Depreciation override can override the system-calculated depreciation amount when the calculated amount does not meet business requirements. Override is a way to have a different periodic depreciation charged than what is calculated by the depreciation program. Override amounts are still subject to all standard validations.
One prerequisite to using depreciation override is to set the profile option ‘FA: Enable Depreciation Override’ to Yes.
Depreciation override can be entered in two ways:
Via the depreciation override form.
Via the FA_DEPRN_OVERRIDE table.
Depreciation override works in two different ways:
Used by Depreciation – used to override the system-calculated periodic depreciation amounts.
The steps to perform this override and to see its effects:
Insert a record for the override with the book, asset number, current open period, override amount, used by depreciation, etc. Set the status to POST.
Run depreciation with or without closing the period.
The status will be changed to POSTED from POST. In the Asset Workbench form, the amounts entered for override will override the periodic system-calculated depreciation amount.
For example, the usual system-calculated monthly amount for Apr-16 is 500 for an asset. An override of 800 is entered for Apr-16. The monthly depreciation charged for Apr-16 is 800, visible when querying in the Asset Workbench.
Used by Adjustment – will be processed by performing an adjustment to incorporate the override data. In this case, a transaction type of ADJUSTMENT will be created, much like a depreciation catch-up. But, when depreciation is run for this period, the normal depreciation amount will also be calculated.
The steps to perform this override and to see its effects:
Insert a record for override with the book, asset number, a closed period, override amount, and used by adjustment, with status set to POST.
Perform an asset adjustment such as an increase in the cost of an asset.
After the cost adjustment, you see the line set to POSTED from POST.
Run depreciation with or without closing the period.
For example, if the cost adjustment done in Apr-16 caused a system-calculated catch-up of 3000 and an override is entered with the period of Mar-16 for 2000, the system-calculated monthly depreciation amount for Apr-16, post cost adjustment, would be 500. After the adjustment, the depreciation catch-up booked in Apr-16 would be 4500, i.e. 3000 system-calculated catch-up and 1500 entered via override, as 500 will be charged in periodic depreciation for Apr-16. To get the desired adjustments to the catch-up amounts, periodic depreciation needs to be kept in mind. If the additional catch-up needed is 2000 and the system-calculated catch-up is 500, the deprecation override entered should be 2500.
There are some rules for override to be successfully processed:
Override amounts are not picked up if depreciation is already run for the book. Perform a manual override using an API or perform a transaction like a penny cost adjustment. Re-run depreciation to have it picked up in the depreciation run.
Override amounts are not picked up in the period of retirement.
Backdated retirements overlapping depreciation/bonus override are not allowed.
Depreciation override of zero is not allowed for an MRC/ALC enabled book.
Depreciation override amount has to be less than or equal to the NBV of the asset.
Depreciation override amount should not cause the reserve to exceed the depreciation limit.
There is no API for depreciation override.
Override depreciation is not picked up in the last period of an asset’s life for life-based methods.
Points to keep in mind while working with override records:
If depreciation is run for the period and an override is missed, enter an override and rollback depreciation via API or by performing a penny cost adjustment. Re-run depreciation to pick up override amounts.
Override has been processed and you see the status as POSTED, but it is incorrect and the period is not closed yet. Go back to the override form and set the status POSTED back to POST and correct the amounts. This automatically rolls back depreciation for the asset. Depreciation can now be re-run to get the correct override amounts picked up.
Depreciation run has ended in error due to a validation failure after an override. Delete the line and enter the correct amount. Re-run depreciation to get the correct amounts picked up.
With credit to Anshu Malhotra, Oracle Assets Support
