Assets Depreciating Under Units of Production (Oracle Assets Help)


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Assets Depreciating Under Units of Production

You can use the units of production method to allocate the cost of an asset by the quantity of resource extracted or used each period. You can automatically or manually enter production amounts for the asset, and project future production amounts if necessary. There are some restrictions when using the units of production depreciation method. For example, since Oracle Assets only stores production amounts for an asset in the corporate book, there are some restrictions on changing depreciation information in corporate or tax books.

Production Interface

You can load production automatically each period using the production interface. You also can enter or update production manually in the Periodic Production window.

Production Amount

The start date and end date you enter to which production amounts apply must fall within a single depreciation period in Oracle Assets.

You cannot enter production for dates before the asset's prorate date in the corporate book or for a period for which you have already run depreciation.

You cannot enter production for periods prior to the current open period in your corporate book.

You also cannot enter production for date ranges which overlap. For example, if you enter production for 01-JUN-1995 through 15-JUN-1995, you cannot enter production for 15-JUN-1995 through 30-JUN-1995. You can enter production for 16-JUN-1995 through 30-JUN-1995.

Projected Production Information

You can enter production for dates in the future to calculate depreciation projections for future periods. You can update the projected amounts when you know the actual production for the period and want to actually depreciate the asset.

Retirements

If you have entered production information for future periods to project depreciation expense, you may have to remove this projected production information before you retire a units of production asset. Oracle Assets uses all of the production amounts you entered for dates before the retirement prorate date to calculate depreciation expense. If your retirement prorate date is after the retirement date, you may have to remove projected production to avoid using it to calculate actual depreciation expense.

When you partially retire a units of production asset, you must manually adjust the capacity in the Books window. Adjust the capacity to reflect the decrease only for production not already taken, since you already entered the actual production amounts.

If you accidentally enter too much production causing the asset to become fully reserved, you can enter negative production amounts to correct the error.

If you continue to use an asset after it is fully reserved, Oracle Assets ignores the production information you enter.

Prior Period Transactions

If you enter a retroactive addition or reinstatement, you must enter the missed production information so Oracle Assets can calculate depreciation. If you enter a retroactive retirement, Oracle Assets reverses the depreciation taken since the date of the retirement.

Category Defaults

You can specify a production capacity and unit of measure that you usually use for assets in a category. When you enter an asset in this category, Oracle Assets defaults the capacity and unit of measure. You can override the default values for an individual asset if necessary.

Restrictions

You cannot enter production for a construction-in-process (CIP) asset before you capitalize it. Similarly, you cannot enter production for a an asset before its prorate date. If you use a prorate convention such as actual months, you can enter production for the period you added the asset.

You cannot enter or upload units of production assets with accumulated depreciation. Instead, add the asset with zero accumulated depreciation, and then provide the life-to-date production amount for the asset in the Books window for the current period. Oracle Assets uses the production amount you enter to calculate the catchup depreciation.

Changing the Depreciation Method

You can change the method from calculated, table, or flat-rate to production only in the period you add the asset.

Since Oracle Assets only stores production amounts for an asset in the corporate book, there are some restrictions on changing depreciation information in corporate or tax books.

An asset can have a production method in the tax book only if it has a production method in the corporate book. You can change the depreciation method from production to calculated, table, or flat-rate type in the corporate book only if the asset does not use a production method in any associated tax book. An asset can have any kind of method in the tax book and a production method in the corporate book.

Changing the Capacity

The capacity must be the same in all books in which the asset uses a production method. You can change the capacity for the asset in the corporate book only. Use Mass Copy to copy the capacity adjustment to each tax book.

Mass Copy

Use Mass Copy to copy adjustments to your tax books. If you use a units of production method in a tax book, you must Mass Copy from the associated corporate book each period to ensure that the capacity is up-to-date.

Mass Copy always copies capacity adjustments for your units of production assets, regardless of the Mass Copy rules you specified for the book. If you do not allow amortized adjustments in your tax book, Mass Copy copies an amortized capacity adjustment as an expensed adjustment.