How to Account the Asset Impairment Loss by Net Method
(Doc ID 2518066.1)
Last updated on JANUARY 22, 2020
Applies to:Oracle Assets - Version 12.1.3 and later
Information in this document applies to any platform.
Oracle Assets records the impairment loss amount to Accumulated Impairment, resulting in the reduction of the net book value of the asset but no adjustment to the Cost or Accumulated depreciation. The net book value of the asset after impairment will be the depreciation basis and amortized over the remaining life of the asset as depreciation expense.
The latest US GAAP accounting guidance indicates that for Value in Use Impairments the Asset Basis is adjusted down to reflect the new carrying value, Accumulated Depreciation is reduced to zero and no Accumulated Impairment is recorded. Post impairment Asset Basis would then be depreciated over the remaining life, if any, for the impaired asset.
The book value of the asset and depreciation expense amount after impairment is same in both approach but only cost and accumulated depreciation amount will differ.
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