Expense Amortization in Oracle

You have a big expense which can be amortized to multiple periods against your local accounting principle, e.g. building fixture, etc.

1. Create a FA(fixed asset) category in your FA book.  This category is similar with real fixed asset category but with 0 salvage value. Depreciation expense is the amortization expense in this case and the life year is your amortization periods.

2. Create AP invoice with the full figure of your fixture fee. The distribution line is in the account of FA clearing. So the accounting entry is

Dr. FA clearing
Cr. Liability

3. Make FA addition in FA module with the category for expense amortization (or by mass addition from AP).

Dr. Asset Cost (Expense Asset)
Cr. FA clearing

4. Run depreciation every period to amortize the expense.

Dr. Amortization Expense
Cr. Asset Cost (Expense Asset)

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