Professional Documents
Culture Documents
Objectives
After completing this module, you should be able to do
the following:
Discuss the process flow that Oracle Assets uses to
calculate depreciation
Identify the key setup requirements required for the
calculation of asset depreciation
Discuss the role that depreciation methods and
conventions play in the calculation of asset
depreciation
Discuss the running of asset depreciation
Explain the use of projecting depreciation expense
Describe the forecasting depreciation analysis
feature
Copyright 2007, Oracle. All rights reserved.
Agenda
Depreciation Setup
Depreciation Methods
Prorate Conventions
Running Depreciation
Depreciation Projections
Forecasting Depreciation
Depreciation Override
Elements of Depreciation
Prorate
Convention
Asset Books
Prorate
Calendar
Depreciation
Method
Depreciation
Calendar
Depreciation
Ceilings
Depreciation
Investment
Tax Credits
Price
Indexes
Units of
Measure
Optional
Elements
Calendars
Depreciation
(N) Setup > Depreciation > Methods
Methods
Prorate
(N) Setup > Asset System > Prorate
Convention
Conventions
(N) Setup > Financials > Units of Measure
(N) Setup > Depreciation > Ceilings
Optional
(N) Setup > Depreciation > ITC
Elements
(N) Setup >Asset System >Price Indexes
Copyright 2007, Oracle. All rights reserved.
Apr
15
Prorate
Calendar
May
1
Prorate
Period
Prorate Date
Date Placed in
Service
Journal
Entry
Depreciation
Expense per
period
Get
Rate
R = 20%
Rate Table
Depreciation Calendar,
Divide Depreciation
flag, and Depreciate
When Placed in Service
flag
Annual
Depreciation
Multiply by Cost
or Net Book Value
Depreciation Methods
Life-Based
Flat-Rate
Units-ofProduction
Year 1
Year 2
Year 3
60%
30%
10%
Year 1
Year 2
Year 3
33%
33%
33%
Year 1
Year 2
Year 3
10M
14M
11M
Barrels
Capacity 100M Barrels
Life-Based
Year 1
Year 2
Year 3
60%
30%
10%
Definition
Prorate period
Depreciation
Annual
Depreciation
Depreciation
expense per
period
Flat-Rate
Year 1
Year 2
Year 3
33%
33%
33%
Nov
21
Prorate
convention
Date placed
in service
Dec
1
Enter production
amounts
Prorate date
Depreciation
expense per period
Rate =
Production/Capacity
X
Multiply by
depreciable
basis
Copyright 2007, Oracle. All rights reserved.
Manual Entry
Enter
Production
Information
FA_PRODUCTION_INTERFACE
via Upload Production Program
Tax
Method Restrictions
You can change the method from calculated, table, or
flatrate to production only in the period you add the
asset.
An asset can have a production method in the tax
book only if it has a production method in the
corporate book.
You can change the depreciation method from
production to calculated, table, or flatrate type in the
corporate book only if the asset does not use a
production method in any associated tax book.
An asset can have any kind of method in the tax book
and a production method in the corporate book.
Capacity Restrictions
The capacity must be the same in all books in which
the asset uses a production method. You change the
capacity in the corporate book.
Mass Copy copies the capacity adjustment to each tax
book regardless of the Copy Adjustments and Allow
Amortized Adjustments flags for the tax book.
If the book does not allow amortized adjustments,
Mass Copy copies the adjustment as an expensed
adjustment
Prorate Conventions
Prorate Convention
Prorate Date
Following Month
01-MAY-YYYY
Mid Month
15-APR-YYYY
Month
01-APR-YYYY
Half-Year
01-JAN-YYYY
Next Period
Opened
Yes
Close
Period?
No
Yes
Rollback
Depreciation?
No
Ready to Create
Journal Entries
Generate Accounts
Depreciation Run
Reserve Ledger
Reports
Rollback Depreciation
Run depreciation
Handle
exceptions
Rollback
depreciation and
make corrections
Run depreciation
and close period
Q3
Q2
Q1
Annual Budget
$40,000
$30,000
$20,000
$10,000
0
Q1
Q2
Q3
Q4
Defining a Projection
Run Projection
Asset
Year 1: $12,000
Depreciation
Projection Report
Year 2: ?
Year 3: ?
Estimated
Year 2: $9,000
Year 3: $6,000
Depreciation Forecasts
What would be the effect on depreciation
expense for all assets in the category
COMPUTER-PC in my corporate asset
book, if I change the depreciation method
from STL 5 to STL 3?
Override
Amounts
Load Table
Run Depreciation
Depreciation
PURPOSE
Diminishing Value
Report
Expensed Property
Report
Fully Reserved
Assets Report
PURPOSE
Nondepreciating
Property Report
To locate nondepreciating
property.
Production History
Report
Depreciation
Projection Report
What-If Depreciation
Analysis Report
Summary