Adjusted Cost Is Incorrect After Adjusting Salvage Value of Impairment Asset with JP-DB XXYR
(Doc ID 2082172.1)
Last updated on MARCH 15, 2023
Applies to:
Oracle Assets - Version 12.1.3 and laterInformation 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
Changes
Cause
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In this Document
Symptoms |
Changes |
Cause |
Solution |
References |