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Depreciation for Asset costing Below 5000 in India

Discussion in 'Oracle Financials' started by sandipghosh01, Sep 2, 2011.

  1. sandipghosh01

    sandipghosh01 Active Member

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    In Oracle ERP, Asset costing below Rs 5000 should be depreciated in that Financial Year irrespective of the date of addition.. i.e. 100% depreciation to be charged in that Year for the Asset.
    Requirement is it should depreciate in that Fin Year. E.g If asset is added in Feb- it should fully depreciate in Feb and march. If added in Oct - it should fully depreciate from Oct to March of that Financial Year
    Prorate Convention is daily.

    Please anyone let me how the depreciation method to be defined for this?
  2. apps_expert

    apps_expert Forum Expert

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    Chennai, India

    The way we did it in one of our implementations was that we added life of Asset for 1 month. So since the asset can not be depreciated in the month it is added, it will be depreciated fully in two months.


    An asset is added on 15th Jan then:

    1. First month depreciation will be from 15th to 31st Jan

    2 Second Month Depreciation will be from 1st Feb to 14th Feb

    At this point the asset will be fully depreciated.

    Now the problem comes when the asset is added in last month of year i.e. in March then depreciation will be split over to NEXT YEAR and asset will not be fully depreciated in the same year. So to add an asset and depreciate fully in the same month we used the SAME MONTH Prorate convention (Prorate date as 1st of the Month) instead of SAME DAY Prorate convention along with the STL dep. method.

    So if an asset is added on 15th Jan, then the system will calculate full deprecation for the first month if the life of the asset is given as 1 month.

    Hope this helps...
  3. leaderinu

    leaderinu Active Member

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    We could use Unplanned Depreciation feature for those Assets valuing 5000 or below to Depreciate Fully.