How Depreciation Is Calculated
Run the Calculate Depreciation process to calculate depreciation for all assets in a book for a period. If depreciation isn't calculated successfully for any assets, review the log file to determine the reason that depreciation failed.
When you run depreciation, you can either:
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Close the current period automatically after running depreciation. If all of your assets depreciate successfully, Assets closes the period and opens the next period.
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Keep the period remains open after running depreciation.
Settings That Affect Depreciation Calculation
Depreciation calculation is affected by the following:
Setting |
Description |
---|---|
Prorate date |
Oracle Assets:
Your reporting authority's depreciation regulations determine the amount of depreciation to take in the asset's first year of life. For example:
|
Calculation basis |
Assets calculates depreciation using either the recoverable cost or the recoverable net book value as a basis:
|
Prorate period |
Assets uses the prorate date to choose a prorate period from the prorate calendar.
|
Depreciation rate |
|
How Depreciation Is Calculated
Calculated and table-based methods calculate annual depreciation by multiplying the depreciation rate by the recoverable cost or net book value as of the beginning of the fiscal year.
Flat-rate methods calculate annual depreciation as the depreciation rate multiplied by the recoverable cost or net book value, multiplied by the fraction of the year that the asset was held.
After calculating the annual depreciation amount, Assets uses the depreciation calendar and the options chosen for dividing depreciation and depreciating when an asset is placed in service to determine how much of the fiscal year depreciation to allocate to the period for which you ran depreciation.
You can choose to allocate depreciation:
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Evenly to each of your accounting periods: Assets divides the annual depreciation by the number of depreciation periods in your fiscal year to get the depreciation per period.
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According to the number of days in each period: Assets divides the annual depreciation by the number of days that the asset depreciates in the fiscal year and multiplies the result by the number of days in the appropriate accounting period.
Assets allocates the periodic depreciation to the assignments to which you assigned the asset, according to the fraction of the asset units that is assigned to each depreciation expense account.