How to make the depreciation to start calculating based on the net book value when useful life is ch
My business user told me that when we are changing the useful life of an asset, the system should not calculate depreciation restropectively for a straight line method. It should start the depreciation calculation of the asset at the point the useful life is change.
For example:-
Asset Cost = $10000
Useful life = 5 years useful life
Date Place in Service 2 years ago
Accumulated depreciation = $4000
When user change the useful life from 5 years to 3 years. The user expect the following depreciation calculation:-
New depreciation = $6000/3 years = $2000/year
However, what oracle is doing is it will calculate the depreciation restropectively and do the catch up as depreciation adjustment though it allows user to amortised the depreciation adjustment but this is not GAAP compliance.