Depreciation Override allows you to optionally override the depreciation amounts calculated by Oracle Assets. Using this feature, you can manually override the calculated default depreciation amounts for standalone and group assets.

Before running depreciation or performing adjustments, you must provide the necessary information in the Depreciation Override window or the FA_DEPRN_OVERRIDE table, and indicate whether the override data is for depreciation or adjustments. When running depreciation, the system will upload and use the depreciation amounts provided in the interface table.

If you do not use the Depreciation Override window to input the override amounts, you must first populate the FA_DEPRN_OVERRIDE table with the necessary depreciation data. Next, the feature uploads and overrides the system calculated depreciation amounts with the amounts you provided in the override interface table.

Prerequisite

• Set the profile option FA: Enable Depreciation Override to Yes.

  Note: For MRC-enabled books, you do not need to provide the override amounts for the reporting currency books. The system will derive the reporting currency values based on the ratio of asset cost in the reporting currency to asset cost in the ledger currency.

To override the system calculated depreciation amounts using the Depreciation Override window:

1. Navigate to the Depreciation Override window.

2. You can use the Find Assets window to find assets for which you want to change depreciation.

3. If you did not use the Find Assets window, or query, to find the assets records you wish to modify, enter the asset number, book, and period of the asset in the rows of Depreciation Override window.

4. In the Depreciation field, you can enter the override depreciation amount.

5. In the Bonus Depreciation field you can enter the override bonus depreciation amount.

6. In the Use By field, you can select the adjustment type of Depreciation or Adjustment. The default value is Depreciation when creating a new record.

7. The Status field displays the current status of the override record, which may be New, Post, or Posted. If the status is Post or Posted, you cannot update the record, you can only delete the record and reenter the updated record.

8. Select Save from the menu to save your work.

To override the system calculated depreciation amounts using the FA_DEPRN_OVERRIDE table:

1. Define the override data in the FA_DEPRN_OVERRIDE table. In the FA_DEPRN_OVERRIDE table, enter all basic override depreciation information: BOOK_TYPE_CODE, ASSET_ID, PERIOD_NAME, DEPRN_AMOUNT, BONUS_DEPRN_AMOUNT and USED_BY. You can provide depreciation amounts for depreciation expense and bonus expense separately using the columns: DEPRN_AMOUNT and BONUS_DEPRN_AMOUNT. Define either DEPRECIATION or ADJUSTMENT in the USED_BY column depending on your requirement.

   Note: You can assign multiple override data for each asset as long as PERIOD_NAME and USED_BY do not overlap for records with a non-posted status.

2. Optionally run What-If Analysis or Projection to review the estimated depreciation amounts for that period.

3. Run Depreciation or perform adjustments (single asset adjustment and mass change) to incorporate the override data.

4. If the override fails, the system will roll back the depreciation for the asset. You first need to correct the override information in the interface table, then rerun depreciation. For example, if any assets became over-reserved during the overriding process, the override will fail and the system will return an error.

Depreciation Example

The following table contains asset setup information used in this example.

Load the following override data in the FA_DEPRN_OVERRIDE table before running depreciation:

Expected depreciation results for Asset ID 100869 are included in the following table:

For this example:

• System Calculated Depreciation Amount for each period = 25,000

• System Calculated Bonus Depreciation Amount for each period = 25,000

• Qtr2-96 = (override depreciation amount + (system calculated bonus depreciation amount) = 80,000 + 25,000 = 105,000

• Qtr3-96 = (system calculated depreciation amount + (override bonus depreciation amount) = 25,000 + 50,000 = 75,000

• Qtr2-97 = (override depreciation amount + (override bonus depreciation amount) = 100,000 + 0 = 100,000

• Qtr4-98 = (system calculated depreciation amount + (override bonus depreciation amount) = 25,000 = 0 = 25,000

• Qtr3-99 = (system calculated depreciation amount + (override bonus depreciation amount) = 25,000 +20,000 = 45,000

  Note: Currently, Oracle Assets does not support bonus depreciation amounts in the last period of an asset's life (Qtr3-99 in this example). As a default, the depreciation amount for Qtr3-99 is calculated as follows:

  • The system calculated Depreciation Amount for Qtr3-99 = Adjusted Recoverable Cost - Depreciation Reserve = (1,000,000 - 955,000) = 45,000.

  • The system calculated Bonus Depreciation Amount for Qtr3-99 = 0.

Using the override feature, you can define the bonus amount even at the last period of life for the asset, provided ((Depreciation Reserve + Current Period Depreciation Total) = Adjusted Recoverable Cost). If the total of depreciation reserve and current period depreciation is greater than the adjusted recoverable cost, the system will return an error. Next, you need to correct the amount and run depreciation again.

Adjustment Example

The following table contains asset setup information used in this example.

Load the following override data in the FA_DEPRN_OVERRIDE table before performing the adjustment:

Non-Override Example

For this example:

• Expensed Adjustment on Qtr-1-96

• Adjustment Amount from 10,000 to 20,000

• Missed Depreciation = Re-calculated Depreciation Total - Depreciation Reserve = (20,000 * 0.1 / 4 * 3) - 750 = 750

• New Adjusted Cost for 1996 = New Cost - Recalculated Depreciation Reserve for 1995 = 20,000 - (20,000 * 0.1 / 4 * 3) = 20,000 - 1,500 = 18,500

Expected depreciation results for Asset ID 100870 are included in the following table:

Override Example

For this example:

• Enter the override amount as indicated in the following table:

  BOOK_ TYPE_ CODE	ASSET ID	PERIOD NAME	DEPRN_ AMOUNT	BONUS_ DEPRN_ AMOUNT	USED BY
  CORP	100870	Qtr-3-1995	(NULL)	1,000	DEPRECIATION

Scenario:

• Expensed Adjustment on Qtr-1-96

• Adjustment Amount from 10,000 to 20,000

• Missed Depreciation = Re-calculated Depreciation Total - Depreciation Reserve= (20,000 * 0.1 / 4 * 3 + 1,000) - 750 = 1,750

• New Adjusted Cost for 1996 = New Cost - Recalculated Depreciation Reserve for 1995 = 20,000 - (20,000 * 0.1 / 4 * 3 + 1,000) = 20,000 - 2,500 = 17,500

The expected depreciation results for asset ID 100870 are included in the following table:

As above, override effect will appear in the adjusted period, in this case, Qtr-1-96.

For this example:

• Expensed Adjustment on Qtr1-96

• Adjustment Amount: From 10,000 To 20,000

• Missed Depreciation = Re-calculated Depreciation Total - Depreciation Reserve = (20,000*0.1/4*3 + 1,000) - 750 = 2,500 - 750 = 1,750

• New Adjusted Cost for 1996 = New Cost - Recalculated Depreciation Reserve for 1995 = 20,000 - (20,000*0.1/4*3 + 1,000) = 20,000 - 2,500 = 17,500

The expected depreciation results for asset ID 100870 are included in the following table:

In the above example:

• The FA: Annual Rounding profile option is set to always.

• Qtr1-96 = Periodic Depreciation Amount + Missed Depreciation Amount = 438 + 1750 = 2188.

Currently, Oracle Assets does not support bonus depreciation for back-dated amortized adjustments. If you provide override bonus depreciation amounts, and back-dated amortized adjustments are used, the override will fail with an error.