How Is Depreciation Calculated for Flat NBV Method With Use Transaction Period Basis Rule?

(Doc ID 875534.1)

Last updated on JULY 20, 2017

Applies to:

Oracle Assets - Version 11.5.10.0 and later
Information in this document applies to any platform.

Goal

Oracle Assets provides the Depreciable Rules feature to accommodate depreciation method setup requirements not met by the Cost or NBV calculation basis types. The combination of depreciable basis rule and depreciation method determine how depreciable basis and depreciation expense are derived. As of now 11 depreciable basis rules are available and one of them is "Use Transaction Period Basis Rule."

Use Transaction Period Basis is one of the most used basis rules and this basis rule is available for Flat method with NBV basis only. When this basis rule is used, the NBV basis will be re-set at the beginning of the fiscal year or when an adjustment is done and the below formula is used for calculating NBV.

NBV basis = Cost – Salvage Value – Accumulated Depreciation

In Oracle Assets, the depreciation amount is mainly impacted by the following three transactions.  This document explains the depreciation calculation for each of them using this rule:

  1. Addition
  2. Adjustment
  3. Partial Retirement

Solution

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