Beruflich Dokumente
Kultur Dokumente
D60115GC10
Edition 1.0
February 2010
D65238
Copyright 2010, Oracle. All rights reserved.
Disclaimer
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Trademark Notice
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owners.
Author
Debjit Nag
Prerequisites
This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations
and written practice sessions reinforce the concepts and skills introduced.
Additional Publications
Read-me files
Oracle Magazine
(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve
1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches
Summary.
Notations:
(N) = Navigator
(M) = Menu
(T) = Tab
(B) = Button
(I) = Icon
(H) = Hyperlink
1. In the navigation frame of the help system window, expand the General Ledger entry.
4. Review the Enter Journals topic that appears in the document frame of the help system
window.
Costing Flow
Oracle Project Costing enables you to track and account for all project costs. You can enter
transactions directly into Oracle Project Costing using expenditure batches, import transactions
from other Oracle Applications, such as Oracle Time & Labor, or import transactions from
external systems.
Costing Flow Example (Labor Cost)
1. Enter or import expenditures - You can enter pre-approved expenditure batches or
import transactions from other Oracle applications or external applications.
2. PRC: Distribute Labor Costs - Calculates the raw and burden cost amounts for labor cost
expenditure items and uses AutoAccounting to determine the default debit account for
each expenditure item.
3. PRC: Generate Cost Accounting Events - Uses AutoAccounting to determine the
default credit account for expenditure items and generates accounting events for
distributed transactions.
4. PRC: Create Accounting - Creates subledger journal entries for eligible accounting
events. You can run the program in either draft or final mode. Optionally, the program
can post journal entries in Oracle General Ledger.
Manage Costs
After you collect costs, you can perform adjustments as needed. You can also use features such
as cross charge, burdening, project allocations, and asset capitalization to further process the
costs. The adjustment functionality in Oracle Project Costing gives you control over your
project costs. You can adjust your project costs online, create accounting for the adjustments,
and provide a historical audit trail of all activities. You can perform a wide variety of
adjustments - including correcting approved expenditures, changing the capitalizable or
billable status of expenditure items, recalculating raw or burdened costs, splitting expenditure
items, and transferring expenditures to another project.
Cross Charge
A cross charge takes place when the expenditure organization of an expenditure item is
different from task owning organization of the task being charged. These organizations are
called the provider and receiver organizations. The organizations can be within the same
operating unit or belong to different operating units. You may perform additional cross charge
processing to pass costs or share revenues between the provider and receiver organizations.
This processing includes creating borrowed and lent accounting entries or generating
intercompany invoices.
Answer: a, d
Answer: b, c
Answer: b
Answer: a
Answer: a
Answer: b
Organization Overrides
You can reassign an employees or an entire organizations costs and revenue to a different
organization for a particular project. When you enter an organization distribution override, the
new organization you enter overrides the expenditure organization Oracle Project Costing uses
in AutoAccounting and in burdening. For AutoAccounting processing, if an organization
distribution override exists, the destination organization of the override is substituted for the
actual expenditure organization. You can enter the following information in the Organization
Overrides window:
Source Organization - Enter the source organization whose costs and revenue you want
to assign to a different organization.
Employee Name/Number - Enter the name and number of the employee for this project
whose costs and revenue you want to assign to a different organization.
Expenditure Category - The expenditure category for the costs you want to assign to a
different organization.
Destination Organization - The new organization to which you want to reassign costs
and revenue.
Project Currency
You define a project currency for each project. This currency can differ from the functional
currency of the operating unit that owns the project. You can select any active currency defined
in Oracle General Ledger.
In a multinational business environment, employees from locations across the world can report
to one operating unit. Therefore, an operating unit can own projects being managed and
implemented from various remote sites. The project managers of these projects need the ability
to report project costs and revenues in the local currencies of the countries where the work is
being performed. To accomplish this, you have the ability to define a project currency that
differs from the functional currency of the operating unit owning the project.
Answer: b
Project Statuses
When you define a status, the Status Controls region contains a list of actions that are allowed
or restricted for each status. To allow charges on a project, you must assign the project a status
with the status control Create New Transactions enabled. To allow users to adjust transaction
on a project, you must assign the project a status with the status control Adjust Transactions
enabled. For additional discussion regarding defining project statuses, see the course titled
R12.x Project Foundation Fundamentals.
Note: The Create New Transactions status control only affects new transactions. It does not
prevent reversals that Oracle Project Costing creates when you adjust transactions. In addition,
it does not prevent you from splitting transactions. For example, if you change the project
status to a status that does not allow new transactions and transfer an existing expenditure item
to another project, then Oracle Project Costing still creates the reversing expenditure item on
the original project and task.
Transaction Dates
Project Transaction Dates
The transaction start date and finish date control which transactions you can charge to the
project. You cannot charge an expenditure item to a project if the expenditure item date falls
outside the project-level transaction dates. You must enter a start date to enter a finish date.
Task Transaction Dates
Task transaction dates must be within the corresponding project dates and within the dates of
the parent task. The transaction start and finish dates control the transactions that can be
charged to the task. You cannot charge an expenditure item to a task if the expenditure item
date falls outside the task dates. Default values for task transaction dates are the project
transaction dates (for top tasks) or the parent tasks transaction dates (for subtasks).
Transaction Controls
Use transaction controls to configure your projects and tasks to allow only charges that you
expect or plan. You can also define which items are billable and non-billable on your contract
projects. For capital projects, you can define which items are capitalizable and non-
capitalizable. This proactive means to control charges to projects enables you to better manage
your projects. You enter transaction controls in the Project Options and Task Options windows.
You must specify either an employee or an expenditure category for each record. You can
specify a non-labor resource for usage expenditure types.
Employee Transaction Controls
Transaction controls that you define for people (employees and contingent workers) do not
apply to transactions that are not associated with people. This includes supplier cost
transactions entered for a supplier not associated with a person, and usage items incurred by an
organization and not a person. If you define transaction controls to list people who can charge
to your project, then Oracle Project Costing allows transactions incurred by those people. It
also allows any supplier cost transactions and usage items incurred by an organization, and any
other transactions that do not require an employee number.
Answer: c
Answer: a
Answer: d
Answer: b
Answer: a
Year-End Processing
When budgeted funds for a fiscal year are not used by the end of the year, many businesses
move the available amounts to the next year. Organizations that operate under budget do not
lose the budgeted amounts. Instead, their spending limits for the next year are increased.
The PRC: Year End Budget Rollover program transfers year-end balances for top-down
integrated project budgets to the next fiscal year. The program performs budget rollover
functions for all selected top-down integrated budgets. The program calculates transfer amount
for each project budget line by subtracting the total actual and commitment balances from the
budgeted amounts. The program then adds the transfer amount for each project budget line to
the budget amount for the first period of the next fiscal year.
When the program PRC: Year End Budget Rollover is complete, you run the program PRC:
Transfer Journal Entries to GL to transfer the encumbrance journal entries to Oracle General
Ledger. When you submit the program PRC: Transfer Journal Entries to GL, you can
optionally choose to have the program post the journal entries. Otherwise, you can manually
post the journal entries in Oracle General Ledger.
Answer: a
Entering Expenditures
Chapter 4 - Page 1
Copyright Oracle, 2010. All rights reserved.
Entering Expenditures
Chapter 4 - Page 2
Entering Expenditures
Entering Expenditures
Chapter 4 - Page 3
Objectives
Entering Expenditures
Chapter 4 - Page 4
Agenda
Entering Expenditures
Chapter 4 - Page 5
Costing Flow: Enter Expenditures
Entering Expenditures
Chapter 4 - Page 6
Expenditures Overview
Expenditures Overview
An expenditure is a group of expenditure items, or transactions, that an employee or an
organization incurs for an expenditure period. You charge expenditures to a project to record
actual work performed or cost incurred. Oracle Project Costing uses these terms for
expenditures:
Expenditure batch
- A user-defined name used to track a batch of pre-approved expenditures, such as
timecards and expense reports.
- You can enter the following classes of pre-approved expenditure batches in Oracle
Project Costing: Timecards, Usages, Miscellaneous Transaction, Inventory, Work in
Process, and Burden Transaction.
Expenditure
- A group of expenditure items incurred by an employee or organization for an
expenditure period.
Expenditure item
- The individual transactions charged to a specific project and task combination.
Entering Expenditures
Chapter 4 - Page 7
Multiple Organization Access Control (MOAC)
Entering Expenditures
Chapter 4 - Page 8
Expenditures Overview
Expenditures Overview
You enter:
Expenditure Item Date - The date on which work is performed or a cost is incurred and
is charged to a project and task.
Project Number - A unit of work that requires resources to produce measurable results. A
project can be broken down into one or more tasks. You can charge costs to a project.
Task Number - A subdivision of project work. You can charge costs to lowest-level
tasks.
Assignment Name - When Oracle Project Resource Management is installed, you can
associate labor and expense report expenditures to scheduled work assignments.
Work Type - A classification of work. You use work types to classify both actual and
scheduled work. You can also use work types to classify work to determine the billability
of expenditure items, classify cross charge amounts into cost, and revenue for cross-
charged work, and assign attributes for utilization reporting. Work types roll up to
resource and organization utilization categories. This field is required when the PA:
Require Work Type Entry for Expenditures profile option has a value of Yes.
Entering Expenditures
Chapter 4 - Page 9
Expenditure Type - A classification of cost that you assign to each expenditure item. You
can choose any expenditure type within the expenditure type class that you select for the
expenditure batch.
Non-Labor Resource and Non-Labor Organization - If the expenditure type class for
the batch is Usages, enter the non-labor resource and its owning organization. This enables
you to track use of company-owned assets.
Currency Fields - You can optionally display and enter the currency fields. You can use
folder tools to display to display currency fields. When your cursor is positioned in the
Expenditure Items regions of the Expenditures window, select Show Field from the Folder
menu and then select the field that you want to display.
Quantity - The quantity of units. The expenditure type determines the unit of measure.
For example, on a timecard, you enter the quantity for professional labor in hours.
Comment - Optionally, enter a free text Comment.
Entering Expenditures
Chapter 4 - Page 10
Currency Fields for Expenditures
Entering Expenditures
Chapter 4 - Page 11
Pre-Approved Batch Expenditure Entry Flow Overview
Entering Expenditures
Chapter 4 - Page 12
Statuses for Pre-Approved Expenditure Batches
Entering Expenditures
Chapter 4 - Page 13
Enter Pre-Approved Batches
Entering Expenditures
Chapter 4 - Page 14
8. Optionally, enter a control total and control count in the Amounts region. Use the
Running Totals and Counts and the Difference columns to verify actual versus entered
totals.
9. Select the Expenditures button to enter the batch. The status of a new batch is always
Working.
10. In the Expenditures window, enter the employee or organization that incurred the cost.
11. Optionally enter the total units of measure in the Control Total field. When you have
entered all the expenditure items, you can compare the Control Total with the Running
Total, to verify your entries.
12. Enter the expenditure items in the Expenditure Items region.
13. When you have completed the expenditure batch, submit the batch for review.
Entering Expenditures
Chapter 4 - Page 15
Submitting an Expenditure Batch
Entering Expenditures
Chapter 4 - Page 16
Reversing an Expenditure Batch
Entering Expenditures
Chapter 4 - Page 17
Correcting Expenditure Batches
Entering Expenditures
Chapter 4 - Page 18
- Optionally check the All Negative Transactions Entered As Unmatched check box if
you want to enter transactions with negative amounts and do not want Oracle Project
Costing to search for corresponding existing transactions.
2. In the Expenditure Items window, select the Reverse Original button.
- Instead of choosing the Reverse Original button, you can enter a negative amount in
the Quantity field. Precede negative amounts with a minus () sign. If the All
Negative Transactions Entered as Unmatched check box is not enabled, then Oracle
Project Costing searches for a matching expenditure item and alerts you if it is unable
to find a match.
3. In the Reverse Expenditure Items window, specify the items that you want to reverse.
4. Select the Reversal button.
- Oracle Project Costing inserts a reversing (negative) expenditure item into the batch.
5. Finish entering the batch and submit the batch as usual.
- Expenditure batches can contain both positive and negative expenditure items.
Entering Expenditures
Chapter 4 - Page 19
Copying an Expenditure Batch
Entering Expenditures
Chapter 4 - Page 20
Reviewing Project Expenditures
Entering Expenditures
Chapter 4 - Page 21
Reviewing Project Expenditures
Entering Expenditures
Chapter 4 - Page 22
Note: This window does not display events. If your project uses event-based or cost-
to-cost revenue accrual or invoice generation, use the Events window to view the
total project revenue and bill amounts.
Select the Item Details button to review the details of this expenditure item. You can
then choose one of the following options:
- Cost Distribution Lines - View individual transactions and the default debit and
credit GL accounts for each expenditure item that Oracle Project Costing derived
using AutoAccounting. You can also view other information about the cost
distribution lines, such as PA and GL period, accounting event generation status,
and the rejection reason if the generation of the accounting event was not
successful. The Cost Distribution Lines window does not display the credit
account for supplier invoice expenditure items interfaced from Oracle Payables.
- Revenue Distribution Lines - View the revenue transactions generated for a
specific expenditure item. The window displays the default revenue account that
Oracle Project Billing derived using AutoAccounting. You can also see the GL
and PA posting period for the revenue, accounting event generation status, and
the rejection reason if the generation of the accounting event was not successful.
- AP Invoice - Drill down to the Invoice Overview window in Oracle Payables. If
the invoice is matched to a purchase order, then you can drill down to the
purchase order from the Invoice Workbench. This option is enabled for
expenditure items whose expenditure type class is either Supplier Invoices or
Expense Reports.
- PO Receipt -- Drill down to the Receipt Transaction Summary window in
Oracle Purchasing. You can also drill down to the related purchase order from
the Receipt Transaction Summary window. This option is enabled for
expenditure items for receipt accrual transactions in Oracle Purchasing.
- Purchase Order Details - Drill down to the purchase order details for
contingent worker labor costs. This option is enabled for expenditure items for
contingent worker labor costs that are associated with a purchase order.
Important: If you define your own detailed accounting rules in Oracle Subledger
Accounting, then Oracle Subledger Accounting overwrites default accounts, or
individual segments of accounts, that Oracle Project Costing derives using
AutoAccounting. In this case, the default accounts displayed on the Cost
Distribution Lines and Revenue Distribution Lines windows may not be the same as
final accounts that Oracle Subledger Accounting transfers to Oracle General Ledger.
To view the final subledger accounting, use the View Accounting option from the
Tools menu.
Entering Expenditures
Chapter 4 - Page 23
Viewing Accounting Lines
Entering Expenditures
Chapter 4 - Page 24
Quiz
Answer: a
Entering Expenditures
Chapter 4 - Page 25
Quiz
Answer: b
Entering Expenditures
Chapter 4 - Page 26
Agenda
Entering Expenditures
Chapter 4 - Page 27
Automatically Reversing Expenditure Batches
Entering Expenditures
Chapter 4 - Page 28
Releasing the Batch
Entering Expenditures
Chapter 4 - Page 29
GL Periods for the Expenditure Items
Entering Expenditures
Chapter 4 - Page 30
Agenda
Entering Expenditures
Chapter 4 - Page 31
Upload Expenditure Batches from Microsoft Excel
Entering Expenditures
Chapter 4 - Page 32
Upload Expenditure Batches from Microsoft Excel
Entering Expenditures
Chapter 4 - Page 33
Upload Contingent Worker Timecards
Entering Expenditures
Chapter 4 - Page 34
Note: When contingent workers are allowed to enter timecards that are not related to a
purchase order, you must ensure that the purchase order is not related to a project. Otherwise,
the cost for the contingent work will be recorded in Oracle Project Costing twice, once as labor
and once as supplier cost.
Entering Contingent Worker Timecards with Oracle Purchasing Integration
1. Enter a project-related purchase order for the contingent worker labor in Oracle
Purchasing. Associate the purchase order and purchase order line to the contingent worker
assignment in Oracle HRMS.
2. Consolidate contingent worker project-related timecards and enter a timecard batch in
Microsoft Excel. Assign a purchase order and purchase order line to each timecard line.
3. Upload the timecards and run the program PRC: Transaction Import to import the
timecards into Oracle Project Costing. An amount check takes place against the purchase
order during import.
4. Process contingent worker timecards in Oracle Project Costing:
a. Run PRC: Distribute Labor Costs. The program retrieves cost rates from purchase
order.
b. Run PRC: Generate Cost Accounting Events (for the process category Labor Cost).
c. Run PRC: Create Accounting (for the process category Labor Cost).
5. Process in Oracle Payables:
a. Supplier submits an invoice.
b. Match supplier invoice to the purchase order to reduce outstanding balances.
c. Process and pay supplier invoice in Oracle Payables.
d. Run PRC: Interface Supplier Costs in Oracle Project Costing to interface any
additional costs, such as non-recoverable tax or invoice price variances.
For information about entering contingent worker in Oracle Time & Labor, see the lesson titled
"Integration with Oracle Time & Labor."
Entering Expenditures
Chapter 4 - Page 35
Quiz
Answer: a
Entering Expenditures
Chapter 4 - Page 36
Agenda
Entering Expenditures
Chapter 4 - Page 37
Expenditure Batch Reports
Entering Expenditures
Chapter 4 - Page 38
Quiz
Answer: b, c
Entering Expenditures
Chapter 4 - Page 39
Agenda
Entering Expenditures
Chapter 4 - Page 40
Costing Flow: Import Transactions
Entering Expenditures
Chapter 4 - Page 41
Overview of Transaction Sources
Entering Expenditures
Chapter 4 - Page 42
Overview of Transaction Import
Entering Expenditures
Chapter 4 - Page 43
Resolving Import Exceptions
Entering Expenditures
Chapter 4 - Page 44
Quiz
Answer: d
Entering Expenditures
Chapter 4 - Page 45
Correcting Rejected Transactions within Oracle Project Costing
Entering Expenditures
Chapter 4 - Page 46
interface table. You must either change the date setup in Oracle Project Costing or change the
date for the expenditure item. You can use the Review Transactions window to change the date
for a rejected expenditure item. Oracle Project Costing picks up the revised date for the
rejected transaction the next time that you run the program PRC: Interface Supplier Costs. To
update the expenditure item date in the Review Transactions window, the Allow Interface
Modifications option must be enabled for the transaction source.
Entering Expenditures
Chapter 4 - Page 47
Summary
Entering Expenditures
Chapter 4 - Page 48
Implementing Expenditures
Chapter 5
Implementing Expenditures
Chapter 5 - Page 1
Copyright Oracle, 2010. All rights reserved.
Implementing Expenditures
Chapter 5 - Page 2
Implementing Expenditures
Implementing Expenditures
Chapter 5 - Page 3
Objectives
Implementing Expenditures
Chapter 5 - Page 4
Expenditures Implementation Steps
Implementing Expenditures
Chapter 5 - Page 5
Agenda
Implementing Expenditures
Chapter 5 - Page 6
Expenditure Categories
Expenditure Categories
Oracle Project Costing uses expenditure categories to group expenditure types for costing. An
expenditure category describes the source of your organizations costs. For example, an
expenditure category with a name such as Labor refers to the cost of labor. You use
expenditure categories when you define organization overrides, for budgeting, and for
transaction controls. In addition, you can use expenditure categories in your AutoAccounting
rules and for reporting.
Use the Expenditure Categories window to define an expenditure category. For each
expenditure category, enter a unique name for the expenditure category and a description.
Implementing Expenditures
Chapter 5 - Page 7
Define Revenue Categories
Implementing Expenditures
Chapter 5 - Page 8
Define Units
Define Units
A unit of measure records quantities or amounts of an expenditure item. You assign a unit to
each expenditure type. For example, to calculate the cost of computer services using the
amount of time a user uses a computer, you can define an expenditure type for computer
services and assign it the unit Hours.
Use the Unit Lookups window to define units.
Implementing Expenditures
Chapter 5 - Page 9
Expenditure Type Classes
Implementing Expenditures
Chapter 5 - Page 10
Miscellaneous Transaction - Miscellaneous Transactions are used to track miscellaneous
project costs. Examples of uses for miscellaneous transactions are:
- Fixed assets depreciation
- Allocations
- Interest charges
Burden Transaction - Burden transactions track burden costs that are calculated in an
external system or calculated by Oracle Project Costing as separate, summarized
transactions. These costs are created as a separate expenditure item that has a burdened
cost amount, but has a quantity and raw cost value of zero. You can adjust burden
transactions that are not system-generated.
Work In Process You use this expenditure type class for Oracle Project Manufacturing
WIP transactions that you interface from Manufacturing to Oracle Project Costing. You
can also use this expenditure type class when you import other manufacturing costs via
Transaction Import or when you enter transactions via pre-approved batch entry.
Inventory - This expenditure type class is used for the following transactions:
- Oracle Project Manufacturing transactions that you import from Manufacturing or
Oracle Inventory.
- Oracle Inventory Issues and Receipts that you import from Oracle Inventory in a
manufacturing or non-manufacturing installation.
- You can also use this expenditure type class when you import other manufacturing
costs via Transaction Import or when you enter transactions via pre-approved batch
entry.
Implementing Expenditures
Chapter 5 - Page 11
Define Expenditure Types
Implementing Expenditures
Chapter 5 - Page 12
combination of Oracle Project Costing and the specified operating unit. For more
information on setting up taxes and the hierarchy of tax options for an application and
operating unit, see the Oracle E-Business Tax User Guide.
Rate Required - If this expenditure type requires a cost rate, then enable the Rate
Required check box. Select the Cost Rate button to navigate to the Expenditure Cost Rates
window, select an operating unit, and then enter a cost rate and its effective dates. If this
expenditure type does not require a cost rate, then do not enable the Rate Required check
box. If you create a non-labor expenditure type without checking the Rate Required check
box, you cannot subsequently require and enter a cost rate for that expenditure type.
Instead, you must disable the expenditure type and create a new one that requires a cost
rate and has a unique name. If you enable the Rate Required check box when you create a
non-labor expenditure type, then you can change the cost rate at any time.
For supplier invoice expenditure types, if you specify that a rate is required, Oracle Project
Costing requires you to enter a quantity in Oracle Payables for invoice distributions using
that expenditure type. When you interface the invoice distribution to Oracle Project
Costing, Oracle Project Costing copies the quantity and amount to the expenditure item
and calculates the rate. If you define a supplier invoice expenditure type with the Rate
Required option disabled, then the quantity of the expenditure item is set to the amount
you enter in Oracle Payables.
Description and Dates - On the Description, Dates tab, enter a description and an
effective from date for the expenditure type. You can optionally enter an effective to date
for the expenditure type.
Expenditure Type Classes - In the Expenditure Type Class region, select the expenditure
type class or classes for this expenditure type.
Attention: After you create and save an expenditure type, you cannot subsequently update the
following attributes for the expenditure type:
Name
Expenditure Category
Revenue Category
Unit of Measure
Rate Required check box
Instead, you must enter an end date for the expenditure type and create a new one that has a
unique name. When you enter an end date for an expenditure type, the end date has no affect
on existing transactions. Oracle Project Costing uses the old expenditure type to report on and
process existing transactions. You cannot use the old expenditure type for new transactions that
have an expenditure item date after the end date.
Implementing Expenditures
Chapter 5 - Page 13
Multiple Expenditure Type Classes Per Expenditure Type
Implementing Expenditures
Chapter 5 - Page 14
Quiz
Answer: b
Implementing Expenditures
Chapter 5 - Page 15
Quiz
Answer: c
Implementing Expenditures
Chapter 5 - Page 16
Agenda
Implementing Expenditures
Chapter 5 - Page 17
Transaction Control Extension
Implementing Expenditures
Chapter 5 - Page 18
Quiz
Answer: a
Implementing Expenditures
Chapter 5 - Page 19
AutoApproval Extension
AutoApproval Extension
Use the AutoApproval Extension to define conditions under which expense reports in Oracle
Internet Expenses or timecards in Oracle Time & Labor are approved automatically. You can
configure this extension to meet your needs. For additional information, see the Oracle
Projects API's, Client Extensions, and Open Interfaces Reference.
Implementing Expenditures
Chapter 5 - Page 20
Agenda
Implementing Expenditures
Chapter 5 - Page 21
Define Transaction Sources
Implementing Expenditures
Chapter 5 - Page 22
Example Predefined Transaction Sources
Implementing Expenditures
Chapter 5 - Page 23
Example Predefined Transaction Sources: Manufacturing and
Inventory
Implementing Expenditures
Chapter 5 - Page 24
- If the option is set to Use AutoAccounting, then Oracle Project Costing uses the
transaction sources with No Accounts to import the transactions with no accounts.
Oracle Project Costing then uses AutoAccounting to derive the default accounts.
- If the option is set to Send Accounts to PA, then Oracle Project Costing uses the
transaction sources with Accounts to import the transactions and the default
accounting from Oracle Project Manufacturing.
Implementing Expenditures
Chapter 5 - Page 25
Quiz
Answer: a
Implementing Expenditures
Chapter 5 - Page 26
Agenda
Implementing Expenditures
Chapter 5 - Page 27
Listings
Listings
Use the following concurrent programs to document expenditure setup information:
IMP: Expenditure Types Definition - Use IMP: Expenditure Types Definition Listing to
review expenditure types. You can print a listing for one or all expenditure categories and
for a specified effective date. If an effective date is specified for the report, then the report
lists only expenditure types that are active as of the date you enter.
IMP: Revenue Categories - Use the IMP: Revenue Categories Listing to review revenue
categories. For each revenue category listed, this report prints all the associated
expenditure types and their corresponding expenditure categories. To limit the report to
only one revenue category, enter the revenue category. Otherwise, leave this field blank.
IMP: Units Definition - Use the IMP: Units Definition Listing to review all units of
measure.
Implementing Expenditures
Chapter 5 - Page 28
Summary
Implementing Expenditures
Chapter 5 - Page 29
Copyright Oracle, 2010. All rights reserved.
Implementing Expenditures
Chapter 5 - Page 30
Performing Cost Processing
Chapter 6
Overview of Costing
Costing includes the following major steps:
1. Enter and approve expenditures through the Oracle Project Costing user interface, or
import transactions. You can use Transaction Import to import unaccounted and
accounted transactions. If you import unaccounted transaction, then you must run the
costing programs for the transactions. If you import accounted transactions, then no
additional processing is needed.
2. Distribute costs and derive default accounting. Cost distribution is the act of calculating
the cost and determining the cost accounting for an expenditure item. Oracle Project
Costing has a set of cost distribution programs that you run, depending upon the type of
expenditure. Some imported expenditures are already cost distributed when you import
them and do not require further cost distribution processing.
3. Generate cost accounting events. The program PRC: Generate Cost Accounting Events
collects cost distribution lines in Oracle Project Costing and uses AutoAccounting to
determine the default liability accounts for raw and burden costs. It also generates cost
accounting events for Oracle Subledger Accounting.
Overview of Costing
4. Create accounting in Oracle Subledger Accounting and transfer the accounting entries to
Oracle General Ledger. You run the concurrent program PRC: Create Accounting in
Oracle Project Costing to create accounting entries for accounting events. Depending on
the parameter values you select, the program performs the following tasks:
- Creates subledger accounting entries for unprocessed accounting events. If you
define your own detailed accounting rules in Oracle Subledger Accounting, then
Oracle Subledger Accounting overwrites default accounts, or individual segments of
accounts, that Oracle Project Costing derives using AutoAccounting.
- Transfers accounting entries to the Oracle General Ledger interface tables. In Oracle
Project Costing, you can optionally run a separate program named PRC: Transfer
Journal Entries to GL to transfer accounting entries to Oracle General Ledger.
- Initiates the journal import program in Oracle General Ledger.
- Initiates posting of journal entries in Oracle General Ledger.
Overview of Costing
In Oracle General Ledger, the Journal Import program takes the summary interface
information stored in the Oracle General Ledger interface tables and automatically creates
journal entries for posting in Oracle General Ledger. Journal Import creates a journal entry
batch for your journal entry records in your ledger and accounting period. For each journal
entry category in a batch, Journal Import creates a journal entry header. For each header in a
journal entry batch, Journal Import creates one or more journal entry lines that correspond to
the journal entry records you transfer from Oracle Subledger Accounting to Oracle General
Ledger.
When you run the program PRC: Create Accounting and you select Yes for the parameter
Transfer to General Ledger, the create accounting program transfers the final accounting from
Oracle Subledger Accounting to Oracle General Ledger and runs the Journal Import program.
When you submit the program PRC: Create Accounting, and you choose to transfer to Oracle
General Ledger, or alternatively when you submit the program PRC: Transfer Journal Entries
to GL, you can optionally set the parameter Post in General Ledger to Yes to enable the
program to automatically post successfully imported journal entries in Oracle General Ledger.
Costing Concepts
Raw Cost - Cost directly attributable to work performed. Examples of raw cost are salaries
and travel expenses.
Burden Cost - Cost of doing business that supports raw cost and cannot be directly
attributed to work performed. Examples of burden cost are fringe benefits, office space,
and general and administrative costs.
Total Burdened Cost - The total cost. It consists of raw cost plus any burden cost.
For additional information, see the lesson titled "Appendix B: Budgetary Controls And Budget
Integration."
Answer: b
Determining Costs
Calculating labor cost:
Raw cost is the result of multiplying hours by a rate.
Burden cost is the result of multiplying raw cost by a burden multiplier.
Burdened cost is the sum of raw cost and burden cost.
For employees and contingent workers, you can maintain labor cost rate schedules by
employee (includes contingent workers) or by job. You also have the option of overriding
labor cost rates for individual employees and contingent workers. In addition, you can
define a unique labor costing algorithm using the Labor Costing Extension.
For contingent worker timecards with Oracle Purchasing integration, when you run the
program PRC: Distribute Labor Costs, Oracle Project Costing uses rates from the related
purchase order to calculate the costs.
Oracle Project Costing determines costs for labor transactions with the following
programs:
- PRC: Distribute Labor Costs
- PRC: Distribute Labor Costs for a Range of Projects
Answer: a, c
Answer: c
Streamline Processes
Streamline processes submit and monitor a series of concurrent programs that must be run
sequentially to complete a function. For example, distributing labor costs, generating cost
accounting events, creating accounting in Oracle Subledger Accounting, and transferring the
costs to Oracle General Ledger requires that you submit several programs. Instead of running
the individual programs one at a time, you can choose to submit the program PRC: Submit
Interface Streamline Processes and select the streamline option DXL: Distribute and Interface
Labor Costs to GL. The streamline process then submits and monitors the progress of each
separate program in sequence until all programs complete. Oracle Project Costing provides
three streamline processes:
PRC: Submit Interface Streamline Processes - Combines programs that send
information from Oracle Project Costing to other Oracle applications.
PRC: Submit Project Streamline Processes - Combines programs that distribute costs,
interface supplier costs, generate revenue, and generate invoices for a single project.
Generally, you submit a project streamline request after you make expenditure or invoice
adjustments.
Answer: a
AutoAccounting
When you implement AutoAccounting, you define the rules governing which general ledger
accounts Oracle Project Costing uses under which circumstances. Oracle Project Costing uses
the rules you define whenever it performs an accounting transaction.
The AutoAccounting feature requires that you allow dynamic insertion of new account
combinations. You must define your Accounting Flexfield structure with the Allow Dynamic
Inserts options enabled.
Note: If you set up your own rules in Oracle Subledger Accounting, then you still set up
AutoAccounting so that Oracle Project Costing can determine valid default accounts. The
AutoAccounting setup enables programs, such as programs that distribute costs and generate
cost accounting events, to determine the default accounts that Oracle Project Costing sends to
Oracle Subledger Accounting. For example, if use total burdened cost accounting and set up
your own rules in Oracle Subledger Accounting, then you also need to define AutoAccounting
for total burdened costs so Oracle Project Costing can minimally determine a default debit and
credit accounts.
AutoAccounting Rules
AutoAccounting rules are formulas (or methods) that you use to derive each segment within
your account structure based on the type of transaction. Each rule can use one of three
intermediate value sources to derive the account segment:
Constant value
- Supply a single valid segment value.
Parameter
- Context-sensitive intermediate value that requires a lookup set.
SQL select statement
- Execute an SQL select statement to retrieve a value; make the rule dependent on
multiple values and conditional statements.
To implement AutoAccounting, you define AutoAccounting rules to generate account
combinations. You then assign a set of rules to each AutoAccounting transaction you want to
use for your company.
Constant Value
Use a constant value when you always supply a particular intermediate value (usually an
Accounting Flexfield segment code). If you specify Constant as the rule intermediate value
source, then enter the value that you want Oracle Project Costing to supply as the intermediate
value.
Parameter Value
When you define an AutoAccounting rule, you can use a predefined parameter as an input
value. Examples of parameters that you can use as context information include the project-
owning organization or the expenditure type of an expenditure item. Oracle Project Costing
predefines the available parameters.
AutoAccounting enables you to use the AutoAccounting parameters as inputs for your
AutoAccounting rules. Not all of the parameters are available for all functions. The Customer
ID and the Customer Name parameters are available for cross charge functions only.
Submit the AutoAccounting Functions Listing for a complete listing of all of the parameters
available for each function.
Lookup Sets
A lookup set is an implementation-defined list that corresponds to the account segments. To
define a lookup set, you specify pairs of values. For each intermediate value, you specify a
corresponding account segment value. One or more related pairs of intermediate values and
segment values form a lookup set. When you define lookup sets, lists of values are not
available.
You need to define a lookup set before you can use it in a rule. However, if you prefer to
define your rules before completing your lookup sets, you can define each lookup sets name
and description and then define the intermediate values and segment values later.
If AutoAccounting does not find a matching intermediate value in the lookup set, then it
provides an error message (Incomplete AutoAccounting Rules) to notify you that it could not
build an Accounting Flexfield combination. You must correct your AutoAccounting setup and
resubmit the program that triggered the AutoAccounting error. If AutoAccounting does not
find a matching segment value in the lookup set, then it provides an error message (Invalid
Accounting Flexfield) to notify you that it could not build a valid Accounting Flexfield
combination. You must correct your AutoAccounting setup and resubmit the program that
triggered the AutoAccounting error.
Assign Rules
Function
For each accounting transaction, you define rules to determine the appropriate account to
charge. Each accounting transaction is identified by an AutoAccounting function.
AutoAccounting functions are components of programs that you submit to generate accounting
entries.
Function Transactions
When you are assigning rules to an AutoAccounting function, you can assign different rules to
different conditions. For example, you can account for indirect projects using one set of rules,
and use two different sets of rules for billable items and non-billable items on contract projects.
Oracle Project Costing provides function transactions for each function which identify
commonly used conditions. You can assign rules to function transactions for each
AutoAccounting function. Complete the following steps to assign AutoAccounting rules to
AutoAccounting functions and function transactions:
Enable each function transaction you want to use.
For each function transaction you enable, specify an AutoAccounting rule for each
segment of your Accounting Flexfield.
Answer: b
Listings
IMP: AutoAccounting Functions - For each function, this report displays all of the
possible parameters that AutoAccounting rules use to derive key flexfield segment values.
The report also shows you all of the transactions related to the AutoAccounting function
and whether each transaction is enabled or disabled.
IMP: AutoAccounting Lookup Sets - For each AutoAccounting lookup, this report
prints each possible intermediate value and its corresponding segment value.
IMP: AutoAccounting Rule Definitions - For each AutoAccounting rule, this report
displays the type of its intermediate source and the corresponding value for that source. If
the intermediate value source is a SQL statement, this report displays the text of that
statement. This listing also includes the segment value source that maps an intermediate
value to the final segment value. If the segment value source is a lookup set, then this
report displays the name of that lookup set.
IMP: AutoAccounting Segment Rule Pairings - For each function, this report displays
each of the functions transactions. It also lists the AutoAccounting rule and key flexfield
segment pairings for each transaction. This report also displays the functions transactions
without paired segments and rules.
Answer: d
Account Generator
The Account Generator uses Oracle Workflow to derive default account code combinations.
Oracle Payables and Oracle Purchasing use the Account Generator to determine the default
account code combinations for purchasing requisitions, purchase orders, supplier invoices, and
expense reports based on the project information entered. You define functions and processes
to derive the Accounting Flexfield combinations. You can optionally customize the Account
Generator for each set of defined ledgers.
Oracle Purchasing
Oracle Purchasing uses item types to generate account numbers for all requisitions and
purchase orders, whether they are project-related or not. Oracle Purchasing provides a set of
default account generator processes for the accounts it needs to build. Oracle Purchasing
provides default account generator processes. To derive the accounts based on project
information, you must change the default processes so that they use the project information.
For more information, see the Oracle Purchasing Users Guide.
Oracle Payables
Answer: a
Answer: b
Answer: a
Post-Accounting Programs
Subledger applications use post-accounting programs to transfer transaction data between
subledgers based on the accounting generated from the transaction data. Oracle Subledger
Accounting uses accounting classes to classify journal entry lines. The post-accounting
programs distinguish journal lines for processing based on the accounting class assigned to
each journal entry line.
Oracle Project Costing provides two post-accounting programs, one for debits and one for
credits, to obtain final accounting information from Oracle Subledger Accounting because the
accounting that Oracle Project Costing creates using AutoAccounting may not be the same as
the final accounting that Oracle Subledger Accounting transfers to Oracle General Ledger.
Oracle Project Costing uses post-accounting programs to determine which journal entry lines
to retrieve from Oracle Subledger Accounting when Oracle Project Costing performs the
following activities:
Groups asset lines on capital projects
Generates audit reports
Audit Reports
The Project Subledger Audit Reports print cost distribution lines related to projects. The
reports enable you to drill down from a GL account balance in the trial balance to the
individual project-related transactions.
AUD: Project Subledger Summary - This report prints a summary of cost distribution
lines by project. The report includes subtotals for GL Account, Project Number,
Manufacturing-Related, and Expenditure Type Class.
AUD: Project Subledger Detail by Project - This report shows cost distribution lines for
a single project by task.
AUD: Project Subledger Detail by Expenditure Type - This report shows project
subledger detail across projects for one expenditure type.
Listings
Use the following concurrent programs to document non-labor resource setup information:
IMP: Expenditure Cost Rates - Use the IMP: Expenditure Cost Rates listing to review
the non-labor expenditure cost rates. You can print a listing for one or all expenditure
categories, one or all expenditure types, or for a specified effective date. If an effective
date is specified for the report, then the report lists only expenditure cost rates that are
active as of the date you enter.
IMP: Non-Labor Resources by Organization - Use the IMP: Non-Labor Resources by
Organization listing to review all non-labor resources associated with a particular
organization, expenditure category, or expenditure type. For each organization listed, this
report displays the organizations non-labor resources and the corresponding expenditure
types and expenditure categories.
Answer: a, c
Answer: b
Answer: a
Answer: b, c
Rate Schedules
You can define rate schedules for both billing and costing. A cost rate schedule maintains
hourly cost rates for employees or jobs. No system attribute exists to distinguish between a bill
rate schedule and a cost rate schedule.
For labor cost rate schedules, specify one of the following schedule types for each rate
schedule you define:
Employee
- Use this type of rate schedule to define standard hourly rates or percentage markups
for billing by employee.
Job
- Use this type of rate schedule to define standard hourly rates by job title. When you
enter a job-based rate schedule, you enter a job group to indicate which jobs are used
to determine rates. When a project uses a job-based bill rate schedule, the job group
on the schedule must match the projects billing job group.
In a multi-organization environment, you can share rate schedules across different operating
units, or have different rates for the same resource in different operating units.
Answer: a
Listings
IMP: Labor Cost Multipliers - Report to review all labor cost multipliers.
IMP: Labor Cost Rates Listing - Report to review all employees and their cost rates, job
level, job discipline, or labor costing rule. For each employee listed, this report displays
the employees active organization and job assignments, the assigned labor costing rule,
and the hourly cost rate.
IMP: Labor Cost Rates Listing by Organization - Report to review all employees and
their cost rates, job level, job discipline, or labor costing rule. This report starts at a
specified organization and reports down the organization hierarchy listing employees and
their labor cost rates. You cannot print a listing for a single organization using this report
unless the organization is at the lowest level of the hierarchy.
IMP: Labor Costing Rules Listing - Report to review labor costing rules.
Overview of Burdening
Burdening, also known as cost plus processing, is a method of applying one or more burden
cost components to the raw cost amount of each individual transaction to calculate burden
costs. You can choose to account for the individual burden cost components to either track the
overhead absorption or to account for the total burdened costs. You can write custom reports
using standard views to report all burden cost components for each detail transaction.
The objective of burdening is to provide you with a buildup of raw and burden costs, so you
can accurately represent the total cost of doing business. You can choose to calculate total
burdened costs as a buildup of costs using a precedence of multipliers. Taking the raw cost,
Oracle Project Costing performs a buildup of burden costs on top of raw costs to provide you
with a true representation of costs. You provide the multiplier that Oracle Project Costing uses
to calculate the cost. Oracle Project Costing performs the buildup for each detailed transaction.
Answer: b
Burden Structures
You define the cost buildup using a burden structure. A burden structure determines how you
group cost bases and establishes the method of applying burden costs to raw costs. Expenditure
types classify raw costs and burden cost codes classify burden costs. The relationship between
expenditure types and burden cost codes within each cost base determines what burden costs
Oracle Project Costing applies to specific raw costs, and the order in which Oracle Project
Costing applies the burden costs.
Each expenditure type can belong to only one cost base having a type of Burden Cost within
each burden structure. This setup ensures that Oracle Project Costing does not burden an
expenditure types more than once.
If you do not assign an expenditure type to a cost base, then Oracle Project Costing does not
burden transactions with that expenditure type. The burdened cost for these transactions equals
the raw cost of the transaction.
Example
The diagram on this page illustrates a burden structure with the following cost bases:
Labor
- Includes the expenditure types Professional, Clerical, and Sales.
Burden Structures
Create an Additive burden structure to apply each burden cost code assigned to a cost base
using the same precedence when calculating burden costs. Additive schedules automatically
provide a default precedence value of 1 to each burden cost code in the structure.
Burden Structures
Create a Precedence burden structure to specify the order in which each burden cost code in a
cost base is applied to raw costs. Enter the precedence in which you want to apply each burden
cost code to raw costs within the cost base.
Answer: b
Answer: a
Answer: a, b, d
Answer: a, c
Change Comment
You can edit the expenditure comment of an item. You can use this adjustment to make the
expenditure comment clearer if you are including the comment on an invoice backup report.
Split Item
You can split an item into two items so that you can process the two resulting split items
differently. The resulting split items are charged to the same project and task as the original
item. When you split an expenditure item charged to a contract project, you can select whether
each resulting split item is billable. When you split an expenditure item charged to a capital
project, you can select whether each resulting split item is capitalizable.
For imported expenditure items, you can split an item into two items only if the Allow
Adjustments transaction source option is enabled on the transaction source that is associated
with the expenditure item.
Transfer Item
You can transfer an item from one project and task to another project and task.
Oracle Project Costing provides security as to which employees can transfer items
between projects. Cross-project users can transfer to all projects. Key members can
transfer to projects to which they are assigned. Oracle Project Costing performs a standard
validation on all transferred items.
Oracle Project Costing also ensures that you only transfer items which pass the charge
controls of the project and task to which you are transferring. If the items you are
transferring do not pass the new project and task's charge controls, then you cannot
transfer the item.
For imported expenditure items, you can transfer an item only if the Allow Adjustments
transaction source option is enabled on the transaction source that is associated with the
expenditure item.
Mass Adjustments
Use the Find Expenditure Items window or the Find Project Expenditure Items window to
process a mass adjustment of expenditures. The mass adjustment feature provides faster
performance when you adjust a large number of expenditures.
If you use the Find Project Expenditure Items window, you can mass adjust expenditure items
for a single project across operating units. The expenditure items that you adjust can cross
operating units, but you must have security access to an operating unit to view and adjust those
expenditure items. For example, a project has expenditure items associated with operating units
A, B, C, and D. If your responsibility only gives you access to operating units B and C, then
you can view and adjust only the expenditure items from operating units B and C.
If you use the Find Expenditure Items window, you can mass adjust expenditure items across
projects, within a single operating unit. If you have access to more than one operating unit,
then you must select the operating unit. If you have access to only one operating unit, then that
operating is the default value. Oracle Project Costing adjust only the expenditure items that
correspond to the current operating unit.
To perform mass adjustment of expenditures:
1. Navigate to the Find Project Expenditure Items or Find Expenditure Items window.
Processing Adjustments
After you perform adjustment actions, run the appropriate programs to process the adjustments:
1. Distribute Costs - Run the appropriate cost distribution programs to process the
adjustments. For example, if you adjust timecard expenditure items on a project that uses
total burdened accounting, then you run PRC: Distribute Labor Costs and PRC: Distribute
Total Burdened Costs.
2. Generate Accounting Events - Next, run PRC: Generate Cost Accounting Events to
derive the default credit accounts as needed and generate accounting events for the
adjustments in Oracle Subledger Accounting. You can either run the program separately
for each type of cost (select appropriate process category) or once for all unprocessed cost
distribution lines (leave the Process Category parameter blank).
3. Create Accounting - Finally, run PRC: Create Accounting to create subledger accounting
entries in Oracle Subledger Accounting for the accounting events. You can set the
Transfer to General Ledger parameter to Yes to enable the program to automatically
transfer the final accounting to Oracle General Ledger and run the Journal Import
program. If you choose to transfer to Oracle General Ledger, then you can also set the
parameter Post in General Ledger to Yes to enable the program to automatically post
Answer: a
Answer: c
Answer: b
Answer: a
Answer: a
Commitment Reporting
You can report the total cost of a project by reporting the committed cost along with the actual
cost. You can report the flow of committed cost, including associated nonrecoverable tax
amounts, through Oracle Purchasing and Oracle Payables. These committed costs can include:
Open requisitions (unpurchased requisitions).
Open purchase orders (uninvoiced and non-delivered).
Prepayment invoices that are not matched to a purchase order, and not yet applied to a
supplier invoice.
- Note: The unmatched prepayment invoice commitment amount is the outstanding
unapplied amount of the prepayment invoice. Oracle Project Costing calculates the
amount by subtracting prepayment application amounts from the prepayment invoice
amount.
Unmatched pending invoices (supplier invoices not yet interfaced to Oracle Project
Costing to be included in project costs).
Oracle Project Costing shows prepayment invoices that are not matched to purchase orders as
invoice commitments. The matched prepayment invoice does not appear as a separate
commitment.
Accounting Transactions
Oracle Purchasing and Oracle Payables use the Account Generator to determine the default
accounting for each project-related distribution line based on the project information that you
enter.
Oracle Purchasing builds the account number for the charge, accrual, and variance distribution
accounts based on the Account Generator assignments that you define during implementation.
You can define your Account Generator processes so that project-related requisitions and
purchase orders use project-related information in the Account Generator assignments and non-
project-related documents use the Account Generator assignments predefined by Oracle
Purchasing. If you use encumbrance accounting, you can also define assignments for the
budget account based on project information.
In Oracle Payables, the Account Generator builds the default expense account number for
project-related invoices using assignments that you define during implementation. You must
enter the account number for non-project-related invoices. The Account Generator determines
the default liability account for all invoices based on the liability account defaults provided by
Oracle Payables.
Answer: a
Answer: a
Payment Control
Payment Control enables project managers to manage supplier payment for their projects. It
integrates with Oracle Purchasing and Oracle Payables to create supplier invoices with
automatic payment hold in Oracle Payables for purchase orders with complex payment terms
of Pay When Paid and a deliverables schedule. Further, on interface of these supplier invoices
from Oracle Payables to Oracle Projects as expenditure items, draft customer invoices
generated on these expenditure items are automatically linked to these supplier invoices.
You can also manually link supplier invoices to draft invoices from the Supplier Workbench or
when reviewing invoices. In addition, you can manually review hold conditions and release
holds from the Supplier Workbench.
Payment Control provides the Send AR Notification workflow to enable project managers
track receipts applied to customer invoices in Oracle Receivables. You can customize the
workflow to send notifications to recipients other than the default recipient of project manager.
If you enabled AR Receipt Notification for your projects and the notification includes receipts
applied to customer invoices that are linked to supplier invoices on payment hold, you can
manually review these invoices and release holds on supplier invoices from the Supplier
Workbench.
Expenditure Inquiry
You can use the Find Project Expenditure Items window or the Find Expenditure Items
window in Oracle Project Costing to query supplier cost expenditure items. You can select a
combination of find criteria to limit the search. For example, you can enter find criteria specific
to supplier costs on the Supplier tab to query the expenditure items for a specific supplier
invoice, payment, or receipt. After you query the expenditure items, you use the Expenditure
Items window or Project Expenditure Items window to review them. You can use folder tools
to add additional columns that provide supplier cost-specific information.
You can review the item details for supplier cost expenditure items. For supplier costs from
supplier invoices, you can choose AP Invoice to drill down to the invoice overview in Oracle
Payables. If the invoice is matched to a purchase order, then you can drill down to the purchase
order from the Invoice Workbench. For expenditure items from receipt accrual transactions,
you can choose PO Receipt to drill down to the receipt transaction summary in Oracle
Purchasing. You can also drill down to the related purchase order from the Receipt Transaction
Summary window. For expenditure items from purchase order-related contingent worker labor
costs, you can choose Purchase Order Details to drill down to the purchase order details in
Oracle Purchasing.
Managing Retainage
Retainage is an agreed upon amount, typically a percentage, that you withhold from a
subcontractor until the subcontractor makes predetermined progress for a particular scope of
work. Retainage is also known as retention or contractual withholds. With Oracle's Complex
Work feature, contract administrator can negotiate retainage terms with the contractor and
capture these as part of the contract. For example, the contract can specify that you will retain
20 percent from all payments until 25 percent of work is complete. Therefore, whenever the
subcontractor sends you an invoice, you retain 20 percent of each payment until the overall
progress reaches 25 percent.
Oracle Payables automatically calculates the retainage amount for a supplier invoice based on
the retainage rate and maximum retainage amount that you specify on the purchase order
header in the Buyer WorkCenter in Oracle Purchasing. It stores the retainage amount as a
separate distribution line with a distribution line type of Retainage. Oracle Payables has one
retainage account it uses for each operating unit.
Oracle Project Costing does not report on or interface project-related retainage distribution
lines as commitments or actual costs. Instead, Oracle Project Costing captures the full amount
of the expense as a commitment and, when applicable, for budgetary control. Later, the full
Answer: a
Processing Adjustments
To Process Adjustments to Supplier Costs or Expense Reports in Oracle Project Costing:
1. Perform the adjustment in Oracle Project Costing.
2. Process the adjustment by running either PRC: Distribute Supplier Cost Adjustments,
PRC: Distribute Supplier Cost Adjustments for a Range of Projects, or PRC: Distribute
Expense Report Adjustments.
3. Run PRC: Generate Cost Accounting Events. Optionally, you can select Supplier Cost for
the Process Category parameter to process only supplier cost and expense report
adjustments.
4. Run PRC: Create Accounting to create the accounting for the accounting events in Oracle
Subledger Accounting. Run the program in final mode to complete the processing.
Optionally, you can select Supplier Cost for the Process Category parameter to process
only supplier cost and expense report adjustments. When you run the program in final
mode, you can also choose to transfer the final subledger accounting to Oracle General
Ledger and to post the journal entries.
Processing Adjustments
To Process Adjustments to Supplier Costs or Expense Reports in Oracle Payables:
1. Perform the adjustment in Oracle Payables.
2. Validate the new invoice distribution lines.
3. Run Create Accounting in Oracle Payables to create the accounting for the invoice in
Oracle Payables. Run the program in final mode to complete the processing. When you
run the program in final mode, you can also choose to transfer the final subledger
accounting to Oracle General Ledger and to post the journal entries.
4. Interface the adjustment to Oracle Project Costing:
- Run PRC: Interface Supplier Costs in Oracle Project Costing to interface the
adjustment to Oracle Project Costing.
- Run PRC: Interface Expense Reports from Payables in Oracle Project Costing to
interface the adjustment to Oracle Project Costing.
For information about other methods you can use to validate supplier invoices and create
accounting in Oracle Payables, see the Oracle Payables User's Guide.
Answer: a, b, c
Answer: b
Answer: c
Answer: a
Answer: b
Answer: a, c
Answer: a
Answer: a, c, d
Answer: a
Overview of Allocations
The allocations feature can distribute amounts between and within projects and tasks, or to
projects in other organizational units. For example, you can distribute amounts such as salaries,
administrative overhead, and equipment charges across several projects and tasks. Your
allocations can be as simple or elaborate as you like.
You identify the amounts to allocate (source) and then define the targets, the projects and tasks
to which you want to allocate the source amounts. Optionally, you can offset the allocations
with reversing transactions. Oracle Project Costing gathers source amounts into a source pool,
and then allocates to the targets using the basis method that you specify in the allocation rule.
When you allocate amounts, you create expenditure items whose amounts are derived from one
or more sources:
Existing summarized expenditure items in Oracle Project Costing
A fixed amount
Amounts in an Oracle General Ledger account balance
Allocation Terminology
Allocation - An allocation distributes existing amounts between and within projects and
tasks.
Allocation Rule - A set of attributes that describes how to allocate amounts in a source
pool to specified target projects and tasks.
Autoallocation Set - A group of allocation rules that you can run in a sequence that you
specify (step-down allocations) or at the same time (parallel allocations).
Basis Method - How you use an allocation rule to allocate the amounts from a source
pool to target projects. The basis methods include options to spread the amounts evenly,
allocate by percentage, or prorate amounts based on criteria you specify.
Full Allocation - An allocation method that distributes the total amounts in the specified
source pool. Use a full allocation to process an allocation rule only once in a run period.
GL Allocation Batch - Allocation batches created in Oracle General Ledger. For
example, GL allocation batches include Mass Allocation, Recurring Journals, and Mass
Budget.
Incremental Allocation - An allocation method that creates expenditure items based on
the difference between the transactions processed from one allocation to the next. This
Allocation Rules
Allocation rules define how Oracle Project Costing generates allocation transactions:
The source of the amounts you are allocating.
The targets - the projects and tasks to which to allocate amounts.
How much of the source pool you want to allocate, and if you want to include a fixed
amount, GL balance, or client extension (or any combination of these).
The time period during which the rule is valid.
You can create as many rules as needed, and use them in as many allocation runs as needed.
You can leave the original expenditure amounts in the source project, or offset the amounts
with reversing transactions. In most cases, the reversing transactions decrease the project
balance by the amount of the allocation.
Each allocation rule belongs to an operating unit and cannot be shared with other operating
units. Allocation rule source projects must be from the same operating unit. When cross-charge
is enabled, depending on the Targets Selection, you can allocate to target projects that are in
different operating units, legal entities, or business groups from the source project operating
unit. Offset projects must always be in the same operating unit as source projects.
Basis Method
The basis method defines how the rule divides amounts in the source pool among the targets.
Spread Evenly - This method is the most simple and direct. The rule divides the source
pool amount equally among all the chargeable target tasks included in the rule.
Target % and Spread Evenly - Specify the percentage of the source pool to allocate to
each target line. The rule calculates the amount to allocate to the line, and then spreads the
results evenly among the tasks.
Prorate and Target % and Prorate - These two proration basis methods provide precise
control over how the rule distributes the source pool. The rule uses the attributes set in the
Basis window to derive the rate at which the source pool amount is apportioned among the
target projects and tasks. For the Prorate basis method, the rule uses the basis attributes to
apportion the source amount among all the tasks defined by the rule. For the Target % and
Prorate method, the rule first uses the target percentage to calculate the amount to allocate
to the line, and then goes on to apportion the results among all the tasks.
Use Client Extension Basis - Another way to define percentages and a basis is to use the
Allocation Basis extension. If you use this extension, then you cannot use the Basis
window.
Source Definition
The rule accumulates the amounts for the source pool during a specific period of time. The end
date of that time period is based on the amount class. The amount class is the period or periods
during which the amounts are accumulated. The allocation period type and the amount class
determine the start date.
You must define at least one source. All source projects and tasks must be open and from the
same operating unit. The exception report for the allocation run lists any duplicate projects.
If you are using projects as sources, then the results can change each time you run the
allocation if project statuses change.
To define sources:
1. In the Allocation Pool % field, enter a percentage to specify how much of the source pool
to allocate. The default value is 100%.
2. (Optional) In the Fixed Source Amount field, enter an amount to include in the source
pool.
3. For Amount Class, select from the list of values. Depending on the allocation period type
you selected in the Allocation Rule window, PA or GL precedes the field name.
Target Definition
Targets are the projects and tasks to which the allocation distributes amounts. You specify the
projects and tasks either in the Target window or with the Allocation Target client extension.
You must define at least one target. Target projects must be open and target tasks must be
chargeable.
How the Target Interacts with the Basis
The rule charges allocation transactions to the target projects and tasks according to the basis
method. The rule first allocates the specified percentage of the source pool to each target line,
and then uses the information in the Basis window to prorate the allocated amount across the
tasks on each line.
Duplicate Target Projects
You can include the same project on multiple lines in the Target window. For example, you
can enter Project Y in the Project field on one line, and then specify a project organization that
includes Project Y on a different line. If you include the same project on multiple lines, then
the Allow Duplicate Targets option in the Allocation Rule window affects the way the rule
behaves:
Offset Definition
Offsets are reversing transactions that you can use to balance the allocation transactions with
the source or other project. All projects and tasks to which you apply offsets must be open and
chargeable. Do not specify an offset to the source project if you do not want to change the total
amount in the source project. All offset projects and tasks must be open and chargeable, and in
the same operating unit as the source projects. The rule creates the offset transactions for the
offset project and task when you run PRC: Generate Allocations Transactions.
To define the offset:
1. Select an offset method.
If the source is an Oracle General Ledger account and you want to create offsetting
transactions, then select the offset method Use Client Extension for Project and Task or
Specific Project and Task.
- None - The rule does not create any offset transactions.
- Source Project and Task - The rule creates reversing transactions for the source
projects and tasks.
Answer: a
Answer: b
Answer: d
Answer: a
Allocating Costs
After you define a rule for allocating costs, you can use the rule in an allocation run.
Processing the rule generates allocation transactions and (if specified) offset transactions in a
draft. The draft is a trial allocation run that you can review and evaluate. If the draft allocation
fails or does not produce the results you expect, then you can delete the draft, change the rule
parameters, and then create another draft. You can create, review, and delete draft runs until
you are satisfied with the results. However, you cannot create a draft if another draft exists for
the same rule. When you are satisfied with the draft run and its status is Draft Success, you can
release the allocation run.
Although you can run the program to generate allocations at any time, it is a good practice to
interface supplier costs and expense reports, run all costing programs, and run summarization
programs to prepare for the allocation to ensure that the allocation run includes all relevant
amounts.
Answer: a, b, d
Overview of AutoAllocations
AutoAllocations provide the ability to generate allocations more efficiently. You can group
processes and run them in a specified sequence or at the same time. AutoAllocations is an
Oracle General Ledger and Oracle Project Costing feature. In Oracle General Ledger, the
allocation definition is called a batch. In Oracle Project Costing, the allocation definition is
called a rule.
From an Oracle Project Costing responsibility, you can create AutoAllocation sets that contain
project allocation rules. If Oracle Project Costing is integrated with Oracle General Ledger,
then you can also include GL allocation batches. You can also view AutoAllocation sets that
you create using an Oracle Project Costing responsibility.
From an Oracle General Ledger responsibility, you can create AutoAllocation sets that contain
only Oracle General Ledger batches. You can also view AutoAllocation sets that you create
using an Oracle General Ledger responsibility.
Overview of AutoAllocations
Each rule or batch has a different effect when you run the autoallocation set, depending on the
set type:
Step-down allocations - Use the results of each step in subsequent steps of the
AutoAllocation set. Oracle Workflow controls the flow of the AutoAllocations set.
Parallel allocations - Carry out the specified rules all at once.
Answer: a
Asset Capitalization
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Copyright Oracle, 2010. All rights reserved.
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Objectives
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Agenda
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Overview of Asset Capitalization
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Overview of Asset Capitalization
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To distinguish cost of removal and proceeds of sale amounts, you must enter proceeds of sale
amounts using expenditure types that you define to specifically classify these amounts. Oracle
Project Costing automatically classifies amounts for all other expenditure types as cost of
removal.
To associate retirement costs with a group asset in Oracle Assets, you create a retirement
adjustment asset in the capital project and identify it with a specific group asset. As with
capital assets, you define asset grouping levels and assign retirement adjustment assets to the
grouping levels to summarize the retirement cost amounts for posting to Oracle Assets.
When retirement activities are complete, you generate asset lines for the retirement cost
amounts and send the lines to Oracle Assets for posting as adjustments to the accumulated
depreciation accounts for the group assets. To communicate notice of an asset retirement to
Oracle Assets, you can optionally initiate retirement requests in Oracle Project Costing that are
automatically passed to Oracle Assets.
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Project-Related Asset Processing Flow
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Accounting Example
Accounting Example
In this example, you create a capital project to capture the costs of building a new clean room
and installing air quality monitors. As part of this project, you are removing several air quality
monitors from an existing clean room that is being designated for other uses and retiring them.
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Accounting Example
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Accounting Example
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Accounting Example
Accounting Example
In this example, after you transfer the final accounting for the adjustment to Oracle General
Ledger, the total amount in Oracle General Ledger for the CIP-Clean Room account is
9,205.00.
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Accounting Example
Accounting Example
Each asset line created by the program to generate asset lines has an associated general ledger
account. After you post the asset lines in Oracle Assets, you can create accounting in Oracle
Subledger Accounting to relieve the CIP or RWIP account, and transfer the amount to the
appropriate asset cost or group depreciation reserve account. Oracle Subledger Accounting
transfers the final accounting entries to Oracle General Ledger.
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Accounting Example
Accounting Example
As the final step in the process of accounting for the asset transactions illustrated in this
example, you initiate an asset retirement transaction in Oracle Assets for the air quality
monitors that you removed from the clean room that you are taking out of service. You then
create journal entries to account for the retirement of the group asset cost associated with these
monitors. For more information on processing retirement transactions, see: Asset Retirements,
Oracle Assets User Guide.
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Quiz
Answer: a
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Chapter 16 - Page 16
Quiz
Answer: c
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Agenda
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Project Types for Asset Capitalization
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Event Processing Method - You can specify a capital event processing method to control
how assets and costs are grouped over time. You can choose to use either periodic or
manual events.
Grouping Method Specify how to summarize asset lines. You can choose from the
following options:
- All (highest level of summarization)
- CIP Grouped by Client Extension
- Expenditure Category
- Expenditure Category, Nonlabor Resource
- Expenditure Type
- Expenditure Type, Nonlabor Resource
Group Supplier Invoices - Select to consolidate the expenditure items on a supplier
invoice into one asset line according to the method specified in the Grouping Method
field. Deselect to interface the lines to Oracle Assets as separate mass addition lines.
Interface Supplier Invoices - If you choose not to group supplier invoices, then you
select a grouping option:
- As New Mass Additions - Interfaces each expenditure item on a supplier invoice line
to Oracle Assets as a separate Mass Addition line. Each line has the status NEW.
- As Merged Mass Additions - Interfaces each supplier invoice line to Oracle Assets
as a separate Mass Addition line with the status MERGED.
Capitalized Interest Default Schedule - Use this field to specify a default interest rate
schedule for capitalized interest.
Capitalized Interest Allow Override - Select this check box to allow override of the
default capitalized interest rate schedule at the project level.
For additional information regarding Capitalized Interest, see the lesson titled Capital
Projects: Capitalized Interest.
For additional information regarding implementing project types, see the course titled R12.x
Project Foundation Fundamentals.
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Quiz
Answer: a
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Agenda
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Asset Processing Flow
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7. Optionally, define capital events to control how assets and costs are grouped, and placed
in service or retired.
8. Generate asset lines.
9. Review asset cost lines and make any necessary adjustments.
10. Run the program to interface assts to Oracle Assets.
11. Run the program to tieback asset lines from Oracle Assets.
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Specifying Costs
Specifying Costs
Specifying Capital Asset Transactions to Capitalize
For capital assets, you must specify whether to capitalize or expense each transaction charged
to a capital project. You can use project-level and task-level transaction controls to indicate
which kinds of expenditures are allowable for capitalization. You can disable the Capitalizable
check box for a lowest level task on a capital project to indicate that all transactions charged to
the task will be classified as non-capitalizable.
Retirement Cost
You can select Retirement Cost check box for a task on a capital project to indicate that the
task is for retirement cost processing. When you enable this option, all expenditure items
charged to a task are designated as cost of removal or proceeds of sale amounts that pertain to
retirement adjustment assets. A task identified for processing retirement cost cannot also be
capitalizable.
You cannot make an election on how to account for retirement costs you record to a retirement
adjustment asset. Oracle Project Costing automatically classifies retirement costs as cost of
removal or proceeds of sale amounts based on the expenditure type. You define expenditure
types for the PROCEEDS_OF_SALE_EXP_TYPES lookup type. Oracle Project Costing
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Chapter 16 - Page 25
classifies all amounts you enter for the expenditure types defined in this lookup as proceeds of
sale amounts. Conversely, when you enter amounts for a retirement cost task and specify an
expenditure type that is not defined in the PROCEEDS_OF_SALE_EXP_TYPES lookup type,
Oracle Project Costing automatically classifies the amounts as cost of removal.
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Defining Assets for Capital Projects
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When you define a retirement adjustment asset in Oracle Project Costing, you must
specify a valid Oracle Assets group asset identifier as the target asset. You can create
retirement adjustment assets and interface retirement costs to Oracle Assets only for fixed
assets that are associated with group assets in Oracle Assets. To interface a retirement
adjustment asset to Oracle Assets, you must specify a retirement date for the asset in
Oracle Project Costing.
You can initiate a retirement request in Oracle Project Costing to identify one or more
assets that you are retiring from service. Retirement requests serve as an advice that you
can use to notify your fixed asset department about assets that need to be retired in Oracle
Assets.
For descriptions of the asset attributes, see the Oracle Project Costing User Guide.
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Streamlining Asset Creation
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Asset Grouping Levels
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Asset Cost Allocation Methods
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Specifying an Actual Date in Service or a Retirement Date
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Capital Events
Capital Events
You can create periodic and manual capital events to control how Oracle Project Costing
interfaces capital project assets and costs to Oracle Assets over time. You use capital events to
group assets and costs before you generate asset lines for capitalization and retirement cost
processing.
You can specify a default event processing method for a capital project type and override it at
the project level. Oracle Project Costing supports the following event processing methods:
None - Defined groupings are valid for the life of the project
Periodic Event Creation - Cost and assets are grouped periodically by grouping level
Manual Event Creation - Cost and assets are grouped manually by the user
When you submit the program PRC: Generate Asset Lines for a Single Project or PRC:
Generate Asset Lines for a Range of Projects for a capital project that uses capital events,
Oracle Project Costing automatically generates asset lines for all defined, unprocessed capital
events.
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Chapter 16 - Page 33
Periodic Events
When you use periodic event processing, you submit the concurrent program PRC: Create
Periodic Capital Events to select unprocessed assets and cost amounts for a project based on
the actual date in service and expenditure item date you specify in the process parameters. The
program PRC: Create Periodic Capital Events enables you to create periodic capital events to
group project assets and costs for capitalization and retirement cost processing. You enable
periodic capital event processing for a project by setting the event processing option in the
Capital Information window to Periodic. When you submit this program, Oracle Project
Costing selects unprocessed assets and costs for capital projects based on the actual date in
service, expenditure item date, and project values you specify in the process parameters. The
process then associates the assets and costs with the event period you specify in the process
parameters. You can then submit the program to generate asset lines for the selected assets and
costs.
Manual Events
When you use manual event processing, you can specify the assets and costs that you want to
include in the event, as well as the actual date in service and expenditure item date. You create
capital events from the Capital Projects window:
1. Navigate to the Capital Projects window.
2. Find the capital project for which you want to define a capital event in the Find Capital
Projects window.
3. Choose the capital project you want and choose the Capital Events button.
4. In the Capital Events window, select either the Capital Project Assets Workbench or the
Retirement Adjustment Assets Workbench.
5. Insert a new row to derive the (next) sequential event number, an event name, and
optionally select a different asset allocation method.
6. Save your work.
7. To select assets for the event, choose the Assets button to open the Event Assets window
and choose Attach New Assets.
8. In the Attach New Asset window, enter selection criteria to find one or more assets to
attach to the event and choose OK to return to the Event Assets window.
9. Save your work and close the Event Assets window to return to the Capital Events
window.
10. To select costs for the event, choose the Costs button to open the Event Costs window
and choose Attach New Costs.
11. In the Attach New Costs window, enter selection criteria to find costs to attach to the
event and choose OK to return to the Event Costs window.
12. Save your work and close the Event Costs window to return to the Capital Events
window.
13. To generate asset lines for the event, choose Generate. You can view the status of the
request in the Events window.
Note: You can optionally reverse all assets for the event by choosing the Reverse button.
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Chapter 16 - Page 34
Generating Summary Asset Lines
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Chapter 16 - Page 35
- PRC: Generate Cost Accounting Events
Note: You must run this program for each process category for which you have
costs. Alternatively, you can leave the Process Category parameter blank to
generate accounting events for all costs.
- PRC: Create Accounting
Note: You must run this program for each process category for which you have
costs. Alternatively, you can leave the Process Category parameter blank to create
accounting events for all costs.
Important: You must run the program PRC: Create Accounting in final mode for
the expenditure items before you generate asset lines. The generate asset lines
program does not create asset lines for the costs if the corresponding expenditure
items are not successfully accounted in final mode.
2. Run the program to update project summary amounts so you can see the total expense and
CIP/RWIP amounts in the Capital Projects Summary window.
3. If you use periodic or manual capital events to group project assets and costs, then
process the events.
Determining CIP or RWIP Accounting
You must create the final accounting for costs in Oracle Subledger Accounting before you can
generate asset lines for the costs. The program that generates asset lines uses the final
accounting from Oracle Subledger Accounting to determine the CIP or RWIP accounts for
asset lines. This approach ensures that Oracle Project Costing interfaces the final CIP or RWIP
accounts to Oracle Assets. The program uses the predefined post-accounting programs that
Oracle Project Costing provides in Oracle Subledger Accounting to obtain final CIP or RWIP
accounts from Oracle Subledger Accounting. If you define journal line types for Oracle
Subledger Accounting that use different accounting classes, then you must add these
accounting classes to the post-accounting program assignments.
Note: The generate asset lines process obtains the CIP or RWIP accounts from the cost
distribution lines in Oracle Project Costing, and not from Oracle Subledger Accounting, in the
following two situations:
The Interface Costs to GL option for the type of cost is set to No in Oracle Project Costing
implementation options.
You import costs from an external non-Oracle system into Oracle Project Costing as
accounted costs. As a result, Oracle Project Costing does not generate accounting events
or create accounting for these costs.
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Assigning Asset Lines
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Chapter 16 - Page 37
Sending Asset Lines to Oracle Assets
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In Oracle Assets you can query and review assets posted to Oracle Assets by project number
and task number in the Financial Inquiry window.
Prerequisite:
If you are sending cost adjustments for an asset from Oracle Project Costing to Oracle Assets,
ensure that the original mass addition was posted to Oracle Assets. If the mass addition has not
become an asset, the Interface process will reject the adjustment line.
Tieback Asset Lines from Oracle Assets
After you interface assets to Oracle Assets, run the program PRC: Tieback Asset Lines from
Oracle Assets. This program identifies and updates Oracle Project Costing assets and asset
lines that you interfaced to Oracle Assets. For assets, the program updates the asset details to
reflect the asset number assigned in Oracle Assets and the period in which the asset was
posted. For asset lines, the program updates each line to reflect the Oracle Assets period in
which the asset line was posted.
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Chapter 16 - Page 39
Quiz
Answer: b
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Chapter 16 - Page 40
Agenda
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Chapter 16 - Page 41
Adjusting Capital Project Costs
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Chapter 16 - Page 42
Reversing Capitalization of Assets in Oracle Project Costing
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Chapter 16 - Page 43
When you choose the action to reverse capitalize an asset, Oracle Project Costing checks
Oracle Assets to determine if the asset was retired previously. If yes, then Oracle Project
Costing issues a warning message and you can either continue processing or cancel the
reversal action.
Reversing Capitalization of a Capital Asset After Depreciation
Oracle Assets processes reversal transactions from Oracle Project Costing as negative cost
adjustments to the original asset. If you have begun depreciating this asset, then Oracle Assets
must reverse the depreciation expense in the period you reverse capitalize the asset.
Before you reverse an asset, ensure that the Amortize Adjustment check box is unchecked for
the asset. If you reverse capitalize an asset for which you specify to amortize adjustments, then
the monthly depreciation on the original cost will not equal the monthly depreciation generated
to account for the asset cost reversal in Oracle Assets. Oracle Assets amortizes the catch-up
depreciation on the negative cost adjustment over the remaining life of the asset.
Recapitalization of Reverse Capitalized Assets
To recapitalize an asset, enter the new Date Placed in Service in Oracle Project Costing so you
can generate new asset lines. You must also manually change the Date Placed in Service for
the asset in the Asset Workbench in Oracle Assets, as the Date Placed in Service cannot be
updated through the Mass Additions process.
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Abandoning a Capital Asset in Oracle Project Costing
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Agenda
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Asset Capitalization Implementation Steps
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Implement Asset Extensions
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Chapter 16 - Page 48
and retirement adjustment assets) and asset assignments prior to the creation of asset lines,
based on transaction data (such as inventory issues or supplier invoices) entered for the
project.
Capital Event Processing Extension - The program PRC: Create Periodic Capital Event
calls this extension for each project for which it creates a capital event. Use this extension to
automatically create project assets (capital assets and retirement adjustment assets) and asset
assignments prior to the creation of capital events, based on transaction data (such as
inventory issues or supplier invoices) entered for the project.
CIP Account Override Extension - Override the CIP account associated with an asset line
to specify a different account for posting CIP clearing amounts. This capability enables you
to utilize accounts for clearing CIP amounts that are different from the accounts you use to
account for CIP expenditures. This extension allows you to preserve the original CIP cost
account details.
CIP Grouping Extension - Define a unique method that your company uses to specify how
expenditure lines are grouped to form asset lines. Oracle Project Costing predefines five CIP
Grouping Methods. If these methods do not meet your companys business needs, then use
this client extension to create your own CIP Grouping Method. After you define the
extension, select the Group by Client Extension grouping method. Oracle Project Costing
calls the CIP Grouping extension when it generates asset lines.
Depreciation Account Override Extension - Define your own logic for deriving the
depreciation expense account when you define an asset or interface asset lines to Oracle
Assets. Oracle Project Costing calls this extension during update of the Assets and Asset
Details windows and during validation of asset information when you interface asset lines to
Oracle Assets.
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Define Standard Unit Costs for Asset Cost Allocations
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Enable Retirement Cost Processing
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Define Proceeds of Sale Expenditure Types
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Summary
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Copyright Oracle, 2010. All rights reserved.
Asset Capitalization
Chapter 16 - Page 54
Cross Charge
Chapter 17
Cross Charge
Chapter 17 - Page 1
Copyright Oracle, 2010. All rights reserved.
Cross Charge
Chapter 17 - Page 2
Cross Charge
Cross Charge
Chapter 17 - Page 3
Objectives
Cross Charge
Chapter 17 - Page 4
Agenda
Cross Charge
Chapter 17 - Page 5
Overview of Cross Charge
Cross Charge
Chapter 17 - Page 6
Cross Charge Terminology
Cross Charge
Chapter 17 - Page 7
operating unit creates an Oracle Receivables invoice, which is interfaced as an Oracle
Payables invoice to the receiver operating unit.
Provider Operating Unit - The operating unit whose resources provide services to another
project or organization. For cross charge transactions, the provider operating unit is the
expenditure operating unit; the project operating unit owns the intercompany billing project.
Provider Organization - For cross charge transactions, the organization that provides
resources to another organization. The default is the expenditure organization or the non-
labor resource organization, which can be overridden using the Provider and Receiver
Organization Override client extension.
Receiver Operating Unit - An operating unit whose projects receive services from another
project or organization.
Receiver Organization - The operating unit whose projects receive services from another
project or organization.
Transfer Price - The price agreed upon by the provider and receiver organizations in a cross
charged transaction.
Cross Charge
Chapter 17 - Page 8
Cross Charge Types Example
Cross Charge
Chapter 17 - Page 9
Processing Methods
Processing Methods
You can choose one of the following processing methods for cross charge transactions:
Borrowed and Lent Accounting - Oracle Project Costing creates accounting entries to
pass costs and revenue across organizations without generating internal invoices. Oracle
Project Costing determines the appropriate cost or revenue amounts based on the transfer
price rules of the provider and receiver organizations. Borrowed and lent accounting
entries provide a financial view of an organizations performance.
Intercompany Billing Accounting - Companies choose the intercompany billing method
largely due to legal and statutory requirements. Oracle Project Costing generates physical
invoices and corresponding accounting entries at legal transfer prices between the internal
seller (provider) and buyer (receiver) organizations when they cross a legal entity
boundary or operating units. For additional discussion of Intercompany Billing, see the
Advanced Topic lesson titled R12 Projects Advanced - Intercompany Billing.
No Cross Charge Process - Companies generally process cross charges in Oracle Project
Costing using the borrowed and lent or intercompany billing method. However,
companies may not need to process cross charge transactions, if, for example, you have
performed intercompany billing manually in Oracle General Ledger.
Cross Charge
Chapter 17 - Page 10
Quiz
Answer: b
Cross Charge
Chapter 17 - Page 11
Agenda
Cross Charge
Chapter 17 - Page 12
Borrowed and Lent Processing
Cross Charge
Chapter 17 - Page 13
Project and Task Setup
Cross Charge
Chapter 17 - Page 14
- At the project-level, this entry is the default value for each new top-task that you
create.
- At the task-level, this entry is the default value for each new subtask that you create.
If you assign a transfer price schedule to a lowest-level task, then Oracle Project
Costing uses that transfer price schedule to process labor or non-labor cross-charged
transactions. If you do not assign a transfer price schedule at the lowest task level,
then Oracle Project Costing uses the transfer price schedule that you assign at the
project-level.
Note: Intercompany Tax Receiving Task (project-level only) is for intercompany billing. You
can specify the task to use to collect nonrecoverable intercompany tax amounts as project
costs.
Cross Charge
Chapter 17 - Page 15
Subledger Accounting Process Flow: Cross Charge
Cross Charge
Chapter 17 - Page 16
4. PRC: Generate Cross Charge Accounting Events - Uses AutoAccounting to determine
the default credit account and then to generate accounting events. You can select Borrowed
and Lent for the Process Category parameter to run the program only for borrowed and
lent transactions.
5. PRC: Create Accounting - Creates subledger journal entries for eligible accounting
events. You can select Borrowed and Lent for the Process Category parameter to run the
program only for borrowed and lent accounting events. You can run the program in either
draft or final mode. Optionally, the program can post journal entries in Oracle General
Ledger to send journal entries to Oracle General Ledger.
6. PRC: Transfer Journal Entries to GL - When you run the program PRC: Create
Accounting, if you select No for the parameter Transfer to GL, then you run this program
to transfer final subledger accounting entries to Oracle General Ledger.
7. Journal Import (in Oracle General Ledger) - Imports the final accounting entries into
Oracle General Ledger. Either PRC: Create Accounting or PRC: Transfer Journal Entries
to GL initiates this program when you transfer final subledger accounting journal entries to
Oracle General Ledger. Optionally, you can set these programs to post journal entries in
Oracle General Ledger.
You can require the receiver operating unit to run additional customized processes to create
additional accounting entries in Oracle Subledger Accounting and transfer the accounting entries
to Oracle General Ledger. For example, your implementation team can develop customized
processes to handle organizational profit elimination to satisfy your company's accounting
practices.
In addition, the provider operating unit can adjust cross charge transactions or perform steps
resulting in the reprocessing of borrowed and lent transactions.
Cross Charge
Chapter 17 - Page 17
Borrowed and Lent Accounting
Cross Charge
Chapter 17 - Page 18
Cross Charge Adjustments
Cross Charge
Chapter 17 - Page 19
cross charge processing resets the cross charge processing method to No Cross Charge
Processing and the cross charge processing status to Never Processed.
Changing transfer price conversion attributes - You can reconvert transfer price amounts
from the transaction currency if you change the transfer price exchange rate date type and
exchange rate type, which govern how Oracle Project Costing converts the transfer price
amount from the transaction currency to the functional currency. To do this, you choose the
Change Transfer Price Functional Currency Attributes option from the Reports menu.
Changing transfer price base amounts - If you recalculate raw or burdened cost, then the
amount of the transfer price basis (and the final transfer price amount) of a cross charged
transaction can also change. The respective cost distribution processes determines whether
such recalculations affect the transfer price amount of any cross charged transactions and
automatically mark the transactions for cross charge reprocessing. The cost distribution
programs automatically reset the cross charge processing status to Never Processed and
blanks out the transactions transfer price amount.
Performing transfers and split - Transferring or splitting a cross charged transaction does
not affect the cross charge processing method of the existing transactions. The reversing and
new transactions undergo the cross charge processing as usual.
In addition, if you change and recompile a burden schedule that Oracle Project Costing used to
determine the transfer price of some items, then the recompile program marks these items for
cross charge reprocessing. The program resets the cross charge type to Null, the cross charge
processing method to Pending, and the cross charge processing status to Never Processed.
Cross Charge
Chapter 17 - Page 20
Processing Cross Charge Adjustments
Cross Charge
Chapter 17 - Page 21
Note: If the adjustment has an impact on the accounting, then you must run the programs PRC:
Generate Cross Charge Accounting Events and PRC: Create Accounting to process the
adjustment accounting. You can select the process category Borrowed and Lent for both
programs to restrict the processing to only borrowed and lent accounting events.
Cross Charge
Chapter 17 - Page 22
Quiz
Answer: a
Cross Charge
Chapter 17 - Page 23
Quiz
Answer: b
Cross Charge
Chapter 17 - Page 24
Agenda
Cross Charge
Chapter 17 - Page 25
Borrowed and Lent Cross Charge Processing Implementation
Steps
Cross Charge
Chapter 17 - Page 26
Transfer Price Rules
Cross Charge
Chapter 17 - Page 27
potential revenue amount as a basis and apply a transfer price markup percentage even when
the cost transaction is not billable from the receiver project's perspective.
To define a transfer price rule:
1. Enter a unique name for the rule.
2. Select a type (Labor or NonLabor).
3. Specify a description and the effective dates.
4. For Basis, select Raw Cost, Burdened Cost, or Revenue.
5. Select one of the calculation methods to determine the transfer price:
- Basis - Use the transfer price with no further adjustments.
- Burden Schedule - Specify the name of an existing burden schedule to apply to the
basis.
- Bill Rate Schedule - For Operating Unit, specify the name of the operating that owns
the bill rate schedule that you want to use. For Schedule, specify a bill rate schedule
to apply to the basis.
6. In the Apply field, enter a percentage (zero or any positive number).
- The percentage is the amount of a markup or discount to the transfer price amount
calculated by the rule. Numbers less than 100 indicate a discount, and numbers
greater than 100 indicate a markup.
Cross Charge
Chapter 17 - Page 28
Transfer Price Schedule
Cross Charge
Chapter 17 - Page 29
To define a transfer price schedule:
1. Enter a unique name for the schedule
2. Select a type (Labor or Non-Labor).
3. Specify a description and the effective dates.
4. Enter the schedule lines:
- Line Num - Enter a number greater than zero to specify the display order for the
lines.
- Provider - Choose any organization, parent organization, operating unit, legal entity,
or business group.
- Receiver (Optional) - Choose any organization, parent organization, operating unit,
legal entity, or business group. If you leave this field blank, then this transfer price
schedule applies to any receiver organization receiving transactions from the
specified provider organization.
- Labor Rule and Non Labor Rule - For Labor Rule, choose a valid transfer type rule
with a type of Labor for this provider and receiver organization pair. For Non Labor
Rule, choose a rule with a type of Non Labor. You must specify at least one transfer
price rule (labor, non-labor, or both) for each schedule line.
- Apply % - One Apply % field applies to labor rules, the other to non-labor rules.
Enter a percentage (zero or any positive number). The percentage is a markup or
discount to the transfer price amount calculated by the rule. Numbers less than 100
indicate a discount, and numbers greater than 100 indicate a markup.
- Transfer Price Amount Type - Select one of the following:
- Cost and Revenue - The schedule line applies to all cross charge transactions.
- Cost Transfer - The schedule line is applied to transactions when the assigned
work type has an amount type of Cost.
- Revenue Transfer - The schedule line is applied to transactions when the
assigned work type has an amount type of Revenue.
- Effective Dates - Enter effective dates for this schedule line.
- Default - Choose one schedule line to be a default for this schedule. Oracle Project
Costing uses the rule associated with this line to derive the transfer price if none of
the other lines match your transaction. Oracle Project Costing does not require that a
transfer price schedule line be identified as the default line, however, it does issue an
error message if it cannot determine a rule to apply to a transaction.
Cross Charge
Chapter 17 - Page 30
Cross Charge Implementation Options
Cross Charge
Chapter 17 - Page 31
Provider and Receiver Controls for Borrowed and Lent
Accounting
Cross Charge
Chapter 17 - Page 32
AutoAccounting Rules for Borrowed and Lent Transactions
Cross Charge
Chapter 17 - Page 33
Implement Cross Charge Extensions
Cross Charge
Chapter 17 - Page 34
Quiz
Answer: a
Cross Charge
Chapter 17 - Page 35
Summary
Cross Charge
Chapter 17 - Page 36
Appendix A: Integration with
Oracle Inventory, Project
Manufacturing, and Asset
Tracking
Chapter 18
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 1
Copyright Oracle, 2010. All rights reserved.
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 2
Appendix A: Integration with Oracle Inventory, Project
Manufacturing, and Asset Tracking
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 3
Objectives
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 4
Agenda
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 5
Integration with Oracle Inventory
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 6
Integration with Oracle Inventory Flow
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 7
Miscellaneous Transactions
Miscellaneous Transactions
To enter a miscellaneous transaction in Oracle Inventory:
1. Enter the date and time (or accept default values).
- The transaction date becomes the expenditure item date.
2. Select a project-enabled transaction type in the Type field.
3. Enter the following required information:
- Item
- Subinventory
- Unit of Measure
- Quantity
- Account
- Source Project
- Source Task Expenditure Type
- Expenditure Organization
4. Save
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 8
Launching Transaction Managers
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 9
Transfer and Import
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 10
Quiz
Answer: a
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 11
Agenda
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 12
Oracle Inventory Integration Implementation Steps
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 13
Install and Implement Oracle Inventory
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 14
Enable Project Cost Collection
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 15
Create a Project-Enabled Transaction Type
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 16
transaction source type and a predefined transaction action. Oracle Inventory provides
transaction reporting and querying capabilities by transaction type.
Only user-defined transaction types can be project-enabled.
To create a user-defined transaction type:
In Oracle Inventory: (N) Setup > Transaction > Types
1. Select the User Defined tabbed region.
2. Enter a unique name for the transaction type.
3. Enter a transaction source type.
4. Select a transaction action.
5. Enable the Project check box.
6. Save your work.
To make a user-defined transaction type inactive:
Enter the date on which the transaction type becomes inactive. As of this date, you can no
longer use the transaction type in a transaction.
To enable Shortage Alerts and Shortage Notifications:
You can choose to receive an online shortage alert, a workflow-based notification, or both for
user-defined transaction types. For project-enabled transaction types, you can enable the alerts
and notifications for transaction types that have a transaction action of Receipt into stores.
Enable the check boxes to select which transaction action types will generate material shortage
alerts and notifications.
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 17
Create an Inventory Expenditure Type
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 18
Set Expenditure Type Profile Option
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 19
-Material - An account to accumulate material costs.
-Material Overhead - An account to accumulate material overhead or burden costs.
-Resource - An account to accumulate resource costs.
-Outside Processing - An account to accumulate outside processing costs.
-Overhead - An account to accumulate resource overhead or department overhead
costs.
In expenditure types are used to cost the value of transfers into a project. Out expenditure
types are used to cost the value of transfers out of a project.
You can choose only Expenditure Types that are not defined as Rate Required in Oracle
Projects
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 20
Quiz
Answer: b
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 21
Agenda
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 22
Integration with Oracle Project Manufacturing
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 23
Importing Project Manufacturing Costs
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 24
Transaction Sources
Transaction Sources
Oracle Project Costing predefines transaction sources to import transactions manufacturing-
related costs. Do not use these transaction sources to import transactions from non-Oracle
sources.
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 25
Transaction Sources (continued)
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 26
Quiz
Answer: a
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 27
Agenda
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 28
Integration with Oracle Asset Tracking
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 29
Entering receipts for project-related purchase orders in Oracle Purchasing and validating
the receipts against the Oracle Asset Tracking repository
Importing tracked items and cost into Oracle Project Costing
Monitoring costs in Oracle Project Costing
Generating asset lines for non-depreciable tracked items
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 30
How Purchase Order Receipts Flow into Project-Related
Transactions
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 31
For a depreciable item, an asset is created upon receipt. Therefore, the cost is transferred from
Oracle Assets to Oracle Subledger Accounting and then to Oracle General Ledger and not from
Oracle Project Costing. To create mass additions in Oracle Assets, you must run the Create
Assets: Interface Inventory Transactions to Oracle Assets concurrent program in Oracle Asset
Tracking.
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 32
Importing Oracle Asset Tracking Cost
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 33
Summary
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 34
Appendix B: Budgetary
Controls and Budget
Integration
Chapter 19
Answer: b
Answer: a
Answer: c
Answer: a
Answer: a
Answer: a
Answer: d
Expenditures
An expenditure is a group of expenditure items, or transactions, that an employee or an
organization incurs or an expenditure period. You charge expenditures to a project to record
actual work performed or cost incurred. Oracle Project Costing uses these terms for
expenditures:
Expenditure batch - A user-defined name used to track a batch of expenditures, such as
timecards and miscellaneous transactions.
Expenditure - A group of expenditure items incurred by an employee or organization for
an expenditure period.
Expenditure item - The individual transactions charged to a specific project and task
combination.
Burden Costing
Burdening, also known as cost plus processing, is a method of applying one or more burden
cost components to the raw cost amount of each individual transaction to calculate burden
costs.
Asset Capitalization
Using capital projects, you can define capital assets and capture construction-in-process (CIP)
and expense costs for assets you are creating. When you are ready to place assets in service,
you can generate asset lines from the CIP costs and send the lines to Oracle Assets for posting
as fixed assets. You use capital projects to capture the costs of capital assets you are building,
installing, or acquiring.
You can also define retirement adjustment assets and capture cost of removal and proceeds of
sale amounts (collectively referred to as retirement costs, retirement work-in-process, or
RWIP) for assets you are retiring that are part of a group asset in Oracle Assets. When your
retirement activities are complete, you can generate asset lines for the RWIP amounts and send
the lines to Oracle Assets for posting as adjustments to the accumulated depreciation accounts
for the group asset that corresponds to each asset.
Cross Charge
When projects share resources within an enterprise, it is common to see those resources shared
across organization and country boundaries. Further, project managers can also divide the work
into multiple projects for easier execution and management. The legal, statutory, or managerial
accounting requirements of such projects often present complex operational control, billing,
and accounting challenges. Cross charge enables project managers to easily view the current
total costs of the project, regardless of who performs the work or where it is performed.
You can choose one of the following processing methods for cross charge transactions:
Borrowed and Lent Accounting
Intercompany Billing Accounting
No Cross Charge Process