule, add the new account rule to the natural account segment in the segment rules.
  • Accounting Method: Copy the Standard sub-ledger accounting method to create a custom accounting method and add the new rule set to the custom accounting method by either deleting or end dating the current Invoices rule set.

General Ledger:

•  The primary ledger stores the expense journals for the assets, and the secondary ledger stores the GASB complaint journal entries. You must create a secondary ledger and assign the GASB accounting method.
  • Primary Ledger: The Primary ledger records the asset purchases as expenditures with the modified accrual accounting method.
  • Secondary Ledger: Create the secondary ledger that records the GASB compliant journal entries. It must have the same chart of accounts, currency, and calendar as the primary ledger. Specify the custom accounting method created above.
  • Primary to Secondary Ledger Mapping: Create a primary ledger to secondary ledger mapping. Set the data conversion level to Sub-ledger.

Fixed Assets:

• The corporate book does not depreciate the assets and does not transfer journal entries to the primary ledger. You do not need to depreciate these assets since they were fully expenses upon purchase. The associated tax book depreciates the assets and creates journal entries in the GASB secondary ledger.
  • Profile Option:
  • Enable “Enable GASB 34 Asset Additions for Assets” profile option:This profile option changes the behavior of the Create Mass Additions ess job set.
  • Corporate Book
    • Disable Allow Ledger Posting option: This will prevent the corporate book from sending any journal entries to the primary ledger.
    • Disable Depreciation option: This will prevent calculating the depreciation in the corporate book
  • Tax Book: Create a tax book associated with the corporate book to depreciate and create journals for the GASB secondary ledger.
    • Enable Allow Ledger Posting option: This will enable the tax book sending journal entries to the secondary ledger.
    • Enable Depreciation option: This will enable calculating the depreciation in the tax book.

Invoice Accounting:

• Create an invoice with the expense account. Two sets of journal entries are created.
  • Primary Ledger Journal: Debit the expense account.
  • GASB Secondary Ledger: Debit the asset clearing account.

Create Mass Additions

• Submit the Create Mass Additions Job Set from scheduled processes to transfer asset invoice line distributions from Payables to Assets, this job set consists of the following three ess jobs.
  • Update Asset Tracking: The Update Asset Tracking Flag job definition updates the Track as an asset option on distribution lines for the specified accounting date ranges and accounts.
  • Create Mass Additions: This job definition creates source lines in the corporate book for the invoices with the Track as Asset option enabled.
  • Update Asset Type: The Update Asset Type job definition changes the asset type from expensed to capitalized or CIP for the specified ledger, corporate book, and invoice accounts specified.

Asset Additions

• Use prepare Source Lines page to modify or add asset attributes for the asset created from the invoices selected for the corporate book.
• Use Post Mass Additions page to post mass additions to the corporate book.
• Copy Assets from corporate book to tax book.

Asset Accounting

• Copy Assets from corporate book to tax book
• Calculate depreciation on the assets in the tax book
• Create sub-ledger journal entries for the tax book
• Transfer the journals to the GASB secondary ledger
• Inquire Assets to view the tax book and depreciation accounting

 

 
Inspirage understands these challenges and will help your business achieve GASB 34/35 compliance using Oracle Financials Cloud. If you are unsure about moving to Oracle Cloud due to gaps between your business requirements and Oracle’s Cloud offering, it’s possible that we have already built a solution to bridge that gap. If not, we can customize something to fit. We will do the work behind the scenes, so you can focus on growing your business.

Please visit the Oracle Cloud Marketplace to see a complete listing of Inspirage Solutions.

As the Integrated Supply Chain Specialists, with recognition from Gartner, IDC, and winners of Oracle’s ERPM (Enterprise Resource Planning & Management) & Supply Chain Management Cloud Partner of the Year (Global) awards in recent years, Inspirage is uniquely qualified to be your success partner. Whether you are upgrading your on-prem system or have decided to move to the cloud where continuous improvement is built-in, our team is prepared to guide you on your transformational journey. Contact us to learn more.