Overview of Annuity Depreciation Methods

Configure and assign an annuity depreciation method to fixed assets using a formula-based depreciation method. Oracle Assets calculates depreciation expense and interest expense for the interest lost on the opportunity cost of capital.

The annuity depreciation method amortizes the cost of a fixed asset over its useful life and calculates the amount of interest lost on the capital expenditure. In every period, Assets calculates both the depreciation expense and interest expense.

You can change the depreciation method, life, interest rate, or all at any time after you add an asset. These changes are either expensed or amortized.

• Amortized changes are effective from the amortization date you provide.
• Expensed changes are effective from the date placed in service by default.

If this change is effective from a past period, Oracle Assets calculates the catch-up depreciation to adjust the depreciation expense and annuity interest for the past periods. The net adjustment for the past periods is accounted for as part of the adjustment transaction.

You can enable this feature for select asset books that require fixed assets to depreciate under an annuity depreciation method.

Use the Opt In UI to enable this feature.