1. Implementing Assets
  2. Validate Capitalization Threshold Results

Validate Capitalization Threshold Results

If you use capitalization thresholds, you need to validate the thresholds after you add assets.

Here's how:

  1. Add assets using the Mass Additions File-Based Data Import template or from Payables.

  2. Navigate to Assets -> Additions Infotile -> Actions -> Prepare Additions Automatically.

  3. Run the Prepare Asset Transaction Data process. This process determines whether to expense or capitalize assets, based on the specified threshold values.

  4. After the Prepare Asset Transaction Data process completes, view the validation results in the Edit Source Line page.

Best Practices for Working with Threshold Validation Results

After you run the Prepare Asset Transaction Data process, check the validation results and make any necessary updates.

  • Note whether the Evaluation check box is enabled:

    • Enabled: validation is complete

    • Not enabled: no validation was done for that line

  • You can continue to make changes to a source line after threshold validation, but the threshold validation can't be done again.

  • If the threshold validation process identifies an asset addition line as a low value asset, it automatically enables the Low value asset check box in the Financial Details tab in the Edit Source Line page. The process also enters the depreciation method and prorate convention specified for low value assets in the category default rules.

    You can update the check box, depreciation method, and prorate convention, but the threshold validation can't be done again for this line.

  • If you perform a cost adjustment immediately after you add an asset, the cost of the asset may be greater than or less than the capitalization threshold. Oracle Assets doesn't automatically change an asset to a low value asset or change a low value asset to a non-low value asset. You decide whether to change it to a non-low value asset or to continue to treat it as a low value asset.

  • To change an asset to a non-low value asset, perform an adjustment transaction to disable the Low value check box and change the depreciation method. This change is treated as a normal depreciation method change and depreciation is recalculated.

  • For a tax book, the Mass Copy process evaluates the capitalization and low value thresholds. The process copies the transaction from the corporate book to the tax book, regardless of whether the asset type is the same in the corporate and tax books.