[OAUGNet]-Re: Capital items in Inventory

["Himanshu Jain" <jainhi@hotmail.com>]

Chetan,

Thanks for the reply, Who should be driving this process? To me it looks
like that this needs to be driven by Fixed assets and financial person. Is
this assumption correct?

Couple of questions though:
1) During the time item is in inventory, does it show as an Asset on my
Inventory valuation.
2) Are these items typically named differently till they are treated as
capitol items? My question is How would an inventory personal know that this
item is a capitol item ? Are there some other logical separations done?

Thanks for your inputs.......
Himanshu

----- Original Message -----
From: "Chetan Banglorewala" <Chetan.Banglorewala@gulfairco.com>
To: "OAUG Net listserver" <OAUGNet@oaug.com>
Sent: Wednesday, October 13, 2004 3:28 AM
Subject: [OAUGNet]-Re: Capital items in Inventory


Possible Solution

a) Treat it as a normal stock item until it is to be put in service

b) When item is put in service, issue it from stores.

CASE 1 - Charge it to ASSET CLEARING ACCOUNT and manually add the asset in
FA.

Case 2 - Charge it to a CLEARING ACCOUNT

In this case, you need to enter a dummy invoice debiting Asset Clearing
account. Then, also enter a dummy credit memo, crediting the CLEARING
ACCOUNT used above. Make a zero payment for the invoice and CM.

c) Upon completion of usable life retire the asset and put the Sales value
equal to NBV of the asset.

d) To bring the item back into Inventory, enter Miscellaneous Transaction
equal to the NBV and charge it to the Sale Proceeds account.

Hope the above is helpful.

Regards,
Chetan Banglorewala
Gulf Air - Bahrain
Tel : +973 17338523,
Cell : +973 39549990




-----Original Message-----
From: OAUG Net listserver [mailto:OAUGNet@oaug.com]On Behalf Of Himanshu
Jain
Sent: Wednesday, October 13, 2004 6:04 AM
To: OAUG Net listserver
Subject: [OAUGNet]-Re: Capitol items in Inventory



> We are implmenting oracle financials, Manufacturing primarily to support a
> transit company processes. I am looking for some good ways to handle
capitol
> items that are stored and stocked in inventory till they are put in
service
> and there depreciation starts when they are put in service upto 3 to 5
> years. After that they are treated like normal inventory items.
>
> I am looking for inputs on similar processes, Has anyone ever dealt with
> this scenario, what is the best practice to deal with this
>
> Thanks
Himanshu

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