Is there a way to change the depreciation account for adjustments related to prior years? — Cloud Customer Connect
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Is there a way to change the depreciation account for adjustments related to prior years?

As per accounting standards, any catch-up depreciation pertaining to previous periods should be charged directly to Retained Earnings (or Accumulated Surplus for government entities). However, in Oracle, depreciation expense is automatically posted to a single predefined account, even in this scenario. Is there a way to change the depreciation account for adjustments related to prior years?

For example, if they perform an expense adjustment to the cost of an asset in May 2025, but this adjustment actually relates to October 2024, the accounting treatment should follow the relevant accounting standards.

Under standards like IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors), when a cost adjustment of an asset pertains to a prior period, typically due to a correction of an error or misstatement , the adjustment should be posted directly to Retained Earnings (or Accumulated Surplus for public sector entities) as a prior period adjustment, and not through the current period's depreciation expense.

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