Let's Talk About Reclassifications in Fixed Assets
By Cindy A B-Oracle on Jul 29, 2014
There have been some questions raised about asset reclassifications recently, so let's have a brief discussion about the reclass of assets.
What is a reclassification? Simply put, a reclass of an asset is moving the asset from one category to another.
Perhaps the asset was in an incorrect category. Perhaps the accounting for the category has changed and a new category needed to be created and the assets moved from the old category to the new category.
A reclass is performed at an asset level (not at a book level). Therefore, a reclass performed on an asset will move that asset from the original category to the new category simultaneously in each book that the asset exists in. Thus, the reclass of an asset occurs in all books and cannot be performed in only one book. If an asset cannot be reclassified in one book, the asset will not be reclassed in any of the books to which it belongs.
You cannot reclassify fully retired assets.
When you reclass an asset in a period after the period of addition, journal entries are created to transfer the cost and accumulated depreciation to the accounts of the new asset category. The depreciation expense account is also changed to the default depreciation expense account for the new category, but there is not an adjustment for prior period expenses.
Reclassification does not re-default the depreciation rules of the asset to the default rules from the new category. Manual changes would be necessary if the depreciation rules for the asset should also be changed.
You can reclass a group of assets by using the Mass Reclassification process.
Two resources for additional questions about the reclassification of assets and using Mass Reclassification are:
1. Chapter 3 (Asset Maintenance) of the Oracle Assets User Guide
2. Reclassifications of Assets in Oracle Assets (Asset Reclass) (Doc ID 107079.1)