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If you retire an asset before it is fully reserved, Oracle Assets uses the retirement convention to determine how much depreciation to take in the last year of life based on the retirement date.

Oracle Assets determines the prorate period in your prorate calendar by using the prorate date. If you retire the asset before it is fully reserved, then Oracle Assets uses the prorate date from the retirement convention to determine how much depreciation to take in the asset's last year of life.

You can define prorate conventions with prorate dates that have the following effect:

• ACTUAL MONTHS CONVENTION: Takes one month of depreciation for the month you acquire the asset. Does not take any depreciation for the last month of the asset life. For a retirement convention, does not take depreciation in the month you retire the asset.

• HALF-YEAR CONVENTION: Takes half a year of depreciation in the year you acquire the asset and in the last year of life. For a retirement convention, take half a year of depreciation in the year you retire the asset. The asset is considered retired on the midpoint of the year retired.

• STANDARD MODIFIED HALF-YEAR CONVENTION: Takes a full year of depreciation in the year you acquire the asset if you acquire it in the first half of the year. Does not take any depreciation if you acquire the asset in the second half of the year. For a retirement convention, take a full year of depreciation in the year you retire the asset if you retire it in the second half of the year. Does not take any depreciation if you retire the asset in the first half of the year.

• ALTERNATE MODIFIED HALF-YEAR CONVENTION: For a retirement convention, take one fourth of a year of depreciation in the year your retire the asset.

• FOLLOWING MONTH CONVENTION: Does not take any depreciation in the month you acquire the asset. Takes one month of depreciation in the last month of asset life. For a retirement convention, take one month of depreciation for the month you retire the asset.

• ACRS HALF-YEAR CONVENTION: Takes a full year of depreciation in the year you acquire the asset. Does not take any depreciation in the last year of life. For a retirement convention, does not take any depreciation for the year you retire the asset.

• MID-MONTH CONVENTION: Takes half a month of depreciation in the month you acquire the asset. Takes half a month of depreciation in the last month of asset life. For a retirement convention, take half a month of depreciation in the month you retire the asset. An asset is considered retired on the midpoint of the retirement month.

• MID-QUARTER CONVENTION: Takes half a quarter of depreciation in the quarter you acquire the asset. Takes half a quarter of depreciation in the last quarter of asset life. For a retirement convention, take half a quarter of depreciation in the quarter you retire the asset. An asset is considered retired on the midpoint of the retirement quarter.

• Any other convention.

Attention: Remember that the prorate convention, retirement convention, and depreciation method work together to produce the depreciation amounts. You must set up depreciation rates for each prorate period.

See Also

Oracle Assets System Setup

Depreciation Calculation