Documente Academic
Documente Profesional
Documente Cultură
Prepared By:
Author: Vaishali Karanth – Oracle Fixed Assets Support
Creation Date: 6-Jun-2015
Last Updated:
Control Number: 1
Version:
Copyright (C) 1995 Oracle Corporation
All Rights Reserved
Product Design and Architecture
Contents
Introduction .................................................................................................................................................... 3
Revaluation of fixed assets is the process of increasing or decreasing their carrying value in case
of major changes in fair market value of the fixed asset. International Financial Reporting
Standards (IFRS) require fixed assets to be initially recorded at cost but they allow two models for
subsequent accounting for fixed assets, namely the cost model and the revaluation model.
Cost Model
In cost model the fixed assets are carried at their historical cost less accumulated depreciation and
accumulated impairment losses. There is no upward adjustment to value due to changing
circumstances.
Example:
ABC. purchased a building worth 200,000 on January 1, 2008. It records the building using the
following journal entry.
Equipment 200,000
Cash 200,000
The building has a useful life of 20 years and the company uses straight line depreciation. Yearly
depreciation is hence 200,000/20 or 10,000. Accumulated depreciation as at December 31, 2010 is
10,000*3 or 30,000 and the carrying amount is 200,000 minus 30,000 which equals 170,000.
We see that the building remains at its historical cost and is periodically depreciated with no
other upward adjustment to value.
Revaluation Model
In revaluation model an asset is initially recorded at cost but subsequently its carrying amount is
increased to account for any appreciation in value. The difference between cost model and
revaluation model is that revaluation model allows both downward and upward adjustment in
value of an asset while cost model allows only downward adjustment due to impairment loss.
Example:
Consider the example of ABC Ltd. as quoted in case of cost model. Assume on December 31, 2010
the company intends to switch to revaluation model and carries out a revaluation exercise which
estimates the fair value of the building to be 190,000 as at December 31, 2010. The carrying
amount at the date is 170,000 and revalued amount is 190,000 so an upward adjustment of 20,000
is required to building account. It is recorded through the following journal entry:
Building 20,000
Revaluation Surplus 20,000
Oracle Assets allows you to periodically adjust the value of your Capitalized assets due to
inflation or deflation, according to rates you enter. This process is known as revaluation.
Oracle Assets multiplies the asset cost by the revaluation rate you enter in the Mass Revaluations
window to determine the adjustment to the Asset cost.
You must set up the following revaluation accounts before you can perform a revaluation:
- Revaluation Reserve & Revaluation Amortization Account for each Asset Category.
- Revaluation Reserve Retired Gain and Loss accounts in the Book Controls window.
Set up Revaluation Reserve Retired Gain & Loss Account at Book control.
Allow revaluation and specify default revaluation rules for a book in the Book Controls window.
Oracle Assets runs the Mass Revaluation Preview Report so you can preview what effect
this revaluation will have when you perform it. If necessary, update the definition and
run the preview report again.
Attention: You must preview the revaluation definition before you perform it.
Enter the asset number you want to revalue instead of a category. If you revalue a single asset in
a category which is also being revalued, the rate you enter for the asset overrides the category
rate.
Tips: Since Oracle Assets does not Mass Copy Revaluations when you perform a revaluation in
your corporate Book; also perform it in each tax book associated with that corporate book.
Revaluation Rules:
• Revalue Accumulated Depreciation = Yes
• Revalue YTD Depreciation = No
• Amortize Revaluation Reserve = No
• Retire Revaluation Reserve = No
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. YTD Accum. Deprn. Reval. Reserve
Expense
Aug-14 1200.00 300.00 300.00 300.00 0
Sep-14 1200.00 300.00 600.00 600.00 0
Reval. 1200+360=1560.00 0 0 600+180=780.00 180.00
30%
Oct-14 1560.00 390.00 990.00 1170.00 180.00
Nov-14 1560.00 390.00 1380.00 1560.00 180.00
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
Monthly Depreciation Expense = Oracle Assets bases the new depreciation expense on the
revalued remaining net book value / Remaining Life i.e = (1560 – 780) / 2 months = 390
YTD Depreciation = Previous YTD depreciation + Oct-14 (current month) Depreciation i.e 600 +
390= 990
Accumulated Depreciation = Existing Accumulated Depreciation + [Existing
Accumulated Depreciation x (Revaluation Rate / 100)] + Depreciation Expense of Oct-14 period=
600 + 600*30%+390=1170
Revaluation Reserve = Existing Revaluation Reserve + Change in Net Book Value. In this Case
there is no existing Revaluation Reserve. So Difference of NBV = (1560-780) - (1200 - 600) = 780 -
600 = 180.00. In this Case, the revaluation reserve amount i.e 180 remains with the asset until the
asset is retired.
Accounting Entry for the Revaluation Transaction is
Revaluation Rules:
• Revalue Accumulated Depreciation = Yes
• Revalue YTD Depreciation = Yes
• Amortize Revaluation Reserve = No
• Retire Revaluation Reserve = No
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. YTD Accum. Deprn. Reval. Reserve
Expense
Aug-14 1200.00 300.00 300.00 300.00 0
Sep-14 1200.00 300.00 600.00 600.00 0
Reval. 1200+360=1560.00 180.00 600+180=780.00 360.00
30%
Oct-14 1560.00 390.00 1170.00 1170.00 360.00
Nov-14 1560.00 390.00 1560.00 1560.00 360.00
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
Depreciation Expense
a) In this case, since we have revalued YTD depreciation also, the effect of YTD revaluation
will be charged as a depreciation Expense i.e 600*30%= 180
b) Monthly depreciation for Oct-14 will be on remaining net book value / Remaining Life i.e
= (1560 – 780) / 2 months = 390
So total Depreciation Expense that will be Charged for Oct-14 will be (a + b) = 180 + 390 = 570
Revaluation Reserve = Change in Cost i.e 1560 - 1200 = 360.00. In this Case, the revaluation
reserve amount i.e 360 remains with the asset until the asset is retired.
Revaluation Rules:
• Revalue Accumulated Depreciation = No
Revalue YTD Depreciation = Yes
• Amortize Revaluation Reserve = No
• Retire Revaluation Reserve = No
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. YTD Accum. Deprn. Reval. Reserve
Expense
Aug-14 1200.00 300.00 300.00 300.00 0
Sep-14 1200.00 300.00 600.00 600.00 0
Reval. 1200+360=1560.00 180.00 1140.00
30%
Oct-14 1560.00 780.00 1560.00 780.00 1140.00
Nov-14 1560.00 780.00 2340.00 1560.00 1140.00
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
Depreciation Expense
a) In this case, since we have revalued YTD depreciation also, the effect of YTD revaluation
will be charged as a depreciation Expense i.e 600*30%= 180
b) Monthly depreciation for Oct-14 will be on Revalued Cost / Remaining Life i.e = 1560 / 2
months = 780
So total Depreciation Expense that will be Charged for Oct-14 will be (a + b) = 180 + 780 = 960
You place an asset in service in Aug-14. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Oct-14 you revalue the asset using a revaluation rate
of 30%.
Revaluation Rules:
• Revalue Accumulated Depreciation = No
Revalue YTD Depreciation = No
• Amortize Revaluation Reserve = No
• Retire Revaluation Reserve = Yes
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. Expense YTD Accum. Deprn. Reval. Reserve
Aug-14 1200.00 300.00 300.00 300.00 0
Sep-14 1200.00 300.00 600.00 600.00 0
Reval. 30% 1200+360=1560.00 0 0 0 960.00
Oct-14 1560.00 780.00 1380.00 780.00 960.00
Nov-14 1560.00 780.00 2160.00 1560.00 960.00
Since we are not amortizing the revaluation reserve, this amount remains in the revaluation
reserve account until you retire the asset. When you retire the asset, Oracle Assets transfers it to
the appropriate revaluation reserve retired account.
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
Monthly Depreciation Expense = Oracle Assets bases the new depreciation expense on the
revalued cost / Remaining Life i.e = 1560 / 2 months = 780
YTD Depreciation = Previous YTD depreciation + Oct-14 (current month) Depreciation i.e 600 +
780= 1380
Accumulated Depreciation = Since we did not revalue the accumulated depreciation, Oracle Assets
transfers the balance to the revaluation reserve. Accumulated depreciation balance at the end of
Oct-14 will be equal to the total depreciation expense amount charged in Oct-14 i.e 780.
You place an asset in service in Aug-14. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Oct-14 you revalue the asset using a revaluation rate
of 30%.
Revaluation Rules:
• Revalue Accumulated Depreciation = No
Revalue YTD Depreciation = No
• Amortize Revaluation Reserve = Yes
• Retire Revaluation Reserve = Yes
The effects of the revaluations are illustrated in the following table:
Since you are amortizing the revaluation reserve, Oracle Assets calculates the revaluation
amortization amount for each period using the asset's depreciation method.
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
Monthly Depreciation Expense = Oracle Assets bases the new depreciation expense on the
revalued cost / Remaining Life i.e = 1560 / 2 months = 780
YTD Depreciation = In this case, we did not revalue YTD depreciation. So YTD depreciation at
the end of Oct-14 (current month) period will be the Previous YTD depreciation + Depreciation
expense amount charged in Oct-14 i.e 600 +780=1380
Accumulated Depreciation = Since we did not revalue the accumulated depreciation, Oracle Assets
transfers the balance to the revaluation reserve. Accumulated depreciation balance at the end of
Oct-14 will be equal to the total depreciation expense amount charged in Oct-14 i.e 780.
Also, since we have amortized the revaluation reserve, system generates the below entry for the
current period Depreciation journal
6.6. Revalue YTD and Accumulated Depreciation and Amortize Revaluation Reserve
You place an asset in service in Aug-14. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Oct-14 you revalue the asset using a revaluation rate
of 30%.
Revaluation Rules:
• Revalue Accumulated Depreciation = Yes
• Revalue YTD Depreciation = Yes
• Amortize Revaluation Reserve = Yes
• Retire Revaluation Reserve = No
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
YTD Depreciation = YTD depreciation at the end of Oct-14 (current month) period will be the
Previous YTD depreciation + Depreciation expense amount charged in Oct-14 i.e 600 +570=1170
Revaluation Reserve = Existing Revaluation Reserve + Change in Cost. In this Case there is no
existing Revaluation Reserve. So Revaluation reserve amount will be equal to change in Cost.
Difference in Cost after Revaluation is = 1560-1200=360
Also, since we have amortized the revaluation reserve, system generates the below entry for the
current period Depreciation journal
Accounting entry Debit Credit
You place an asset in service in Jan-14. The asset cost is $1200.00 and the life is 4 months, and you
are using straight-line depreciation. On May-14 you revalue the asset using a revaluation rate of
30%.
Revaluation Rules:
Revalue Accumulated Depreciation = Yes
Revalue Fully Reserved Assets = Yes
Revalue YTD Depreciation = No
Amortize Revaluation Reserve = No
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. Expense YTD Accum. Deprn. Reval. Reserve
Jan-14 1200.00 300.00 300.00 300.00 0
Feb-14 1200.00 300.00 600.00 600.00 0
Mar-14 1200.00 300.00 900.00 900.00 0
Apr-14 1200.00 300.00 1200.00 1200.00 0
Reval. 30% 1200+360=1560.00 0 624.00 936.00
May-14 1560.00 156.00 1356.00 780.00 936.00
Jun-14 1560.00 156.00 1512.00 936.00 936.00
Jul-14 1560.00 156.00 1668.00 1092.00 936.00
Aug-14 1560.00 156.00 1824.00 1248.00 936.00
Sep-14 1560.00 156.00 1980.00 1404.00 936.00
Oct-14 1560.00 156.00 2136.00 1560.00 936.00
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560. The life extension factor for this asset is 2.5, so the asset's new life is 2.5 * 4
months = 10 months.
Monthly Depreciation Expense = Monthly depreciation for May-14 will be Revalued Cost /
Revised Life i.e = 1560 / 10 months = 156
YTD Depreciation = YTD depreciation at the end of May-14 period will be the Previous YTD
depreciation at the beginning of May-14 + Depreciation expense amount charged in May-14 i.e
1200+156=1356
Accumulated Depreciation = Oracle Assets revalues the accumulated depreciation using the 30%
revaluation rate. The change in net book value is transferred to the revaluation reserve account.
So Existing accumulated depreciation after revaluation is 1200 + (1200*30%)=1560.
Accumulated depreciation amount at the end of May-14 period is = Accumulated depreciation
proportionate to the life which is already completed + May-14 depreciation Amount i.e 1560 /10
months * 4 months = 624 + 156 = 780.
You place an asset in service in Aug-14. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Dec-14 you revalue the asset using a revaluation rate
of 30%.
Revaluation Rules:
Revalue Accumulated Depreciation = No
Revalue YTD Depreciation = No
Amortize Revaluation Reserve = No
Revalue Fully Reserved Asset= Yes
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. Expense YTD Accum. Deprn. Reval. Reserve
Aug-14 1200.00 300.00 300.00 300.00 0.00
Sep-14 1200.00 300.00 600.00 600.00 0.00
Oct-14 1200.00 300.00 900.00 900.00 0.00
Nov-14 1200.00 300.00 1200.00 1200.00 0.00
Reval. 30% 1560.00 0 0 1560.00
Dec-14 1560.00 780.00 1980.00 780.00 1560.00
Jan-15 1560.00 780.00 2760.00 1560.00 1560.00
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560. The life extension factor for this asset is 1.5, so the asset's new life is 1.5 * 4
months = 6 months.
Monthly Depreciation Expense = Monthly depreciation for Dec-14 will be Revalued Cost /
Remaining Life i.e = 1560 / 2 months = 780
YTD Depreciation = YTD depreciation at the end of Dec-14 period will be the Previous YTD
depreciation at the beginning of Dec-14 + Depreciation expense amount charged in Dec-14 i.e
1200+780=1980
Accumulated Depreciation = Since we did not revalue the accumulated depreciation, Oracle Assets
transfers the balance to the revaluation reserve. Accumulated depreciation balance at the end of
Dec-14 will be equal to the total depreciation expense amount charged in Dec-14 i.e 780.
6.9. Revaluation of a Fully Reserved Asset and Amortize the Revaluation Reserve
You place an asset in service in Aug-10. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Dec-10 you revalue the asset using a revaluation rate
of 30%.
Revaluation Rules:
Revalue Accumulated Depreciation = No
Revalue YTD Depreciation = No
Amortize Revaluation Reserve = Yes
Revalue Fully Reserved Asset= Yes
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. Expense YTD Accum. Reval. Reserve Reval Amortize
Deprn.
Aug-10 1200.00 300.00 300.00 300.00 0.00
Sep-10 1200.00 300.00 600.00 600.00 0.00
Oct-10 1560.00 300.00 900.00 900.00 0.00
Nov-10 1560.00 300.00 1200.00 1200.00 0.00
Reval. 30% 1200+360=1560. 0 0 1560.00 1560.00
00
Dec-10 1560.00 780.00 1980.00 780.00 780.00 780.00
Jan-11 1560.00 780.00 2760.00 1560.00 0.00 780.00
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560. The life extension factor for this asset is 1.5, so the asset's new life is 1.5 * 4
months = 6 months.
Monthly Depreciation Expense = Monthly depreciation for Dec-10 will be Revalued Cost /
Remaining Life i.e = 1560 / 2 months = 780
YTD Depreciation = YTD depreciation at the end of Dec-10 period will be the Previous YTD
depreciation at the beginning of Dec-10 + Depreciation expense amount charged in Dec-10 i.e
1200+780=1980
Accumulated Depreciation = Since we did not revalue the accumulated depreciation, Oracle Assets
transfers the balance to the revaluation reserve. Accumulated depreciation balance at the end of
Dec-10 will be equal to the total depreciation expense amount charged in Dec-10 i.e 780.
Also, since we have amortized the revaluation reserve, system generates the below entry for the
current period Depreciation journal
You place an asset in service in Aug-14. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Oct-14 you revalue the asset using a revaluation rate
of 30%.
Revaluation Rules:
• Revalue Accumulated Depreciation = No
• Revalue YTD Depreciation = No
• Amortize Revaluation Reserve = Yes
• Retire Revaluation Reserve = No
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
Depreciation Expense = Monthly depreciation for Oct-14 will be on Revalued Cost / Remaining
Life i.e = 1560 / 2 months = 780
Accumulated Depreciation = In this case accumulated depreciation was not revalued. So the
existing balance of Accumulated depreciation will be transferred to Revaluation reserve. The
Accumulated depreciation balance at the end of Oct-14 will be equal to the Depreciation expense
charged in oct-14 period i.e 780
Revaluation Reserve = Change in Cost + Existing Reserve at the beginning of Oct-14 = (1560-
1200) +600 = 960
Also, since we have amortized the revaluation reserve, system generates the below entry for the
current period Depreciation journal
Now in Nov-14 period, asset was retired with a retirement date of 1st Nov 2014. Then the
accounting entry will be
Since Retire revaluation reserve flag is set to NO, the revaluation reserve will not get reversed
when the asset is retired. The financial inquiry form will still show the Revaluation Reserve
balance
Snap Shot of FA_Deprn_Summary Table after Retirement
You place an asset in service in Aug-14. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Oct-14 you revalue the asset using a revaluation rate
of 30%.
Revaluation Rules:
• Revalue Accumulated Depreciation = No
• Revalue YTD Depreciation = No
• Amortize Revaluation Reserve =Yes
• Retire Revaluation Reserve = No
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
Depreciation Expense = Monthly depreciation for Oct-14 will be on Revalued Cost / Remaining
Life i.e = 1560 / 2 months = 780
Revaluation Reserve = Change in Cost + Existing Reserve at the beginning of Oct-14 = (1560-
1200) +600 = 960
In Nov-14 period, performed the a expense account transfer. When the transfer is performed, the
distribution id 139103 got inactivated and new distribution id 139104 got created.
You place an asset in service in Aug-14. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Oct-14 you revalue the asset using a revaluation rate
of 30%.
Revaluation Rules:
• Revalue Accumulated Depreciation = No
• Revalue YTD Depreciation = No
• Amortize Revaluation Reserve =Yes
• Include Current Period Depreciation= Yes
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. YTD Accum. Deprn. Reval. Reserve Reval
Expense Amortize
Aug-14 1200.00 300.00 300.00 300.00 0
Sep-14 1200.00 300.00 600.00 600.00 0
Reval. 1200+360=1560.00 0 0.00 0.00 1260.00 0
30%
Oct-14 1560.00 300.00 900.00 0.00 1260.00 0.00
Nov-14 1560.00 1560.00 2460.00 1560.00 0.00 1260.00
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
Monthly Depreciation Expense = Since we have set the ‘Include Current Period Depreciation’
option to yes, the monthly depreciation expense for Oct-14 period will be based on the cost before
revaluation i.e 1200. So Oct-14 depreciation amount will be 1200 / 4 = 300
Since Nov-14 period is the last period of the asset life, the whole cost (after Revaluation) will be
charged as depreciation expense in this period i.e 1560.
YTD Depreciation = In this case, we did not revalue YTD depreciation. So YTD depreciation at
the end of Oct-14 (current month) period will be the Previous YTD depreciation + Depreciation
expense amount charged in Oct-14 i.e 600 +300=900
Accumulated Depreciation = Since we did not revalue the accumulated depreciation, Oracle Assets
transfers the balance to the revaluation reserve including the current period i.e Oct-14
depreciation expense . Accumulated depreciation balance at the end of Oct-14 will be equal zero.
Since we have amortized the revaluation reserve, system generates the below entry for the
current period Depreciation journal
You place an asset in service in Aug-14. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Dec-14 you revalue the asset using a revaluation rate
of 30% and life extension factor is set to 1.5 months. So the revised life of the asset will be 6
months now.
Revaluation Rules:
• Revalue Accumulated Depreciation = No
• Revalue YTD Depreciation = No
• Include Current Period Depreciation= Yes
• Revalue Fully reserved Asset = Yes
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560.
The life extension factor for this asset is 1.5, so the asset's new life is 1.5 * 4 months = 6 months.
Monthly Depreciation Expense = Since we have set the ‘Include Current Period Depreciation’
option to yes, the monthly depreciation expense for Dec-14 period will be based on the cost
before revaluation i.e 1200. However since this asset is already fully reserved in Oct-14 period,
there is no life / Netbook value left prior to Revaluation i.e Dec-14. So depreciation amount for
Dec-14 will be 0. However in next period i.e Jan-15 period system will charge the whole revalued
cost as Depreciation expense i.e 1560.
.
YTD Depreciation = In this case, we did not revalue YTD depreciation. So YTD depreciation at
the end of Dec-14 (current month) period will be the Previous YTD depreciation + Depreciation
expense amount charged in Dec-14 i.e 1200 +0=1200
Accumulated Depreciation = Oracle Assets transfers the balance to the revaluation reserve.
Accumulated depreciation balance at the end of Dec-14 will be equal to the total depreciation
expense amount charged in Dec-14 i.e 0. In Jan-15 period the whole revalued cost will be charged
as Depreciation expense i.e 1560. So at the end of Jan-15, the accumulated depreciation will be
1560.
You place an asset in service in Aug-14. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Oct-14 you performed a cost adjustment on the asset
and increased the cost of the asset by 200. So accounting entry for adjustment transaction is
In the same period revalue the asset using a revaluation rate of 30%
Revaluation Rules:
• Revalue Accumulated Depreciation = Yes
• Revalue YTD Depreciation = No
• Include Current Period Depreciation= Yes
• Revalue Fully reserved Asset = No
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. YTD Accum. Deprn. Reval. Reserve
Expense
Aug-14 1200.00 300.00 300.00 300.00 0.00
Sep-14 1200.00 300.00 600.00 600.00 0.00
After Cost 1400.00 100.00 700.00 700.00 0.00
adjustment
Reval. 30% 1400+420=1820.00 0 0.00 0.00 105.00
Oct-14 1820.00 350.00 1050.00 1365.00 105.00
Nov-14 1820.00 455.00 1505.00 1820.00 105.00
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1400 +
(1400*30%)= 1820
Monthly Depreciation Expense = Since we have set the ‘Include Current Period Depreciation’
option to yes, the monthly depreciation expense for Oct-14 period will be based on the cost before
revaluation i.e 1400. So monthly Depreciation for Oct-14 period will be Remaining cost before
revaluation / Remaining Life before revaluation = 1400/4 = 350
Depreciation amount from next month i.e Nov-14 period will be = Revalued cost / Total life =
1820 / 4 = 455.
YTD Depreciation = In this case, we did not revalue YTD depreciation. So YTD depreciation at
the end of Oct-14 (current month) period will be the Previous YTD depreciation + Depreciation
expense amount charged in Oct-14 i.e 700 +350=1050
You place an asset in service in Jun-13. The asset cost is $1200.00 and the life is 4 months, and you
are using straight-line depreciation. On Aug-13, revalue the asset using a revaluation rate of 30%.
Revaluation Rules:
• Revalue Accumulated Depreciation = Yes
• Revalue YTD Depreciation = No
• Include Current Period Depreciation= Yes
• Revalue Fully reserved Asset = No
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. YTD Accum. Deprn. Reval. Reserve
Expense
Jun-13 1200.00 300.00 300.00 300.00 0.00
Jul-13 1200.00 300.00 600.00 600.00 0.00
Reval. 30% 1200+360=1560.00 0 0.00 270.00 90.00
Aug-13 1560.00 300.00 900.00 1170.00 90.00
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
Monthly Depreciation Expense = Since we have set the ‘Include Current Period Depreciation’
option to yes, the monthly depreciation expense for Aug-13 period will be based on the cost
before revaluation i.e 1200. So monthly Depreciation for Aug-13 period will be =cost before
revaluation / Life before revaluation = 1200/4 = 300
YTD Depreciation = In this case, we did not revalue YTD depreciation. So YTD depreciation at
the end of Aug-13 (current month) period will be the Previous YTD depreciation + Depreciation
expense amount charged in Aug-13 i.e 600 +300=900
In the same period, perform a cost adjustment and increase the cost of the asset by 200.
Now, if we go and check the transaction history of the asset, it will just show addition and cost
adjustment transaction.
It is a intended functionality. As per the current functionality when revaluation is done with
"Include current period depreciation flag" checked system calculates and includes current open
period depreciation in revaluation calculations. Any further transaction in same period will
rollback the revaluation internally.
6.16. Adjustment on a asset which has revaluation in the same period and Revaluation is already
accounted
You place an asset in service in Jan-12. The asset cost is $1200.00 and the life is 4 months, and you
are using straight-line depreciation. On Mar-12, revalue the asset using a revaluation rate of 30%.
Revaluation Rules:
Monthly Depreciation Expense = Since we have set the ‘Include Current Period Depreciation’
option to yes, the monthly depreciation expense for Mar-12 period will be based on the cost
before revaluation i.e 1200. So monthly Depreciation for Mar-12 period will be =cost before
revaluation / Life before revaluation = 1200/4 = 300
YTD Depreciation = In this case, we did not revalue YTD depreciation. So YTD depreciation at
the end of Mar-12 (current month) period will be the Previous YTD depreciation + Depreciation
expense amount charged in Mar-12 i.e 600 +300=900
Now Run create accounting program and process the Revaluation event
Now we will perform a cost adjustment transaction on the Asset in the same period.
Now if we see the financial inquiry form, we see two revaluation transactions and the cost of the
asset changed from 1760 to 1400 as system has rolled back the revaluation transaction.
In XLA_EVENTS table we see system generated two Rollback events i.e one to rollback the
current period depreciation and other event to rollback the Revaluation.
6.17. Revaluation of an asset which is already impaired
You place an asset in service in Aug-14. The asset cost is $1200.00 and the life is 4 months, and
you are using straight-line depreciation. On Oct-14, perform a impairment transaction and with
an impairment loss of 200. The accounting entry for Impairment transaction is
In Next period i.e Nov-14 period revalue the asset using a revaluation rate of 30%. Accounting
entry for revaluation transaction is
Revaluation Rules:
• Revalue Accumulated Depreciation = No
• Revalue YTD Depreciation = No
• Include Current Period Depreciation= No
• Revalue Fully reserved Asset = No
The effects of the revaluations are illustrated in the following table:
Period Cost Deprn. YTD Accum. Deprn. Reval. Reserve
Expense
Aug-14 1200.00 300.00 300.00 300.00 0.00
Sep-14 1200.00 300.00 600.00 600.00 0.00
After 1200.00 0.00 0.00 0.00 0.00
impairment
Oct-14 1200.00 300.00 900.00 900.00 0.00
Revaluation 1560.00 0.00 0.00 0.00 1460.00
30%
Nov-14 1560.00 1560.00 2460.00 1560.00 1460.00
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
YTD Depreciation = In this case, we did not revalue YTD depreciation. So YTD depreciation at
the end of Nov-14(current month) period will be the Previous YTD depreciation + Depreciation
expense amount charged in Nov-14 i.e 900 +1560=2460
Accumulated Depreciation = In this case we have not revalued the accumulated depreciation. So
the whole accumulated depreciation amount before revalued will be transferred to Revaluation
reserve. So Accumulated depreciation at the end of Nov-14 will be equal to the depreciation
amount charged in Nov-14 period i.e 1560.
Cost 360.00
Impairment Reserve 200.00
Accumulated depreciation 900.00
Revaluation Reserve 1460.00
You place an asset in service in Aug-14. The asset cost is $1200.00 and the depreciation rate is
20%. On Oct-14, revalue the asset using a revaluation rate of 30%.
Revaluation Rules:
Cost after revaluation = Existing Cost + [Existing Cost x (Revaluation Rate / 100)]= 1200 +
(1200*30%)= 1560
Monthly Depreciation Expense = Monthly Depreciation amount will be Revalued net book value
*Rate /12 i.e (1560-(40+12))*20%/ 12 periods = 25.13
YTD Depreciation = In this case, we did not revalue YTD depreciation. So YTD depreciation at
the end of Oct-14(current month) period will be the Previous YTD depreciation + Depreciation
expense amount charged in Oct-14 i.e 40 +25.13=65.13
Cost 360.00
Accumulated depreciation 12.00
Revaluation Reserve 348.00
Since we have amortized the revaluation reserve, system generates the below entry for the
current period Depreciation journal
b. If the migration is done using Addition API, then the revaluation reserve details needs to
be populated in below arguments under INV_REC_TYPE
REVAL_AMORTIZATION_ BASIS
REVAL_YTD_DEPRN
REVAL_DEPRN_RESERVE
REVAL_AMROTIZATION_BASIS
REVAL_RESERVE
YTD_REVAL_DEPRN_EXPENSE
When the asset is added via asset work bench also, Revaluation reserve details can be populated
in asset work bench
Even for tax books, the data can be populated using fa_tax_interface tables.