Oracle Assets Vs Accounting standards

[anjan123]

Hi Gurus,


I have a doubt in Oracle assets.

1. As per International Accounting standards we have only 2 depreciation methods.

a) Straight Line
b) Diminishing Balance or Wite down Method.

Any asset will depreciate either STL or DBM/WDM.

where as in Oracle Calcultion has given 5 depreciations.

a) Flat
b) Table
c) Production
d)Calculated
e) Formula

on what basis these methods will calculate depreciation in Oracle assets.

Please give me proper reply with suitable examples.


Regards
Anjan

[oteixeira]

Hello Anjan.

There are many seeded Straight Line Methods. Just navigate to Setup/Depreciation/Methods and query for STL method. You will find about 30 pre-defined Straight-Line methods.
Example:
STL with Life Years = 5 and Months Life = 0 and calculation basis = COST
In this case, an asset with a cost of 10,000 will depreciate 2,000 in the first year of depreciation (166.66 per month)

The are also seeded methods for DB and you can create your own.

Octavio

[tgs100]

Though most of the countries use STL and WDV depreciation methods, there are some countries use sum of the digits method and unit of production method.

- Oracle's calculated type is used for STL method.
- Oracle's Flat type is used for WDV method
- Oracle's production type is used for units of production method
- Oracle's Table type is used for Sum of the years method

Cheers,
Saravanan TG

[anjan123]

Hi,


Thank very much for your reply , could you please give some real time example for each method.



Octavio i have one question on your reply, depreciation calculation base we can decide either Original cost or Net Book Value. is there any restriction between Deprecition method and calculation base.


Regards
Anjan

[oteixeira]

Hi Anjan.

This is an excerpt from the FA User's Guide:

'For methods using the net book value, you use the flat-rate and the recoverable net book value at the beginning of each fiscal year to calculate the annual depreciation. In the second year of the asset life (fiscal 1994), the net book value as of the beginning of the fiscal year is $9,000. Applying the 20% rate yields an annual depreciation amount of
$1,800. Oracle Assets divides this amount evenly across all twelve accounting periods inthe year, so depreciation expense for each period is $150.
Similarly, the net book value at the beginning of the 1995 fiscal year is $7,200. Oracle Assets calculates annual depreciation of $1,440 and divides this amount evenly to get the depreciation amount for each period. Oracle Assets repeats this process until the asset is fully depreciated or retired.'

You can combine a lot of stuff but, for example, if you define a method with Calculation Basis =NBV, the type cannot be Calculated, if you need something like that you will need to choose the Table Type.

Octavio