Accounting for Capital Project Costs
As you charge costs to the capital project, you post them to Oracle General Ledger.
Example
Charge transactions to a capital project
In the following example, Project X is a capital project set up to collect costs to build a new clean room. You charge the following supplier invoice and expenditure items to the project:
Account for supplier invoice transactions
You post the supplier invoice transactions from Oracle Payables to Oracle General Ledger before sending them to Oracle Projects. Workflow determines the accounts for the following journal entry for Oracle Payables:
Account for expenditure items entered in Oracle Projects
You also post the following employee labor, employee expense report, and usage transactions for your capital project to Oracle General Ledger from Oracle Projects:
Account for a capitalizable adjustment
After reviewing the costs, you determine that you cannot capitalize the building permit penalty. You change the transaction from capitalizable to non-capitalizable. Oracle Projects interfaces the supplier invoice adjustments to Oracle Payables when you run the Distribute Supplier Invoice Adjustment process. Oracle Payables posts the reversing entry for the adjustment to Oracle General Ledger. (You originally posted the invoice to Oracle General Ledger as part of the 7,700 supplier invoice transactions.)
In this example, after you post these transactions, the total amount in Oracle General Ledger for the CIP-Clean Room account is 9,205.00.
Accounting for Asset Costs
Each asset line created by the Generate Asset Lines process has an associated general ledger account. After you capitalize (place in service), send, and post the asset line to Oracle Assets, you can run the Create Journal Entries process in Oracle Assets to create a journal entry to transfer the costs from the CIP account (associated with the asset lines) to the asset cost account (determined by the asset category assigned to the asset).
In the example of Project X, assume the clean room is complete and ready to be placed in service. You capitalize and send the CIP costs for Project X to Oracle Assets. Oracle Assets creates the following journal entry after you post the asset:
See Also
Overview of AutoAccounting
Asset Accounting Oracle Assets User's Guide
