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If you make an expensed adjustment to an asset after you perform a reserve adjustment on it, Oracle Assets recalculates the asset's depreciation using the depreciation limitations created by the reserve adjustment. For assets using the flat-rate method, Oracle Assets recalculates depreciation expense for each year the asset was in service except the year in which you made the reserve adjustment. For that year, depreciation remains the same.

You can review depreciation reserve adjustments to previous fiscal years using the Adjusted Form 4562 - Depreciation and Amortization Report or the Adjusted Form 4626 - AMT Detail or Summary Reports.

See Also

Adjusted Form 4626 - AMT Detail Report

Adjusted Form 4626 - AMT Summary Report

Prerequisites

   Allow Reserve Adjustments for the tax book. See: Defining Depreciation Books

   Add your assets to your tax book using Mass Copy. See: Updating a Tax Book with Assets and Transactions

   Close the fiscal year you want to adjust.

   To adjust tax book depreciation for a single asset:

1. Choose Tax > Tax Workbench from the Navigator window.

2. Find the asset for which you want to adjust the depreciation expense.

3. Choose the Reserve Adjustments button.

4. Enter the tax Book in which you want to make the adjustment.

5. Enter the Fiscal Year for which you want to adjust depreciation.

6. Enter the asset's new depreciation expense for the fiscal year you are adjusting.

Attention: You cannot adjust the depreciation taken in a previous fiscal year for assets using a units of production depreciation method.

Attention: You also cannot adjust the depreciation for assets on which you have performed an amortized cost adjustment since the end of the fiscal year you are adjusting.

7. Save your work to automatically adjust the asset's accumulated depreciation for that year and all subsequent years up to the current fiscal year.

   To adjust tax book depreciation for a group of assets:

Note: Ensure that you have run depreciation to close the previous fiscal year for the tax book you want to adjust, its associated corporate book, and the control tax book.

1. Choose Tax > Mass Depreciation Adjustments from the Navigator window.

2. Enter the Adjusted tax Book for which you want to adjust depreciation. The open period of the book must be the first period of the following fiscal year with no transactions entered.

3. Enter the name of the Control Book that holds the minimum accumulated depreciation control.

Oracle Assets does not adjust the depreciation for each asset in the adjusted book to be less than the depreciation in the control book. The control book must have the same associated corporate book as the adjusted book.

4. Enter the factor by which you want to adjust depreciation above the minimum. Oracle Assets adjusts the previous year's depreciation expense in the adjusted book according to this formula:

Adjusted Depreciation Expense = Minimum Depreciation + Depreciation Adjustment Factor X (Maximum Depreciation - Minimum Depreciation)

5. Choose Preview. You must preview the effects of the adjustment in the Mass Depreciation Adjustment Preview Report before you perform it. If necessary, modify the adjustment definition and run preview again.

6. Find the definition you want to perform using the Mass Transaction Number.

7. Choose Run to perform the adjustment.

8. Review the log file after the request completes.

9. Optionally choose Review to run the review report to show the effects of the adjustment.

See Also

Adjusted Form 4626 - AMT Detail and Summary Reports

Mass Depreciation Adjustment Preview and Review Reports

Handle Tax Audits

Mass Depreciation Adjustment Examples

Journal Entries for Tax Accumulated Depreciation Adjustments