Transfer Type - Calculate

When you use the Calculate transfer type, the system will calculate the group reclassification based on the group amortization start date entered. The date in the Group Amortization Start Date field is defaulted to the date placed in service of the member asset. You can update the group amortization start date to any date from the current period date to its date placed in service.

Calculate Prior Period Group Amortization Start Date

When a prior period date is entered as the group amortization start date, the transaction is treated as a backdated group reclassification. This requires calculating the depreciation expense for the prior periods, and making the appropriate adjustments to the source and destination group assets.

When you make a prior period group reclassification, the system subtracts the depreciation expense from the source group asset and adds a depreciation adjustment expense, or catchup expense, to the destination group asset. This ensures that the financial impact of having the member asset in the wrong group has been reversed.

The journal entries created are as follows:

The destination group asset depreciation expense is calculated using the destination group asset depreciation method. The amount is added to the destination group asset accumulated depreciation balance. This type of transfer is treated as a back dated amortized adjustments for both the source and destination group assets.

Example: Transfer Type Calculate - Between Groups

Asset Information

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

Group Asset A Setup

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

Group Asset B Setup

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

Group Reclassification

The table below contains the quarterly cost and calculated amounts for Group Asset A.

The table below contains the quarterly cost and calculated amounts for Group Asset B.

Group Asset B

In Q1-2001, depreciation is calculated as follows:

Group A

Periodic Depreciation + Catchup Expense Up to Q3-2000

= [(50,000 - 20,000) * 20% / 4] + [(50,000 - 20,000) * 20% / 4 * 2 - (2,500 + 2,500)] = <2,000>

Group B Periodic Depreciation + Catchup Expense up to Q3-2000

= [(110,000 - 20,000) / 6] + [(110,000 - 20,000) / 6 * 2 - (10,000 + 10,000)] = 25,000

The system creates journal entries in Q1-2001 as follows:

Add a Standalone Asset

When you add a standalone asset into a group asset, the system uses the group asset amortization start date to calculate any required catchup expenses. The catchup expense for a standalone asset is calculated using the depreciation method of the standalone asset. It is deducted from the standalone asset accumulated depreciation balance before it is added to a group asset. The remaining accumulated depreciation balance of the standalone asset is added to the group asset when it becomes a member asset. Also, the cost of the member asset is added to the cost of the group asset.

The catchup depreciation expense is calculated using the group asset depreciation method. The catchup depreciation amount is added to the group asset accumulated depreciation balance in the current period of the transfer. This type of transfer is treated as a backdated amortized adjustment to the group asset.

The table below contains the annual cost and calculated amounts for the group and member assets.

Example: Transfer Type Calculate - Add A Standalone Asset Into A Group Asset

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

Standalone Asset 1 Setup

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

Group Asset B Setup

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

Group Reclassification

The table below contains the quarterly cost and calculated amounts for Asset 1.

Member Asset 1

The table below contains the quarterly cost and calculated amounts for Group Asset B.

Group Asset B

In Q1-2001, Group Reclassification is calculated as follows:

Asset 1 Catch Up Expense = -20,000 * 20% / 4 = <1,000>

Asset 1 Accumulated Depreciation Transferred to Group B = 2,000 - 1,000 = 1,000

Group B Depreciation = Periodic Depreciation + Catchup Expense for Q4-2000 = [(100,000 - 30,000 - 1,000) / 5] + [(100,000 - 30,000 - 1,000) / 5 - 10,000] = 18,000

The system creates journal entries in Q1-2001 as follows:

If Asset 1 and Group Asset B have different balancing segment values, and you enabled allow intercompany member asset assignments, Oracle Assets creates intercompany balancing journal entries for Q1-2001 as follows:

Transfer a Member Asset out of a Group Asset

When you remove the group assignment of a member asset (removing the member asset from the group), the group amortization start date is generally defaulted to the date placed in service of the member asset. However, if the member asset has already performed a group reclassification, the group amortization start date will default to the last group reclassification amortization start date.

You cannot backdate a group reclassification transaction for a member asset before its last group reclassification amortization start date or its last retirement date.

All group reclassifications of member assets are treated as amortized adjustments to the member and the group asset. You cannot perform an expensed adjustment for a standalone asset if it was formerly a member asset, which experienced amortized adjustments while part of a group asset.

Example: Transfer Type Calculate - Remove a Member Asset from Group Asset

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

Group Asset A Setup

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

Member Asset 2 Setup

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

Group Reclassification

The table below contains the quarterly cost and calculated amounts for Group Asset A.

Group Asset A

The table below contains the quarterly cost and calculated amounts for Asset 2.

Asset 2

In Q1-2001, depreciation is calculated as follows:

Group A Depreciation = Periodic Depreciation + Catchup Expense for Q1-2000 = [(20,000 - 5,000) / 6] + [(20,000 - 5,000) / 6 * 2 - (7,500 + 7,500)] = <7,500>

Asset 2 Depreciation = 30,000 / 12 * 3 = 7,500

The system creates journal entries in Q1-2001 as follows:

Calculate - Current Period Group Amortization Start Date

When the group amortization start date is in the current period, the transaction results in a current period transfer of accumulated depreciation. There is no need to adjust depreciation amounts that have already been taken for the member asset or the group asset. The transfer is processed in the current period by removing the calculated accumulated depreciation amount from the source group asset, and adding it to the accumulated depreciation balance of the destination group asset. The journal entries created are as follows:

Source

Destination

Example: Transfer Type Calculate - Between Groups

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

Asset A Setup

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

Asset B Setup

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

Group Reclassification

The table below contains the quarterly cost and calculated amounts for Group Asset A.

Group Asset A

The table below contains the quarterly cost and calculated amounts for Group Asset B.

Group Asset B

In Q1-2001, Group Reclassification is calculated as follows:

Member Asset 1 Accumulated Depreciation Transferred Out = (40,000 - 20,000) * 20% / 4 * 4 = 4,000

Group Asset A Depreciation Expense = New Cost * Annual Depreciation Rate / Periods per Year = (40,000 - 20,000) * 20% / 4 = 1,000

Group Asset B Depreciation Expense = (New Cost - Recalculated Accumulated Depreciation) / Remaining Life = [(80,000 + 20,000) - 4,000 - 40,000] / 4 = 14,000

The system creates journal entries in Q1-2001 as follows:

Group Reclassification:

Periodic Depreciation: