Adjusted Cost Is Incorrect After Adjusting Salvage Value of Impairment Asset with JP-DB XXYR

(Doc ID 2082172.1)

Last updated on NOVEMBER 25, 2015

Applies to:

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

Symptoms

Incorrect Depreciation Basis (Adjusted Cost) is calculated for JP-DB XXYR asset when adjusting salvage value for the asset which has already posted Impairment in the same fiscal year.

Condition
- Asset with JP-DB XXYR
- Impairment is posted
- Adjusting salvage value after posting Impairment
- There are both adjusting salvage value and posting Impairment in the same fiscal year

Steps to Reproduce
1.  2015-01 *** Addition
    
    Cost                       : 352967
    YTD depreciation           : 7551
    Accumulated depreciation   : 281284
    Date in Service            : 01-APR-2003
    Depreciation method        : JP-DB 17YR
    Salvage value              : 10% (=35297)
    Depreciation limit amount  : 95% (=17649)


2.  2015-02 *** Impairment
    
    (1) Before performing Impairment

        Cost                       : 352967
        YTD depreciation           : 8390
        Accumulated depreciation   : 282123
        Date in Service            : 01-APR-2003
        Depreciation method        : JP-DB 17YR
        Salvage value              : 10% (=35297)
        Depreciation limit amount  : 95% (=17649)

    (2) Performing Impairment

        Impairment amount   : 60005

    (3) After performing Impairment

        Cost                       : 352967
        YTD depreciation           : 9229
        Accumulated depreciation   : 282962
        Date in Service            : 01-APR-2003
        Depreciation method        : JP-DB 17YR
        Salvage value              : 10% (=35297)
        Depreciation limit amount  : 95% (=17649)
        Impairment Reserve         : 60005
        Adjusted recoverable cost  : 335318 (= cost - limit amount)
        Deprn Reserve + Impairment : 342967 (= 282962 + 60005)


    Memo : (Deprn Reserve + Impairment) is bigger than Adjusted recoverable cost
            -> Getting a fully reserved and it is an expected behavior.


3.  2015-03 *** Adjusting Salvage value and limit amount with Amortization

    Cost                       : 352967
    YTD depreciation           : 9229
    Accumulated depreciation   : 282962
    Date in Service            : 01-APR-2003
    Depreciation method        : JP-DB 17YR
    Salvage value              : 10% (=35297)  -> 29297 ***Update***
    Depreciation limit amount  : 95% (=17649)  -> 1     ***Update***
    Impairment Reserve         : 60005
    -------------------------------------------
    Amortized flag             : Yes
    Amortization start date    : 02-MAR-2015

 

Result:::

    FA_BOOKS ***
    COST   DEPRN_METHOD SALVAGE_VALUE LIMIT_AMOUNT EOFY_RESERVE ADJUSTED_COST
    ------ ------------ ------------- ------------ ------------ -------------
    352967 JP-DB 17YR           35297        17649       273733         43937
    352967 JP-DB 17YR           35297        17649       273733        -25297
    352967 JP-DB 17YR           29297            1       273733        -10068 <--Incorrect


    ADJUSTED_COST should be -19297, instead of -10068.


    Current Behavior on Adjusting Salvage value
    adjusted_cost(JP-DB)
        = cost - eofy_reserve - impairment_reserve - salvage_value
        = 352967 - 273733 - 60005 - 29297
        = -10068

    Expected Behavior on Adjusting Salvage value
    adjusted_cost(JP-DB)
         = cost - deprn_reserve - impairment_reserve - salvage_value
         = 352967 - 282962 - 60005 - 29297
         = -19297

Cause

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