Assets Workbench

Mass Additions Workbench

2.1 Current Cost

The current cost can be positive, zero, or negative. Oracle Assets defaults a
cost of zero for construction-in-process (CIP) assets and you cannot change
it. Oracle Assets automatically updates the cost to the sum of the invoice
line costs after you add invoice lines to a CIP asset using the Mass
Additions process. You can also change the cost of a CIP asset manually by
entering non-invoiced items or transferring invoice lines between assets in
the Source Lines window.
If this is a capitalized leased asset, and you previously calculated the cost to
capitalize for the lease in the Lease Payments window and you have not
override the result of the capitalization test, Oracle Assets automatically
enters the Cost to Capitalize amount in the Current Cost field, and you can
change it.
2.2 Original Cost
Oracle Assets displays the original cost of the asset and updates it if you
make a cost adjustment in the period you added the asset. After the first
period, Oracle Assets does not update the original cost.
2.3 Salvage Value
• The salvage value(The estimated value of an asset at the end of its useful
life.) cannot exceed the asset cost, and you cannot enter a salvage
value for credit (negative cost) assets.
• You can specify a salvage value as a percentage of an asset's acquisition
cost or as an amount.
• The percentage salvage value will be defaulted from the category default
rules if you have defaulted the salvage value percentage at the
category level in the Asset Categories window. The salvage value is
calculated by multiplying the acquisition cost by the default salvage
value percentage.
• If you specify the salvage value as an amount, you simply enter the
amount.
• You can also select Sum of Member Assets if you are using the Group
Depreciation feature.
• You can perform salvage value adjustments if necessary.
• You also can override the default salvage value when adding an asset
during the Detail Additions process.
2.4 Recoverable Cost
The recoverable cost is the portion of the current cost that can be
depreciated. It is the current cost less the salvage value less the Investment
Tax Credit basis reduction amount. If you specify a depreciation cost
ceiling, and if the recoverable cost is greater than that ceiling, Oracle
Assets uses the cost ceiling instead.
Recoverable Cost = Current cost - salvage value
2.5 Accumulated Depreciation
You normally enter zero accumulated depreciation for new capitalized
assets. If you are adding an asset that you have already depreciated, you
can enter the accumulated depreciation as of the last depreciation run date
for this book, or let Oracle Assets calculate it for you. If you enter a value
other than zero, Oracle Assets uses that amount as the accumulated
depreciation as of the last depreciation run date. If you have bonus reserve,
the amount should be added to the accumulated depreciation and is no
long tracked as bonus reserve.
2.6 Net Book Value
The net book value is defined as:
Net Book Value = Current Cost - Total Reserve (Accumulated Depreciation
+ Bonus Reserve)
2.7 Revaluation Reserve
If you are adding an asset, enter the revaluation reserve, if any. You cannot
update the revaluation reserve after the period you added the asset. After
that, Oracle Assets updates the revaluation reserve when you perform
revaluations.
Revaluation Reserve = Existing Revaluation Reserve + Change in Net Book
Value due to current revaluation

Note:
1. You can only enter revaluation amounts if you allow revaluation in the
Book Controls window.
2. Revaluation reserves (or, more precisely, revaluation surplus reserves)
arise when the value of an asset becomes greater than the value at which it
was previously carried on the balance sheet, increasing shareholders funds
.for example,if a building was valued at £900,000 in 2007,and its net book
value at that date was only £700,000,the difference of £200,000 is
revaluation reserve.if the net book value would have been £950,000, there
would be a revaluation deficit of £50,000.
2.8 Revaluation Ceiling
If you try to revalue the asset cost above the ceiling, Oracle Assets uses the
revaluation ceiling instead.
Note: You can only enter revaluation amounts if you allow revaluation in
the Book Controls window.
3.1 Method

The depreciation method you choose determines the way in which Oracle
Assets spreads the cost of the asset over the time it is in use. You specify
default depreciation rules for a category and book in the Asset Categories
window. You can use predefined Calculated, Flat-Rate, Formula, Table or
Units of Production type methods, or define your own in the Methods
window.
Depending on the type of depreciation method you enter in the Books
window, Oracle Assets provides additional fields so you can enter related
depreciation information.
3.2 Limit Amount
Limit the annual depreciation expense that Oracle Assets calculates for an
asset. You can enter a depreciation limit based on an amount or a
percentage of the asset cost.
3.3 Ceiling
Limit the recoverable cost used to calculate annual depreciation expense.
You can enter a ceiling only for assets in tax depreciation books. You can
enter a depreciation ceiling only for assets in books that allow depreciation
ceilings. You enable depreciation ceilings for a book in the Book Controls
window.
3.4 Date in Service
If the current date is in the current open period, the default date placed in
service is the calendar date you enter the asset. If the calendar date is
before the current open period, the default date is the first day of the open
period. If the calendar date is after the current open period, the default
date is the last day of the open period. Accept this date, or enter a different
date placed in service in the current accounting period or any prior period.
You cannot enter a date placed in service before the oldest date placed in
service you specified in the System Controls window.
You can change the date placed in service at any time. If you change the
date placed in service after depreciation has been processed for an asset,
Oracle Assets treats it as a financial adjustment, and the accumulated
depreciation is recalculated accordingly.
The asset category, book, and date placed in service determine which
default depreciation rules Oracle Assets uses. If the asset category you
entered is set up formore than one date placed in service range for this
book, the date placed in service determines which rules to use.
If you enter a date placed in service in a prior period and zero accumulated
depreciation, Oracle Assets automatically calculates catchup depreciation
when you run depreciation, and expenses the catchup depreciation in the
current period.
The date placed in service for CIP assets is for your reference only. Oracle
Assets automatically updates this field to the date you specify when you
capitalize the asset using the Capitalize CIP Assets window.
3.5 Prorate Convention and Prorate Date
Oracle Assets uses the prorate convention to determine how much
depreciation to take in the first and last years of asset life. Oracle Assets
determines the prorate date from the date placed in service and the
prorate convention. It uses this date to determine how much depreciation
to take during the first and last years of asset life.
3.6 Amortization Start Date
When you choose to amortize an adjustment, Oracle Assets uses the
Amortization Start Date to determine the amount of catchup depreciation
to take in the current open period. The remaining depreciation is spread
over the remaining life of the asset.
The amortization start date defaults according to the rules described for
the Date Placed in Service. You can change the default date to another
date in the current period or a previous period.
When adding assets with depreciation reserve, you can choose to amortize
the net book value over the remaining life of the asset. Oracle Assets uses
the Amortization Start Date to spread the remaining recoverable cost over
the remaining
useful life of the asset. This can only be performed in the period of
addition.

Notes : Amortization is the pratice of writtening off the capital expense

especially the expense on intangible assets such as
copyrights, patents, goodwill( that is purchased)etc, over a particular
period of time. It should not be confused with
depreciation as depreciation is with regard to tangible assets only.
However it should be understood that this is a
book entry only & does not involve any cash outflow.It is mainly done for
income tax reduction pratice only.
4.1 Investment Tax Credit
The Investment Tax Credit (ITC) check box displays whether you claimed
an ITC on an asset. You cannot claim an Investment Tax Credit on an asset
unless it is using a life-based depreciation method. Allow ITC for a tax book
in the Book Controls window and the category in the Asset Categories
window. Assign ITC to an asset in a tax book in the Investment Tax Credits
window.
Note: This field appears only when you are setting up a tax book.