Category information is common for a group of assets. Oracle Assets defaults these depreciation rules when you add an asset, to help you add assets quickly. If the default does not apply, you can override many of the defaults for an individual asset in the Asset Details or Books windows. You set up default values for each category in each book. The default depreciation rules that you set up for a category also depend upon the date placed in service ranges you specify.
❑ Set up your Account segment values and combinations.
❑ Set up your depreciation books.
❑ Set up your QuickCode values.
❑ Set up your prorate conventions.
❑ Set up your depreciation methods.
To set up an asset category:
1. Open the Asset Categories window.
2. Enter a Category name and Description to identify the asset category you want to set up.
Suggestion: The concatenated name you enter appears in fields which display 20 spaces. You may want to limit your name to 20 characters.
3. Check Enabled if you want to use this category.
4. Check Capitalize if you want to charge items in this category to an asset account when you pay for them and if you want to depreciate items in this category.
5. Check In Physical Inventory if you want assets in this category to be included in physical inventory comparisons.
6. Choose Lease, Leasehold Improvement, or Non–Lease from the Category Type poplist.
You can only enter lease information in the Asset Details window if you assign the asset to a Lease category type.
7. Choose Owned or Leased from the Ownership poplist.
8. Enter the Property Type and Class to which the assets in this category usually belong.
You set up your QuickCode values for Property Type in the QuickCodes window. If you have assets in the United States, enter 1245 for personal property and 1250 for real property.
9. Enter general ledger accounts.
10. Enter default depreciation rules for each depreciation book for which the category is defined.
To enter general ledger accounts for a category:
1. In the Asset Categories window, enter the Book for which you want to set up this asset category.
2. Enter the Asset Cost account for this category and book. Oracle Assets uses this account to reconcile asset costs to your general ledger. Oracle Assets creates journal entries for this account to reflect additions, retirements, capitalizations, cost changes, transfers, revaluations, & reclassifications. (Asset A/C)
3. Enter the Asset Clearing account for this category and book. (Asset A/C)
For manual asset additions and cost adjustments, Oracle Assets uses this account to reconcile your payables system and Oracle Assets.
For mass additions, it uses the complete Account combination that comes over with a mass addition line to reconcile the asset addition or cost adjustment with your payables system.
4. Enter the general ledger Depreciation Expense Segment to which you charge depreciation for assets in this category and book. This is the default value for the account segment of the depreciation expense account in the Assignment window. (Expense A/C)
5. If you have set up bonus rates, enter the Bonus Expense account. If you do not enter a value in this field, it defaults to the Depreciation Expense account. (Expense A/C)
6. Enter the Accumulated Depreciation account for this category and book. This account is the contra–account for the asset cost account for this category. (Asset A/C)
7. If you have set up bonus rates, enter the Bonus Reserve account. If you do not enter a value in this field, it defaults to the Accumulated Depreciation account. (Asset A/C)
8. Enter the Revaluation Reserve account for this category and book. This account is used for the change in net book value due to revaluation, if you revalue accumulated depreciation. (Asset A/C)
9. Enter the Revaluation Amortization account for this category and book. This account is used to amortize the revaluation reserve over the remaining life of the asset after you revalue it, if you amortize revaluation reserve.
10. Enter the CIP Cost account for this category and book. This account is used to reconcile CIP asset costs to your general ledger.
11. Enter the CIP Clearing account for this category and book if you entered a CIP Cost account.
12. Enter default depreciation rules for each depreciation book for which the category is defined.
1. You can set up Oracle Assets to charge bonus depreciation expense to a different account from that of normal depreciation expense. You can also set up Oracle Assets to charge bonus depreciation reserve to a different account from that of the normal accumulated depreciation account.
Additional depreciation deductions allowed by the IRS under certain circumstances and possibly in certain areas.After the devastating effect of the 9/11 attacks,business owners were allowed to take a first-year depreciation deduction of up to 50 percent of the basis of property placed in service between specified dates. This was in contrast to the normal deduction of 3.63 or 2.56 percent for real property, depending on whether it was commercial or residential rental.Again,after the 2005 hurricane season,the IRS allowed the same bonus depreciation for property placed in service in specifically named Gulf Opportunity Zone counties in the affected states. The IRS says:
This special "bonus depreciation" allowance is available to all businesses and applies to most types of tangible personal property and computer software acquired and placed in service in 2008[and 2009]. It allows taxpayers to deduct 50 percent of the cost of qualifying property in addition to the regular depreciation allowance that is normally available.
Unless this special bonus depreciation is extended, it will not be available after December 31, 2009.