R11i to R12.1 Tax Book Requirement for Depreciation Method Changes MACRS HY and MACRS MQ

(Doc ID 1210237.1)

Last updated on SEPTEMBER 01, 2017

Applies to:

Oracle Assets - Version 11.5.10.0 to 12.1.3 [Release 11.5 to 12.1]
Information in this document applies to any platform.
Depreciation Method Changes

Goal

For IRS requirements, there is a need to wait until the end of the fiscal year to see whether the assets placed in service in the last quarter exceeds 40% of the assets placed in service for the whole year.

If so, MACRS MQ applies. If not, MACRS HY applies. This results in the corporate and tax books not being in sync.

For example, the corporate book's current period is Mar-10 of the fiscal year 2009, but all the tax books are in the current period of Mar-09 in the fiscal year 2008.  The calculation has to be quarterly asset additions for the corporate book for the whole fiscal year with the depreciation method to be applied in the tax book based on if the last quarter has more than 40% of assets placed in service. 
Example parameters:
Fiscal Year is April to March
Period Mar-10 is open in the corporate and tax books, meaning periods up to Feb-10 are closed after running depreciation.
The depreciation method is changed to HY in Mar-10 for all assets purchased in current fiscal year because last quarter asset purchases are >= 40% of total yearly purchases.

Solution

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