Options for Implementing 100% Bonus Depreciation for 2011

Options for Implementing 100% Bonus Depreciation for 2011The following options will be discussed in this document: Create Life of 1 month for STL Depreciation Method to apply to newly purchased assets that qualify for the 100% bonus depreciation Create Life (Multiple 1 month-1 year) for STL Depreciation Method to apply to newly purchased assets that qualify for the 100% bonus depreciation Create bonus rules to apply to newly purchased assets that qualify for the 100% bonus depreciation Use unplanned depreciation to apply to newly purchased assets that qualify for the 100% bonus depreciation Use depreciation overrideCreate Life (1month) for STL Depreciation Method:1. Define the 1 month depreciation methodNavigation: Setups > Depreciation > MethodsEnter STL in Method field Tab to Life – Enter 0 for year and 1 for month SaveNOTE: Since this is a 100% bonus – it does not matter or should not matter what depreciation method is used, therefore we will use the seeded Straight-Line method (STL)2. Create Asset and assign the new STL 1 month depreciation ruleNavigation: Assets > Asset Workbench > QuickAdditions (Button)3. Run Depreciation Navigation: Depreciation > Run DepreciationEnter Book: PBUS TESTPeriod: DefaultsSelect Run (Button)4. View Results Navigation: Assets > Asset Workbench > Query Asset 474049 > Find (Button) > Financial Inquiry 5. View 2011 Results Navigation: Assets > Asset Workbench > Query Asset > Find (Button) > Financial InquiryJanuary 2011NOTE: This option will work regardless of the period the asset was added – you can further automate this by updating the Asset Categories and setting the depreciation default rules to STL 0 YR 1 Month for all applicable asset categories. Create Life (Mutiple 1month – 1 year) for STL Depreciation Method:1. Define the 1 month depreciation methodNavigation: Setups > Depreciation > MethodsEnter STL in Method field Tab to Life – Enter 0 for year and 1 for monthArrow downEnter STL in Method fieldTab to Life – Enter 0 for year and 2 for month Arrow downEnter STL in Method fieldTab to Life – Enter 0 for year and 3 for monthArrow downEnter STL in Method fieldTab to Life – Enter 0 for year and 4 for month Arrow downEnter STL in Method fieldTab to Life – Enter 0 for year and 5 for monthArrow downEnter STL in Method fieldTab to Life – Enter 0 for year and 6 for month Arrow downEnter STL in Method fieldTab to Life – Enter 0 for year and 7 for monthArrow downEnter STL in Method fieldTab to Life – Enter 0 for year and 8 for month Arrow downEnter STL in Method fieldTab to Life – Enter 0 for year and 9 for monthArrow downEnter STL in Method fieldTab to Life – Enter 0 for year and 10 for month Arrow downEnter STL in Method fieldTab to Life – Enter 0 for year and 11 for monthArrow downEnter STL in Method fieldTab to Life – Enter 1 for year and 0 for month SaveNOTE: Since this is a 100% bonus – it does not matter or should not matter what depreciation method is used, therefore we will use the seeded Straight-Line method (STL)2. Assign New Method / Life combinations to the Asset CategoriesNavigation: Setup > Asset System > Asset Categories > Default Rules (Button)End Date OF 31-DEC-2010 Select Green + to insert new recordAdd rules for each month for 2011January 2011Enter To Date: 31-JAN-2011Method: STLLife 1YR 0 Months Select Green + to insert new recordFebruary 2011Enter To Date: 28-FEB-2011Method: STLLife 0 YR 11 Months Select Green + to insert new recordMarch 2011Enter To Date: 31-MAR-2011Method: STLLife 0 YR 10 MonthsSelect Green + to insert new recordApril 2011Enter To Date: 30-APR-2011Method: STLLife 0 YR 9 Months Select Green + to insert new recordMay 2011Enter To Date: 31-MAY-2011Method: STLLife 0 YR 8 Months Select Green + to insert new recordJune 2011Enter To Date: 30-JUN-2011Method: STLLife 0 YR 7 Months Select Green + to insert new recordJuly 2011Enter To Date: 31-JUL-2011Method: STLLife 0 YR 6 MonthsSelect Green + to insert new recordAugust 2011Enter To Date: 31-AUG-2011Method: STLLife 0 YR 5 Months Select Green + to insert new recordSeptember 2011Enter To Date: 30-SEP-2011Method: STLLife 0 YR 4 Months Select Green + to insert new recordOctober 2011Enter To Date: 31-OCT-2011Method: STLLife 0 YR 3 Months Select Green + to insert new recordNovember 2011Enter To Date: 30-NOV-2011Method: STLLife 0 YR 2 MonthsSelect Green + to insert new recordDecember 2011Enter To Date: 31-DEC-2011Method: STLLife 0 YR 1 Months Select Green + to insert new recordJanuary 2012Enter To Date: Method: Standard Fed MethodLife: Standard Life Save3. Create Assets throughout the year or 2011Navigation: Assets > Asset Workbench > QuickAdditions (Button)January 2011 AdditionFebruary 2011 Addition May 2011 AdditionAugust 2011 AdditionDecember 2011 Addition6. Run Depreciation Navigation: Depreciation > Run DepreciationEnter Book: PBUS TESTPeriod: DefaultsSelect Run (Button) 7. View Results Navigation: Assets > Asset Workbench > Query Asset> Find (Button) > Financial InquiryJanuary 2011February 2011May 2011August 2011December 20118. View 2011 Results Navigation: Assets > Asset Workbench > Query Asset > Find (Button) > Financial InquiryJanuary 2011 February 2011May 2011 August 2011 December 2011 Create Bonus Rules:1. Define Bonus RuleNavigation: Setups > Depreciation > Bonus Rules2. Assign Bonus Rule to Asset CategoryNavigation: Setup > Asset System > Asset Categories > Default Rules (Button)Enter Bonus Rule in Bonus Rule field > Save 3. Create Assets throughout the year or 2011Navigation: Assets > Asset Workbench > QuickAdditions (Button)January 2011February 2011 May 2011August 2011 December 20114. Run Depreciation Navigation: Depreciation > Run DepreciationEnter Book: PBUS TESTPeriod: DefaultsSelect Run (Button) 5. View Results Navigation: Assets > Asset Workbench > Query Asset > Find (Button) > Financial InquiryJanuary 2011February 2011May 2011 August 2011December 2011 9. View 2011 Results Navigation: Assets > Asset Workbench > Query Asset > Find (Button) > Financial InquiryJanuary 2011 February 2011May 2011August 2011December 2011 Unplanned Depreciation:1. Create Assets throughout the year or 2011Navigation: Assets > Asset Workbench > QuickAdditions (Button)January 2011Change Method to a NON-Rate Table Method (STL) Prior to savingFebruary 2011 May 20112. Enter Unplanned Depreciation Navigation: Assets > Asset Workbench > Query Asset (Find) > Books > Unplanned Depreciation (Button)January 2011 Select Done (Button) February 2011May 20113. Change Depreciation Method Back to Standard (MACRS HY 5YR) Select Done (Button) 4. Run Depreciation Navigation: Depreciation > Run DepreciationEnter Book: PBUS TESTPeriod: DefaultsSelect Run (Button)5. View Results Navigation: Assets > Asset Workbench > Query Asset > Find (Button) > Financial InquiryJanuary 2011February 2011 May 201110. View 2011 Results Navigation: Assets > Asset Workbench > Query Asset > Find (Button) > Financial InquiryJanuary 2011 February 2011May 2011 Depreciation Override:1. Create Assets throughout the year or 2011Navigation: Assets > Asset Workbench > QuickAdditions (Button)January 20112. Enter Depreciation Override Navigation: Depreciation > OverrideSelect New (Button) Enter required fields3. Run Depreciation Navigation: Depreciation > Run DepreciationEnter Book: PBUS TESTPeriod: Defaults Select Run (Button) 4. View Results Navigation: Assets > Asset Workbench > Query Asset 474053 > Find (Button) > Financial Inquiry5. View 2011 Results Navigation: Assets > Asset Workbench > Query Asset > Find (Button) > Financial InquiryJanuary 2011 Summary of the following options: Create Life of 1 month for STL Depreciation Method to apply to newly purchased assets that qualify for the 100% bonus depreciation o Easy to define. Create 1 Depreciation Method / Life combination STL 0 yr 1 month. Link new method / Life combination to asset categories o Oracle calculates depreciation properly and fully reserve the asset the period added Create Life (Multiple 1 month-1 year) for STL Depreciation Method to apply to newly purchased assets that qualify for the 100% bonus depreciation o More steps to step up. Create multiple Depreciation Method / Life combinations. Link new method / life combinations to asset categories (13 new default rules per asset categories) – may be over kill o Oracle will calculate depreciation properly and fully reserve the asset over the first year added o NOTE: Setups may vary depending upon the prorate convention used – in my example I used a prorate of same month, if I used Following month then the asset added in January would have a life of 11 months instead of 12 months. Create bonus rules to apply to newly purchased assets that qualify for the 100% bonus depreciation o Unable to get this to work Use unplanned depreciation to apply to newly purchased assets that qualify for the 100% bonus depreciation o Test one:. Added Asset with Depreciation Method of STL. Enter Unplanned Depreciation. Change Depreciation Method back to MACRS HY. Run Depreciation . Failed to fully reserve asset o Test two: . Added Asset with Depreciation Method defaulted. Enter Unplanned Depreciation – unable to enter. Change Depreciation Method to STL. Enter Unplanned Depreciation. Run Depreciation. Failed to fully reserve asset o Test three: . Added Asset with Depreciation Method of STL. Enter Unplanned Depreciation. Run Depreciation. Failed to fully reserve asset o Unable to get this to work – however in theory it should work o Needs to be defined for each asset added – might be too much depending upon the volume of assets o Needs to be define prior to running depreciation for the first time on the asset Use depreciation override o Needs to be defined for each asset added – might be too much depending upon the volume of assets o Needs to be define prior to running depreciation for the first time on the asset

Options for Implementing 100% Bonus Depreciation for 2011

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