About Retirements
Retire an asset when it is no longer in service. For example, retire an asset that was stolen, lost, or damaged, or that you sold or returned.
Full and Partial Retirements by Units or Cost
You can retire an entire asset or you can partially retire an asset.
- When you retire an asset by units, Oracle Assets automatically calculates the fraction of the cost retired
- When you retire an asset by cost, the units remain unchanged and the cost retired is spread evenly among all assignment lines
You cannot retire assets by units in your tax books; you can only perform partial and full cost retirements in a tax book. Also, you can only perform full retirements on CIP assets; you cannot retire them by units, or retire them partially by cost.
If you perform multiple partial retirements on an asset within a period, you must run the calculate gains and losses program between transactions.
Gain/Loss = Proceeds of Sale - Cost of Removal - Net Book Value Retired + Revaluation Reserve Retired
If you partially retire a units of production asset, you must manually adjust the capacity to reflect the portion retired.
Full Retirement for a Group of Assets (Mass Retirement)
Use the Mass Retirements window to retire a group of assets at one time. You specify selection criteria, including asset category, asset key, location, depreciation expense account segments, employee, asset number range, and date placed in service range, to select the assets you want to retire. You can also elect to automatically retire subcomponents along with the parent asset.
When you define a mass retirement, you can choose to immediately submit the concurrent request to retire the selected assets, or you can save the mass retirement definition for future submission. You can change the details of any mass retirement before you submit the concurrent request.
When you submit a mass retirement, Oracle Assets automatically runs the Mass Retirements Report and the Mass Retirements Exception Report. You can review these reports, perform a mass reinstatement, or adjust an individual retirement transaction if necessary.
Oracle Assets does not retire the following types of assets, even if they are selected as part of a mass retirements transaction:
- Assets added in the current period
- Assets with transactions dated after the retirement date you enter
- Assets that are multiply distributed and one or more values do not meet the mass retirement selection criteria
- For reinstatements, assets retired during a prior fiscal year
Independence Across Depreciation Books
You can retire an asset or a group of assets from any depreciation book without affecting other books. To retire an asset from all books, retire it from each book separately, or set up Mass Copy to copy retirements to the other books in the Book Controls window.
Retirement and Reinstatement Statuses
Each retirement transaction has a status. A new retirement receives the status PENDING. After you run depreciation or calculate gains and losses, the status changes to PROCESSED.
When you reinstate a PENDING retirement, Oracle Assets deletes the retirement transaction and the asset is immediately reinstated. If you reinstate a PROCESSED retirement, Oracle Assets changes the status to REINSTATE, and you must rerun the Calculate Gains and Losses program or run depreciation to process the reinstatement.
When you perform a mass retirement, Oracle Assets creates PENDING retirement transactions. If you submit a mass reinstatement before running the Calculate Gains and Losses program, Oracle Assets immediately reinstates these assets. If you submit a mass reinstatement to reinstate PROCESSED retirements, you must rerun the Calculate Gains and Losses program or run depreciation to process the reinstatements.
ITC Recapture
If you retire an asset for which you took an investment tax credit (ITC) and the ITC recapture applies, Oracle Assets automatically calculates it.
Correct Retirement Errors
You can undo asset retirement transactions, and Oracle Assets creates all the necessary journal entries for your general ledger to catch up any missed depreciation expense. You can reinstate an individual or mass retirement transaction. For multiple partial retirements, you can reinstate only the most recent partial retirement. You cannot reinstate an asset retired in a previous fiscal year. You can only reinstate assets retired in the current fiscal year.
Retirement Conventions
Oracle Assets lets you use a different prorate convention when you retire an asset than when you added it. The retirement convention in the Retirements window and the Mass Retirements window defaults from the retirement convention you set up in the Asset Categories window. You can change the retirement convention for an individual asset in the Retirements window before running the Calculate Gains and Losses program.
Per Diem Retirements
If you set up a book to divide depreciation by days and to use both a daily prorate convention and a daily prorate calendar, and if you retire an asset in that book in the current period, Oracle Assets takes depreciation expense for the number of days up to, but not including, the date of retirement. If you perform a prior period retirement, Oracle Assets backs out the depreciation expense through the date of retirement. If you reinstate the asset, Oracle Assets catches up depreciation expense through the end of the current period.
Retirement Transactions
For assets added in the current accounting period:
You cannot retire an asset if you added it in the current period. Instead, you must enter your retirement as a prior period retirement after you run depreciation. Or if you do not want to create any journal entries, use Edit, Delete Record from the menu in the Asset Details window to delete the asset any time in the current period.
For prior-period retirement dates:
You can retire retroactively only in the current fiscal year, and only after the most recent transaction date.
You cannot perform prior period retirements to assets having unplanned depreciation amounts. See: Unplanned Depreciation.
Proceeds of Sale and Cost of Removal
You can enter proceeds of sale and cost of removal amounts when you perform a retirement or mass retirement. For a mass retirement, you enter the total proceeds of sale and/or the total cost of removal amounts, and Oracle Assets prorates the total amounts over the assets being retired according to each asset's current cost.
Oracle Assets uses the following formula to prorate the proceeds of sale amount across the assets you select:
Proceeds of Sale (per asset) = Current cost of asset/Total current cost of all selected assets X Proceeds of Sale
Oracle Assets uses the following formula to prorate the cost of removal amount across the assets you select:
Cost of removal (per asset) = Current cost of asset/Total current cost of all selected assets X Cost of Removal
See Also
Retiring Assets
Correcting Retirement Errors (Reinstatements)
Calculating Gains and Losses for Retirements
Journal Entries for Retirements and Reinstatements
Mass Retirements Report and Mass Retirements Exception Report
