R12.1: After Impairment, JP-STL Asset is Getting Fully Reserved Although Net Book Value is Bigger than Salvage Value (Doc ID 1906988.1)

Last updated on APRIL 06, 2016

Applies to:

Oracle Assets - Version 12.1.3 and later
Information in this document applies to any platform.

Symptoms

After posting Impairment, JP-STL XXYR asset is getting fully reserved although a net book value is bigger than a salvage value.

Expected Behavior
It should Not be getting a fully reserved asset because the net book value does not reach the salvage value.

Please refer to the following Note for more information on the above behavior:
Adjusting Salvage Value After Posting Impairment for Japanese Straight Line (JP-STL) (Doc ID 1905124.1)

 

Steps to Reproduce
1.  2014-02 *** Adding an asset

    Cost                               : 12791655
    YTD depreciation                   : 354970
    Accumulated depreciation           : 4614592
    Date in Service                    : 01-APR-2003
    Depreciation method                : JP-STL 27YR (.037)
    Salvage value                      : 10%  (1279166)
    Depreciation limit amount          : 95%  (639583)


2.  2014-03 *** Impairment

    Impairment Amount    : 6752357


3.  2014-03 *** After postting Impairment

    FA_BOOKS ***
    COST      ADJUSTED_COST  DEPRN_METHOD  RATE   SALVAGE_VALUE  
    --------  -------------  ------------  -----  -------------  
    12791655       11512489  JP-STL 27YR   0.037        1279166  
    12791655          74548  JP-STL 27YR   0.037        1279166  

    ALLOWED_DEPRN_LIMIT_AMOUNT  EOFY_RESERVE  PERIOD_COUNTER_FULLY_RESERVED
    --------------------------  ------------  -----------------------------
                        639583       4259622                               
                        639583       4685584                          24168 <-- Point

    FA_DEPRN_SUMMARY ***
    PERIOD_COUNTER  DEPRN_AMOUNT  YTD_DEPRN  DEPRN_RESERVE
    --------------  ------------  ---------  -------------
             24166             0     354970        4614592
             24167         35497     390467        4650089
             24168         35495     425962        4685584  <--- Postting Impairment

     ADJUSTED_COST  SYSTEM_DEPRN_AMOUNT  IMPAIRMENT_RESERVE
     -------------  -------------------  ------------------
          11512489                                        0
          11512489                35497                   0
          11512489                35495             6752357 <--- Postting Impairment

    Calculation
    Net book value
        = Cost - Deprn_Reserve(after Impairment) - Impairment_Reserve
        = 12791655 - 4685584 - 6752357
        = 1353714

    Salvage value
        = 1279166

    Expected Behavior
    PERIOD_COUNTER_FULLY_RESERVED should be null, instead of 24168.

    Net book value(1353714) is bigger than salvage value(1279166).  
    Therefore, this asset should Not be getting a fully reserved asset.


Cause

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