Guidelines for Revaluing Fully Reserved Assets

You can revalue fully reserved assets that depreciate under all depreciation methods, except units of production methods.

Cost Method

When you revalue assets using the Cost method, the revaluation calculation differs depending on whether the assets depreciate under life-based or non-life-based depreciation methods.

Life-Based Depreciation Methods

When you revalue assets depreciating under life-based depreciation methods, Oracle Assets requires a life extension factor to extend the asset life so that the revalued cost can be depreciated over the remaining life.

In some circumstances, you may not want to extend the life of a fully reserved assets. To revalue fully reserved assets without extending the life of the asset:

1. Check the Revalue fully reserved assets option in the Edit Book page.
2. Enter 1 for the life extension factor.
3. When you enter revaluation information on the Create Revaluation page, enter a value type of either Price Index or Percent.

If the assets to be revalued have financial transactions associated with them in the past periods, you can revalue them only with the following value types:

• Percentage and Fair Value

• Amount and Fair Value

In this case, Assets:

• Calculates the revalued cost using either the percentage or amount

• Uses the entered fair value as the revalued net book value

• Calculates the revalued depreciation reserve as the difference between the revalued cost and the revalued net book value

If the assets to be revalued have no financial transactions associated with them in past periods, you can revalue them with any value type.

Value Type	Calculation
Percentage or Amount	Assets: Changes the asset's life Recalculates the depreciation reserve and net book value based on the new life Calculates the revalued cost using the entered amount or percentage and proportionately calculates the net book value Calculates the depreciation reserve as the difference between the revalued cost and the revalued net book value
Fair Value	Assets: Calculates the depreciation reserve and net book value based on the new life Uses the fair value entered as the revalued net book value and proportionately calculates the revalued cost Calculates the depreciation reserve as the difference between the revalued cost and the revalued net book value

Note: If you don't revalue the depreciation reserve balance, then you can revalue fully reserved assets using the value types of Percentage, Amount, or Fair Value. In these cases, both the cost and net book value are increased by the same amount, and the depreciation reserve remains unchanged.

Non-Life-Based Method Assets

You can revalue non-life-based assets using only the following value types:

• Percentage and Fair Value

• Amount and Fair Value

Assets calculates the depreciation reserve as the difference between the revalued cost and the revalued net book value (fair value) provided.

NBV Method

You can revalue fully reserved assets using the Net Book Value (NBV) method using the following value types:

• Amount

• Fair Value

Assets:

• Adjusts depreciation reserve and impairment reserve against the asset cost.

• Calculates the revalued cost as either the net book value plus the amount entered or the fair value