When assets are acquired as a result of a merger, in the first year during which the assets are acquired, these assets are usually depreciated during a shorter than normal tax year. It is essential that the acquiring company is able to depreciate the acquired assets correctly during the short tax year.
When you add assets in a short tax year, you identify the asset as a short tax year asset. When you add short tax year assets, you must use either the detail additions process or the mass additions process. You cannot use the quick additions process to add short tax year assets.
You can define custom depreciation formulas to help you to properly depreciate newly acquired assets in a short tax year.
Adding a Single Asset in a Short Tax Year
To add an asset to the corporate book in a short tax year:
1. Follow the steps to add an asset using the detail additions process.
2. While in the Books window, check the Short Fiscal Year check box to indicate the current year is a short tax year.
3. Enter the conversion date. This is the date the short tax year asset begins depreciating in Oracle Assets in the acquiring company.
4. Enter the original depreciation start date of the acquired assets. This is the date when the assets began depreciating in the acquired company.
5. Continue adding the asset.
Adding Multiple Assets in a Short Tax Year
1. Add assets using the mass additions process.
Note: In the period you added short tax year assets, we recommend that you run depreciation without closing the period, verify the depreciation amounts, then close the period.
2. Use the mass copy process to copy the asset information into your tax books.
3. Upload depreciation information for tax books to the FA_TAX_INTERFACE table.
4. Run the Upload Short Tax Year Reserves concurrent program to update reserve in your tax book.
Note: You should run this program after running mass copy.
Uploading Tax Book Depreciation Information
When you use the mass copy process to copy asset information into your tax books, no depreciation or depreciation reserve amounts are copied into the tax books. After running mass copy, you use the FA_TAX_INTERFACE table and Upload Short Tax Year Reserves program to update depreciation information for the short tax year assets in your tax books.
You use SQL*Loader to load the FA_TAX_INTERFACE table, using the same procedure you used to load the FA_MASS_ADDITIONS table when you created mass additions.