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ER : NEED TO USE NBV BASIS FOR UOP DEPRECIATION METHODS (Doc ID 2623167.1)

Last updated on DECEMBER 22, 2019

Applies to:

Oracle Assets - Version 12.1.1 to 12.2.9 [Release 12.1 to 12.2]
Information in this document applies to any platform.

Goal

 ENHANCEMENT REQUEST DESCRIPTION

==========================

Customer has a strong need to use depreciation methods which is defined as the Units of Production method on NBV basis

 

BUSINESS NEED
===========
The business has provided a case on why they need this facility.
The Santos accounting policy manual (relevant sections copied below) requires the use of the Units of Production depreciation method for
offshore areas of interest and prescribes the use of NBV to determine the depreciable value.


Application of Depreciation Methods
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Depreciation of buildings, plant and equipment in relation to offshore areas of interest is calculated using the unit of production method of
depreciation on a field basis from the date of commencement of production


Unit of Production Method
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The unit of production method writes off the Depreciable value of buildings, plant and equipment over the life of the hydrocarbons reserves of the field.
The depreciable value of offshore area of interest, plant and equipment comprises:
(1)The unamortized carrying amount, being cost less accumulated recoverable amount write-downs less accumulated depreciation.
(2)Any future depreciable costs necessary to produce the hydrocarbon reserves, less.
(3)The estimated salvage value.
The unit of production depreciation method formula is:


Depreciation =Depreciable value x Production for the period for the period at the beginning of the period
Proved and probable reserves calculated for the beginning of the period

 

Solution

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In this Document
Goal
Solution
References

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