Difference Between Asset Lifecycle management (ALM) and Fixed Assets (FA) In Oracle Fusion Financials

ALM is Part of FA Module with in the Financials Suite of Offerings and They Both have Distinct but complementary Purposes with in an Organization .In This post Lets Have a Breakdown of How they Differ.

1. Purpose and Scope :

   1. Asset Life Cycle management(ALM) :

      1. Scope : ALM is Broader and focusses on Managing entire Lifecycle of Physical Assets from Acquisition , Deployment to Maintenance and Eventual Disposal.

      2. Purpose : it is Designed for Organizations that Deal with Physical Assets like Machinery Equipment , IT Hardware and Facilities . ALM Includes Aspects like maintenance Scheduling , asset Performance Monitoring , repair management and Inventory Tracking.

      3. Business Focus : ALM is Typically used by Operational Departments like facilities management , Manufacturing , IT to Ensure that Physical Assets are operating efficiently and within Their Expected Lifecycle.

   2. Fixed Assets (FA) :

      1. Capitalization: Manages the Addition of Assets to the Balance sheets and Assigns an Asset category (Eg . Building , Machinery etc)

      2. Depreciation: Automates Deprecation Calculation and Tracks Different Methods (Straight line and Declining Balancing Etc ..) Based on Asset category and Lifespan.

      3. Revaluation : Handles Revaluation of assets for Financial Reporting and Tax Purposes.

      4. Asset Retirement : Manages the Financial Disposal of the Assets and Any related Gains or Losses.

      5. Tax and regulatory Compliance : Ensures Assets are Deprecated according to local Tax laws and Accounting Standards.

      6. Audit and Reporting : Provides detailed financial reports for auditing purposes and Compliance with Standards like IFRS , GAAP

   3. Integration with Other Modules/Systems:

      1. ALM:

         1. often Integrates with Systems like maintenance Cloud , Inventory Management and Procurement cloud to manage the Full Operational lifecycle of Assets.

         2. It Also Integrates with Project Management for Capital Project Tracking and Cost Associated with Assets.

      2. Fixed Assets :

         1. Primarily integrates with GL and AP to Ensure that Capitalized Assets are Accounted for Correctly and that Deprecation is Reflected in Financial Statements.

         2. May Integrate with Procurement cloud and project Costing to bring assets into the financial system after purchase or construction

   4. Examples of Use Cases:

      • Asset Lifecycle Management (ALM):

        • A company with heavy machinery uses ALM to track the health of each machine, schedule preventive maintenance, monitor performance, and handle repairs over time.

        • IT departments use ALM to manage hardware assets, including upgrades and decommissioning of equipment like servers and laptops.

      • Fixed Assets (FA):

        • The finance team capitalizes these same assets (e.g., machines, servers) in the Fixed Assets module, tracking their depreciation over a predefined useful life for financial reporting purposes.

        • When an asset is sold or scrapped, the financial impact (gains or losses) is managed within the FA module

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          In Conclusion ,Both modules are essential, but they serve different organizational needs—ALM for managing the physical performance and FA for managing the financial lifecycle of assets.

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      • In My Experience most companies Does not use the Oracle's ALM Instead they go with ServiceNow's IT Asset Management (ITAM) suite provides ALM functionality,

        
        

Hope this Helps . Happy Learning and lets Grow Together :)