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Unexpected Depreciation Variance After Cost Adjustment (Amortized) Under MONTHLY-25 Convention

in Fixed Assets - EBS (MOSC) 3 commentsAnswered

Hi Experts,

We are experiencing a small but persistent variance in the monthly depreciation calculation after performing an Amortized Cost Adjustment in Oracle Fixed Assets. We would appreciate your insights into the underlying calculation engine logic.

Here are the details of the asset and the transaction:

1. Asset Information

  • Asset Number: HV.PTVT.TC02.22
  • Depreciation Method: STL (Straight Line)
  • Life: 8 years (96 months)
  • Date in Service: 01-JUN-2021
  • Prorate Convention: MONTHLY-25
  • Original Cost: 306,600,000
  • Current Cost: 311,649,000
  • Cost Adjustment: 5,049,000
  • Amortize Adjustment: Enabled
  • Amortization Start Date: 30-APR-2026
  • Remaining Life shown by system: 3 years 2 months (38 months)

2. Our Understanding / Manual Calculation

Based on our understanding of the Oracle Assets User Guide, when an Amortize Adjustment is performed, the cost change should be spread evenly over the remaining useful life. Our manual calculation is as follows:

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