This document will provide all required knowledge you need to calculate depreciation in Oracle Planning

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Oracle Planning and Budgeting
Calculating & Testing Depreciation
S.No Date Modification Author Verified By
1 2019/08/06 Initial Document Neeraj Soni
2 2019/08/20 Revised Version Neeraj Soni

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Table of Contents
About Capital ........................................................................................................................................3
Capital Asset Planning .....................................................................................................................3
Depreciation and Amortization Assumptions...................................................................................3
What is Straight Line Basis?.................................................................................................................4
Straight Line Depreciation Formula ...............................................................................................4
Straight Line Depreciation in Planning..............................................................................................4
Outline Structure...................................................................................................................................4
Statistical Account Hierarchy ..........................................................................................................4
Depreciation Account Hierarchy.....................................................................................................5
Calculation Script..................................................................................................................................5
Validating Code ....................................................................................................................................6
Step#1: Prepare Blessed Data.........................................................................................................6
Step#2: Prepare Smart View Output..............................................................................................7
Step#3: Prepare Variance Sheet and Validate Numbers. ............................................................7

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About Capital
Capital Asset Planning: Organizations pay significant attention capital expense
planning due to sizable investment and inherent risk that accompanies acquiring new
equipment and technology. Capital helps decision-makers and front-line managers
communicate throughout the request, justification, review, and approval process.
This CAPEX consists of
➢ Assembling the line-item details and funding requirements of individual
projects and arranging them in a Smart View or DataForms.
➢ Perform driver-based calculations to assess the impact of changes and
additions on profit, cash flow, and funding.
➢ Request and approve capital expense plans
➢ Administering the analysis and approval operation.
Depreciation and Amortization Assumptions
Capital Expense Planning module provides user ability to select various CapEx setting based
on which depreciation calculation take place. As given in the below snap short, Under
Existing Assets, Assumptions section. The below are the list of accounts, their useful life and
residual value. All the below assets detail tagged as below.
Asset Name Useful Life Depreciation Method Residual Value
Building & Improvements 10 Years Straight Line 0
Machinery & Equipment 5 Years Straight Line 0
Furniture 3 Years Straight Line 0
Vehicles 4 Years Straight Line 0
Computers & Software 3 Years Straight Line 0
Intangible Assets 5 Years Straight Line 0

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What is Straight Line Basis?
Straight line basis is a method of calculating depreciation and amortization. Also known as
straight line depreciation, it is the simplest way to work out the loss of value of an asset over
time. This depreciation method is appropriate where economic benefits from an asset are
expected to be realized evenly over its useful life.
Straight Line Depreciation Formula
Corresponding Entries in books
Straight Line Depreciation in Planning
Planning uses @SLN function to calculate straight line depreciation.
Calculates the periodic amount that an asset in the current period may be depreciated,
calculated across a range of periods. The depreciation method used is straight-line
depreciation:
cost - salvage value / life
Syntax
@SLN (costMbr, salvageMbrConst, lifeMbrConst [, XrangeList])
The outline structure should consists of statistical account where
Outline Structure.
Statistical Account Hierarchy

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Depreciation Account Hierarchy
Calculation Script
SET AGGMISSG ON;
/* End Template:SET commands*/
FIX ("FY13","Plan","Working")
FIX ("000","P_000")
"12460032" = @SLN("CapEx: Building and Improvements",0,120,"Jan":"Dec");
"12460033" = @SLN("CapEx: Machinery & Equipment",0,60,"Jan":"Dec");
"12460034" = @SLN("CapEx: Furniture",0,36,"Jan":"Dec");
"12460035" = @SLN("CapEx: Vehicles",0,48,"Jan":"Dec");
"12460036" = @SLN("CapEx: Computers & Software",0,36,"Jan":"Dec");
"12460037" = @SLN("CapEx: Intangible Assets",0,60,"Jan":"Dec");
"12460030";
"Capital Expenditures"; ENDFIX
ENDFIX
ENDFIX
Here comes the most complicated task, validating numbers and make sure the output is
same as expected by business users. We use highly proven methodology in order to ensure
the calculated numbers are correct.

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Validating Code
Step#1: Prepare Blessed Data
Prepare blessed data sheet in Excel(Expected output), as given in below screen shot. We
asked business team to provide expected output. The team use Excel SLN function.
The Excel SLN function returns the depreciation of an asset for one period, calculated with a
straight-line method. The calculated depreciation is based on initial asset cost, salvage value,
and the number of periods over which the asset is depreciated.
Syntax
=SLN (cost, salvage, life)

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Step#2: Prepare Smart View Output
Step#3: Prepare Variance Sheet and Validate Numbers.
The variance sheet calculates the difference between expected output and output generated
by Planning Business Rule. If variance is zero, it implies we are getting expected output.