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:
- Check the Revalue fully reserved assets option in the Edit Book page.
- Enter 1 for the life extension factor.
- 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:
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Percentage and Fair Value
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Amount and Fair Value
In this case, Assets:
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Calculates the revalued cost using either the percentage or amount
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Uses the entered fair value as the revalued net book value
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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:
|
Fair Value |
Assets:
|
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:
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Percentage and Fair Value
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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:
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Amount
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Fair Value
Assets:
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Adjusts depreciation reserve and impairment reserve against the asset cost.
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Calculates the revalued cost as either the net book value plus the amount entered or the fair value