Inflation Accounting for Assets Procedures
Definition
Inflation Accounting for Assets provides functionality to support the revaluation of fixed assets and the associated accounting entries. This is part of the UK government's initiative on resource accounting and budgeting.
Overview
UK Government departments are required to provide financial statements which measure the resources consumed in achieving their objectives. All costs are included in this requirement, including the cost of using capital assets. These costs must be stated in current price terms to make them comparable across departments and properly reflect the resources consumed. Inflation accounting is used in particular for fixed assets, for example, buildings. The cost of all assets and their accumulated depreciation must be revalued to current day terms by reference to published price indexes and professional valuations.
The following types of occasional revaluation are available:
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Indexed revaluations
These revaluations depend on a specific index value to calculate the revalued cost.
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Professional revaluations
This revaluations require a new cost value to be provided.
The following windows are available in Inflation Accounting for Assets:
Indexed-Professional Revaluation Window
The Indexed - Professional Revaluation window enables users to enter the parameters for a revaluation run. The user can also perform indexed, professional, or both types of revaluations in one revaluation run.
Revaluation Window
The Revaluation window enables users to view individual assets for the category selected on the Indexed - Professional Revaluation window.
Indexed-Professional Revaluation Window
The Indexed - Professional Revaluation window enables users to enter the parameters for a revaluation run. The user can also perform indexed, professional, or both types of revaluations in one revaluation run.
Results - Revaluation Window
The Results - Revaluation window enables users to view the proposed effect of a professional revaluation.
Exceptions Window
The Exceptions window lists any assets that will not be included in the revaluation process, and provides explanations for the exclusions.
Inflation Accounting - Projection Window
The Inflation Accounting - Projection window enables users to run projections reports. The Projections report is a variable format report and projects depreciation charges into the future based on current assets and indexes. Revaluations are based on the revalued costs as at the last closed period and are revalued in each of the selected revaluation periods within the report range of periods. All active assets are available for projection, including non-depreciating assets but excluding fully retired assets. This report enables users to review future charges related to budgets and can be used in cash flow projections as a non-cash adjustment from a profit forecast.
Variable Format Reports
The Projections report is available as a variable format report, which means users can view and manipulate the report data in a number of desktop applications. For example, the information can be downloaded into Microsoft Excel to be sorted and analyzed using familiar spreadsheet features. The report can also be formatted as an HTML file and placed on a Web server.
To create a variable format report, an attribute set that contains formatting instructions is applied to the Projections report. In Oracle Applications, attribute sets are defined using the RXi Reports Administration Tool. A default attribute set is available for the Projections report, alternatively a user-defined attribute set can also be applied to the report. The report can be published using one of the following options: CSV, HTML, TEXT, or TAB.
For information on the RXi Reports Administration Tool, see Oracle Financials RXi Reports Administration Tool User Guide.
Inflation Accounting Inquiry Window
The Inflation Accounting Inquiry window is accessed from the Oracle Assets View Financial Information window. The View Financial Information window enables users to view historic values for an asset, and the Inflation Accounting Inquiry window displays the impact of inflation accounting on the values.
Revaluation History Window
The Revaluation History window is accessed from the Inflation Accounting Inquiry window and enables users to view the full history of cost revaluations affecting a particular asset. Cost revaluations resulting from occasional revaluation, reclassifications, prior period additions, cost adjustments, and the implementation toolkit are all displayed in the Revaluation History window. All revaluations identify whether the revaluation type is indexed, professional, or as a result of the implementation toolkit.
Prerequisites
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Inflation Accounting for Assets setup must be completed.
For information on setting up Inflation Accounting for Assets, see Inflation Accounting for Assets Setup, Oracle Public Sector Financials (International) Implementation Guide.
Performing Indexed-Professional Revaluation
Entering Parameters and Running Revaluations
To enter revaluation parameters and run a revaluation, perform the following steps.
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Navigate to the Indexed - Professional Revaluation window as follows:
IGI Fixed Asset Management, OPSFI - Inflation Accounting - Revaluation
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In the Book field, select a book from the list of values.
The Status, Revaluation ID, and Revaluation Date fields are automatically populated. All available categories for the book are listed in the Categories region.
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In the Categories region, identify the asset categories to be revalued by selecting the check boxes next to the Category ID field.
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For an indexed revaluation where there are no changes to the default indices for the selected categories, proceed to the Submitting the Revaluation Request in Preview Mode Procedure to submit a revaluation preview. For a professional revaluation, proceed to step 5 to create the revaluation candidates.
To create asset revaluation records, click Create.
A concurrent process is run which creates the records.
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When the process is complete, requery the form as follows:
View - Query by Example - Enter
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Enter search criteria as required.
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Run the query as follows:
View - Query by Example - Run
Selecting Assets for Revaluation
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To view individual assets for the currently selected category, click Assets.
All assets are selected for revaluation by default.
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To reduce the list of selected assets, proceed to step 3. To use all assets in the revaluation, proceed to step 7.
Navigate to the Find Assets window as follows:
View - Find
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Enter search criteria as defined in the Find Assets Window Description.
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To remove an asset from the revaluation process, deselect the Select check box next to the asset details.
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To perform an indexed revaluation on an asset, select the Indexed radio button and proceed to step 11.
Note: If both a professional and an indexed revaluation of an asset are performed in the same month, the professional revaluation may override the indexed revaluation. However, a professional revaluation cannot be overridden by an indexed revaluation.
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To perform a professional revaluation, select the Professional radio button.
The New Cost field is enabled and the Select for Calculation check box is automatically selected.
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In the New Cost field, enter the new asset cost.
Once the new cost is entered, the Reval Rate (%) field displays the cost change as a percentage.
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To view the accounting effect of a revaluation on the assets, click Calculate.
For information on the results displayed, see Results - Revaluation Window Description.
To close the Results - Revaluation window and return to the Revaluation window, click Done.
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Save or save and continue as follows:
File - Save or Save and Proceed
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When the revaluation parameters for the assets are complete, close the Revaluation window and return to the Indexed - Professional Revaluation window, by clicking Done.
Submitting the Revaluation Request in Preview Mode
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To submit the revaluation as a preview, click Preview.
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View Inflation Accounting: Asset Revaluation Preview report generated by the request as follows:
View - Requests
Note: If asset exceptions exist when a revaluation preview has completed, those exceptions are visible in the Revaluation window. The assets with exceptions are not included in the Revaluation Preview report.
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To save the revaluation changes, return to the Indexed-Professional Revaluation window and proceed to the Viewing Exceptions Procedure.
Viewing Exceptions
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Following Preview mode, any assets which Inflation Accounting for Assets cannot revalue are listed as exceptions. To view these assets, click Exceptions.
The table below lists the exception messages generated by the revaluation program.
Exceptions Generated by Revaluation Program Number Exception 1 Period entered is not the last closed period. 2 The Asset has cost adjustments against it. 3 The Asset has pending retirement or reinstatement transactions. 4 New transactions have been processed prior to running revaluation. You can run revaluation in the next period only. 5 You cannot perform multiple indexed revaluations in one period for this asset or you cannot perform an indexed revaluation on an asset professionally revalued in the same period. 6 New asset cost is same as current asset cost. -
To close the window, click Done.
Submitting the Revaluation Request in Run Mode
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To submit the revaluation, click Run.
The concurrent request is submitted.
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View the request as follows:
View - Requests
Find Revaluations Window Description
| Field Name | Type | Features | Description |
|---|---|---|---|
| Book | optional | list of values | book name |
| Revaluation ID | optional | list of values | revaluation identification number |
| Clear | button | clears field currently selected | |
| New | button | opens Indexed - Professional Revaluation window | |
| Find | button | searches for revaluations based on information entered in Book and Revaluation ID fields; opens Indexed - Professional Revaluation window and displays search results |
Indexed - Professional Revaluation Window Description
| Field Name | Type | Features | Description |
|---|---|---|---|
| Status | display only | revaluation process status as follows: New, when revaluation criteria saved; In Process, while preview process running; Previewed, when preview process complete; Error, if preview process fails; Complete, when revaluation process successfully completed; field updated when revaluation requeried | |
| Create Request | display only | automatically generated ID; created when user clicks Create or Preview button | |
| Revaluation ID | display only | unique ID generated for revaluation record | |
| Revaluation Date | display only | last date of current depreciation period for book | |
| Revaluation Request | display only | automatically generated ID; created when user clicks Preview or Run button | |
| Obsolete Revaluation | optional | check box | if selected, revaluation preview is obsoleted and cannot be viewed; if deselected revaluation preview can be viewed; action is irreversible once selected and confirmed. |
| [check box] | optional | check box | if selected, category selected for revaluation; if deselected, category not included in revaluation |
| Category ID | display only | category identification | |
| Description | display only | category description | |
| Deselect | button | deselects all currently selected categories and enables user to select individual categories as required; when categories deselected, button changes to Select All and toggles between Select All and Deselect All to enable user to select or deselect all categories | |
| Assets | button | opens Revaluation window | |
| Preview | button | submits revaluation request in preview mode | |
| Exceptions | button | opens Exceptions window |
Revaluation Window Description
| Field Name | Type | Features | Description |
|---|---|---|---|
| Select for Calculation | conditionally required | check box | if selected, indicates that effect of revaluation on asset can be viewed immediately by clicking Calculate; check box enabled only if Professional radio button selected |
| Allow Prof Update | check box | if selected, indicates that professional revaluation update allowed | |
| Cancel | button | closes Revaluation window without saving changes and returns to Indexed - Professional Revaluation window | |
| Deselect | button | deselects all currently selected categories and enables user to select individual categories as required; when categories deselected, button changes to Select All and toggles between Select All and Deselect All to enable user to select or deselect all categories |
Find Assets Window Description
| Field Name | Type | Features | Description |
|---|---|---|---|
| Asset Number | required | list of values | asset number range to be included in search |
| Clear | button | erases data from all fields | |
| Find | button | searches for assets based on search criteria entered |
Results - Revaluation Window Description
| Field Name | Type | Features | Description |
|---|---|---|---|
| Asset | display only | asset number | |
| Old Cost | display only | asset cost before revaluation | |
| New Cost | display only | asset cost after revaluation | |
| Old Depreciation Amount | display only | accumulated depreciation before revaluation | |
| New Depreciation Amount | display only | accumulated depreciation after revaluation | |
| Old Depreciation Reserve | display only | depreciation reserve before revaluation | |
| New Depreciation Reserve | display only | depreciation reserve after revaluation | |
| Old Backlog | display only | backlog reserve before revaluation | |
| New Backlog | display only | backlog reserve after revaluation | |
| Old General Fund | display only | general fund before revaluation | |
| New General Fund | display only | general fund after revaluation | |
| Old Revaluation Reserve | display only | revaluation reserve amount before revaluation | |
| New Revaluation Reserve | display only | revaluation reserve amount after revaluation | |
| Old Operating Account | display only | operating account before revaluation | |
| New Operating Account | display only | operating account after revaluation |
Exceptions Window Description
| Field Name | Type | Features | Description |
|---|---|---|---|
| Category | display only | asset category | |
| Asset | display only | asset number | |
| Exception | display only | exception message, as listed in the Exceptions Generated by Revaluation Program table |
Running Projections
To run a projections report, perform the following steps.
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Navigate to the Inflation Accounting - Projection window as follows:
IGI Fixed Asset Management, OPSFI - Inflation Accounting - Projection
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In the Book field, select a book type code from the list of values.
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Optionally, in the Category field, select a category from the list of values.
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In the Major Category field, select a major asset category from the list of values.
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In the Minor Category field, select a subsidiary asset category from the list of values.
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To select all categories, click Cancel.
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To close the Category Flexfield window, click OK.
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In the Revaluation Period field, select a revaluation period number from the list of values.
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In the End Period field, select a projection end period from the list of values.
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In the RXi Attribute Set field, select the Projections attribute set to be applied to the report.
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Click Run.
The projections report is submitted as a concurrent request.
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To re-run the completed projections report, click View.
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View the request as follows:
View - Requests
Inflation Accounting - Projection Window Description
| Field Name | Type | Features | Description |
|---|---|---|---|
| Projection ID | display only | projection ID code; generated automatically when the Run button is clicked | |
| Start Period | display only | current open depreciation period; automatically inserted when book name selected | |
| Output Format | optional | list of values | default value is TEXT which prints the report in A4 landscape format; alternatively, select the required output format as follows: CSV for comma-separated values, HTML, or TAB for tab-delimited format |
Projection Report Column Descriptions for Projections Attribute Set
| Column Heading | Description |
|---|---|
| Company | Balancing segment value from Chart of Accounts definitions. |
| Cost Center | Cost center qualifier segment from Chart of Accounts definitions. |
| Major Category | Asset Major Category qualifier segment from the Asset Category Flexfield definition. |
| Minor Category | Asset Minor Category qualifier segment from the Asset Category Flexfield definition. |
| Asset Number | Asset number as defined in Oracle Assets. |
| Asset Desc | Asset description as defined in Oracle Assets. |
| Period | Standard format period, for example, JAN:02-03; runs from start period to end period as selected in the report input parameters. |
| Period Index | Index for specified period. |
| Reval Cost Index | Index for period in which asset cost was last revalued. |
| Cost | Revalued cost of asset. In the projections period prior to the first projection report for cost revaluation, this value will be as per the last user indexed or professional revaluation. |
| Period Deprn | Based on last closed period revalued depreciation and updated by revaluations in the selected revaluation periods. |
| YTD Deprn | Accumulated depreciation figure for the year. If the selected periods run over a year-end, the YTD figure in the column will start again from zero. |
| Comments | Reports if a defined condition is encountered during report processing, for example, if an asset becomes fully reserved or this is a cost revaluation period. |
Note: The following columns are available in the default RXi attribute set in addition to those shown in the Projections attribute set in the Projection Report Column Descriptions for Projections Attribute Set table:
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Concatenated Category
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Concatenated Category Description
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Category ID
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Fiscal Year
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Organization Name
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Revaluation Period Name
Viewing Asset Revaluation Cost History
To use the Inflation Accounting for Assets zoom from Oracle Assets to show the effect of inflation accounting on the record displayed, perform the following steps.
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In Oracle Assets, navigate to the Assets window as follows:
IGI Fixed Asset Management, OPSFI - Inquiry - Financial Information
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Enter search information relevant to the assets required.
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Click Find.
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Select the asset to be viewed.
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Click Books.
For information on the View Financial Information window, see Viewing Assets, Oracle Assets User's Guide.
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Navigate to the Inflation Accounting Inquiry window as follows:
View - Zoom
Note: The Zoom menu option is only available if the current record belongs to an Inflation Accounting for Assets book in the Oracle Assets View Financial Information window.
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View data in the Inflation Accounting Inquiry window as described in the Inflation Accounting Inquiry Window Description table.
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To view the revaluation history of the asset, click Revaluation History.
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View data in the Revaluation History window as described in the Revaluation History Window Description table.
Note: The impact of retirements, partial retirements, and transfers is not reflected in the Revaluation History window.
Inflation Accounting Inquiry Window Description
| Field Name | Type | Features | Description |
|---|---|---|---|
| Asset Number | display only | selected asset number | |
| Date Placed in Service | display only | date asset placed in service | |
| Years | display only | number of years in asset life, in addition to number of months displayed in Months field | |
| Months | display only | number of months in asset life, in addition to number of years displayed in Years field | |
| Latest Cost Revaluation | display only | latest cost revaluation for total accumulated balance of asset | |
| Historic Cost | display only | historic cost of asset | |
| Surplus/Deficit | display only | surplus or deficit amount; calculated by subtracting historic cost from latest cost revaluation | |
| Backlog Depreciation | display only | backlog depreciation amount | |
| Transfer to General Fund | display only | amount transferred to General Fund | |
| Net | display only | net revaluation reserve balance; calculated by subtracting backlog depreciation and amount transferred to General Fund from surplus/deficit amount | |
| Latest Cost Revaluation | display only | latest cost revaluation for total accumulated balance of asset; values appear in the Operating Account fields if the asset has a revaluation below the depreciated historic cost; in a period where a revaluation crosses the depreciated historic cost, values appear in both the Revaluation Reserve and Operating Account fields | |
| Historic Cost | display only | historic cost of asset | |
| Surplus/Deficit | display only | surplus or deficit amount; calculated by subtracting historic cost from latest cost revaluation | |
| Backlog Depreciation | display only | backlog depreciation amount | |
| Net | display only | net revaluation reserve balance; calculated by subtracting backlog depreciation amount from surplus/deficit amount | |
| Historic | display only | historic depreciation for accumulated balance of asset | |
| Expensed Revaluation | display only | expensed revaluation amount | |
| Backlog | display only | backlog depreciation provision | |
| Total Depreciation | display only | total depreciation for total accumulated balance, calculated by adding historic depreciation, expensed revaluation, and backlog depreciation | |
| Net Book Value | display only | net book value, calculated by subtracting total depreciation from latest cost revaluation | |
| Current Open Period | display only | open period for the asset | |
| OK | button | closes Inflation Accounting Inquiry window and displays View Financial Information window |
| Field Name | Type | Features | Description |
|---|---|---|---|
| Latest Cost Revaluation | display only | latest cost revaluation for year-to-date balance of asset | |
| Previous Cost Revaluation | display only | previous cost revaluation for asset | |
| Surplus/Deficit | display only | surplus or deficit amount; calculated by subtracting previous cost from latest cost revaluation | |
| Backlog Depreciation | display only | backlog depreciation amount | |
| Transfer to General Fund | display only | amount transferred to General Fund | |
| Net | display only | net revaluation reserve balance; calculated by subtracting backlog depreciation and amount transferred to General Fund from surplus/deficit amount | |
| Latest Cost Revaluation | display only | latest cost revaluation for year-to-date balance of asset; values appear in the Operating Account fields if the asset has a revaluation below the depreciated historic cost; in a period where a revaluation crosses the depreciated historic cost, values appear in both the Revaluation Reserve and Operating Account fields | |
| Previous Cost Revaluation | display only | previous cost revaluation for asset | |
| Surplus/Deficit | display only | surplus or deficit amount; calculated by subtracting previous cost from latest cost revaluation | |
| Backlog Depreciation | display only | backlog depreciation amount | |
| Net | display only | net revaluation reserve balance; calculated by subtracting backlog depreciation amount from surplus/deficit amount | |
| Historic | display only | historic depreciation for year-to-date balance of asset | |
| Expensed Revaluation | display only | expensed revaluation amount | |
| Backlog | display only | backlog depreciation provision | |
| Total Depreciation | display only | total depreciation for year-to-date balance, calculated by adding historic depreciation, expensed revaluation, and backlog depreciation | |
| Current Open Period | display only | current open period for the asset |
| Field Name | Type | Features | Description |
|---|---|---|---|
| Latest Cost Revaluation | display only | latest cost revaluation for current period balance of asset | |
| Previous Cost Revaluation | display only | previous cost revaluation for asset | |
| Surplus/Deficit | display only | surplus or deficit amount; calculated by subtracting previous cost from latest cost revaluation | |
| Backlog Depreciation | display only | backlog depreciation amount | |
| Transfer to General Fund | display only | amount transferred to General Fund | |
| Net | display only | net revaluation reserve balance; calculated by subtracting backlog depreciation and amount transferred to General Fund from surplus/deficit amount | |
| Latest Cost Revaluation | display only | latest cost revaluation for current period balance of asset; values appear in the Operating Account fields if the asset has a revaluation below the depreciated historic cost; in a period where a revaluation crosses the depreciated historic cost, values appear in both the Revaluation Reserve and Operating Account fields | |
| Previous Cost Revaluation | display only | previous cost revaluation for asset | |
| Surplus/Deficit | display only | surplus or deficit amount; calculated by subtracting previous cost from latest cost revaluation | |
| Backlog Depreciation | display only | backlog depreciation amount | |
| Net | display only | net revaluation reserve balance; calculated by subtracting backlog depreciation amount from surplus/deficit amount | |
| Historic | display only | historic depreciation for the period balance of the asset | |
| Expensed Revaluation | display only | expensed revaluation amount | |
| Backlog | display only | backlog depreciation provision | |
| Total Depreciation | display only | total depreciation for period balance, calculated by adding historic depreciation, expensed revaluation, and backlog depreciation | |
| Latest Closed Period | display only | most recently closed period for the asset |
Revaluation History Window Description
| Field Name | Type | Features | Description |
|---|---|---|---|
| Number | display only | asset number | |
| Description | display only | asset description | |
| Revaluation Type | display only | type of revaluation performed on asset: occasional, reclassification, cost adjustment, prior period addition, or implementation | |
| Revaluation Method | display only | type of revaluation method used: indexed, professional, or implementation | |
| Effective Period | display only | period during which catch-up routine took place on a reclassification or prior period addition | |
| Period Entered | display only | period during which transaction was performed | |
| Previous | display only | revalued cost before transaction took place | |
| New | display only | current revalued cost | |
| OK | button | closes Revaluation History window and displays Inflation Account Inquiry window |