Gain Loss Amount is Calculated Incorrectly When Retiring An Impaired Asset (Doc ID 1390604.1)

Last updated on MARCH 17, 2023

Applies to:

Symptoms

The gain loss amount is incorrect when retiring an impaired asset.  The impairment reserve is not reflected in the amount when retiring.

Example
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1.  Add an asset *** 2010/09
Cost : 776921
YTD Depreciation : 0
Accumulated Depreciation : 407667
Date in Service : 20-AUG-2008 20-08-2008
Method : STL (Life in Months : 72)
Salvage Value : 0 (0 %)
Limit Amount : 0 (Amount)

2.  Overrides depreciation:7856 from 2010/09 to 2011/07.

3.  Overrides depreciation:7690 in 2011/08.

4.  Impairment *** 2011/08
Impairment Date : 20-AUG-2011
Impairment Loss : 275147

5.  Retirement **** 2011/11
Retire Date : 01-NOV-2011
Cost Retired : 776,921
Proceeds of Sale : 0
Retirement Convention : SKA_CONV04 ** Next Month Convention

6.  Check the reserve.
Accumulated Depreciation : 501773
Impairment Reserve : 275147

7.  Run Calculate Gains and Losses.
8.  Check the Retirement on Asset Workbench.

Cost Retired : 776,921
Proceeds of Sale : 0
Cost of Removal : 0
Gain/Loss Amount : -275,148 <- Should be -1. *

* Cost - Accumulated Depreciation - Impairment Reserve
= 776921 - 501773 - 275147 = 1.

9.  Check the Transaction Detail of FULL RETIREMENT transaction on Transaction History

Cost Retired : 776,921
Proceeds of Sale : 0
Cost of Removal : 0
Gain/Loss Amount : -275,148 <- Should be -1

Assets should calculate with this formula:

Gain/Loss = [Proceeds of Sale] - [Cost of Removal] - [Net Book Value Retired] + [Revaluation Reserve Retired Retirement] * [Net Book Value Retired] = [Cost] - [Reserve Retired] - [Impairment Reserve Retired]

Changes

Cause