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Additional Depreciation Calculated in Last Period of Life for Amortized Asset (Doc ID 2551822.1)

Last updated on DECEMBER 10, 2019

Applies to:

Oracle Fusion Assets Cloud Service - Version 11.13.19.01.0 and later
Information in this document applies to any platform.

Symptoms

Larger depreciation expense is calculated in last period of life for amortized life-adjusted asset (as per What-If Depreciation Report).

No additional depreciation would be calculated in last period of life if NBV was distributed over remaining life.

For example:

Book: ABC CORP BOOK
Asset Number: 1003634
Cost: 56990.23
DPIS: 08/05/2018
Prorate Date: 08/06/2018

Depreciation calendar => monthly
Prorate calendar => monthly
Deprn allocation => by days

2018 => 364 days
2019 => 364 days

o Asset added in 9-18 (09/03/2018 to 09/30/2018) with no YTD or LTD amount

o Amortized life adjustment in 12-18, amort date 12/27/2018, STL 36 to 16 months
   NBV (cost - reserve) in period of adjustment: 51145.07

RAF calculations: cost - (what reserve should be based on new method/life) /cost

8-18 = 28 days
9-18 = 28 days
10-18 = 28 days
11-18 = 28 days

Total: 112 days

August 2018 to November 2019 = 16 months = 486 days

Annual Depreciation: 56990.23 / 1.333333 = 42742.68
Daily Depreciation: 42742.68 / 486 = 117.42

RAF: (56990.23 - 13151.59) / 56990.23 = .769230

Rate Adjustment Factor (RAF): .769230620757277168384826662394589388392

 

Depreciation calculation after amortized adjustment:

Annual Depreciation: NBV / life / RAF = 51145.07 / 1.333333 /.769230620757277168384826662394589388392 = 49866.46
Daily Depreciation: 49866.46 / 364 days = 136.9957 per day

Asset scheduled to be fully depreciated in 11-19.

Ran What-If which shows a larger depreciation expense in last year of life:

2922.58 => 9-18, period of addition
1461.29
1461.29
4794.85 => amortized life adjustment from 36 to 16 months, 12-18
4794.85
3835.88
3835.88
3835.88
3835.88
4794.85
4794.85
3835.88
3835.88
3835.88
5114.51 => 11-19 (28 days)
=======
56990.23 => total asset cost

Cause

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In this Document
Symptoms
Cause
Solution
References


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