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Handle Tax Audits

You can adjust the depreciation taken for one or all assets for a previous fiscal year in a tax book. Use the Reserve Adjustments window to adjust the tax book accumulated depreciation for a single asset. Use Mass Depreciation Adjustments to adjust the depreciation expense taken for all the assets in a tax book. Some tax authorities allow you to prorate the depreciation expense you recognize, such as for French Fiscal Depreciation.

You can adjust tax book depreciation between minimum and maximum depreciation expense amounts according to a factor you enter. The minimum and maximum amounts are determined by comparing the accumulated depreciation in your tax book, in a control tax book, and in the associated corporate book.

Prepare for a Mass Depreciation Adjustment

You must define your corporate, tax, and control tax books before performing a Mass Depreciation Adjustment. The adjusted tax book and control tax book must be associated with the same corporate book.

In addition, the fiscal year must be closed in all three books to run Mass Depreciation Adjustment. You must be in the first period of your fiscal year immediately following the closed year you are adjusting. You can only adjust the previous fiscal year in your tax book.

You cannot adjust depreciation if you have performed any transactions in the tax book in the current period. You also cannot adjust depreciation if you have performed any transactions in the corporate book that affect the distribution, units, or category of the assets in the current period, such as transfers, reclassifications, unit adjustments, or partial retirements.

You cannot adjust the depreciation expense taken in a previous fiscal year for assets that use a units of production depreciation method in the adjusted tax book. Oracle Assets does not adjust depreciation for assets where the cost at the end of the fiscal year is not the same in all three books, or where there was an asset retirement during the fiscal year. The log file for the mass depreciation adjustment concurrent request lists assets that the program did not adjust and the reasons why.

Control Your Mass Depreciation Adjustment

Use the Status field to see the current status of the adjustment and to determine the next possible action. Each adjustment definition has a unique Mass Transaction Number that you can use to find your adjustment definition when you want to perform the next step.


See Also

Mass Depreciation Adjustment Examples

Determine Adjusted Accumulated Depreciation

Adjusting Tax Book Accumulated Depreciation

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