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Accounting for Usage Costs

Usage Cost Account Function

When you run the PRC: Distribute Usage and Miscellaneous Costs process, Oracle Projects uses the Usage Cost Account transactions to debit an expense account for raw usages costs.

The Usage Cost Account function consists of the following transactions:

All Usages

Capital, All

Capital, Private, Capital

Capital, Private, Non-Capital

Capital, Public, Capital

Capital, Public, Non-Capital

Contract, All

Indirect, All

Indirect, Private Usages

Indirect, Public Usages

Private, Billable Usages

Private, Non-Billable Usages

Public, Billable Usages

Public, Non-Billable Usages

Since Fremont's chart of accounts accounts for all usage costs in the same way, regardless of the type of project, Fremont's accounting department enables only the All Usages transaction.
Usages costs are posted to the organization that owns the non-labor resource; expenditure type determines which expense account AutoAccounting debits.
Fremont Corporation charges usages costs to one of three expense accounts, depending upon the expenditure type:
·	Computer Expense (5400)
·	Vehicle and Equipment Expense (5401)
·	Other Asset Expense (5402)
To implement the Usage Cost Account function, Fremont defines three rules:
·	One rule to find the company of the resource organization
·	One rule to find the cost center of the resource organization
·	One rule to determine the expense account based on expenditure type
Fremont defines a lookup set to map expenditure types to the appropriate expense account. Fremont uses the lookup set to define the expense account rule. Fremont uses existing lookup sets to define the other two rules.
Define a Lookup Set:
*Name*		Usage to Expense
*Description*		Map the expenditure type for a usage item to the appropriate expense account
Segment Value Lookups
*Intermediate Value (Expenditure Type)*			*Segment Value (Account Code)*
Computer Services			5400
Vehicle			5401
Field Equipment			5401
Other Asset			5402
Define a Rule to Determine Company Segment Value:
*Name*			Resource Company
*Description*			Find the company of the non-labor resource owning organization
*Intermediate Value Source*			Parameter
*Parameter Name*			Non-Labor Resource Org
*Segment Value Source*			Segment Value Lookup Set
*Lookup Set*			Organization to Company
Define a Rule to Determine Cost Center Segment Value:
*Name*			Resource Cost Center
*Description*			Find the cost center of the non-labor resource owning organization
*Intermediate Value Source*			Parameter
*Parameter Name*			Non-Labor Resource Org.
*Segment Value Source*			Segment Value Lookup Set
*Lookup Set*			Organization to Cost Center
Define a Rule to Determine Account Segment Value:
*Name*			Usage Costs
*Description*			Map usage items to cost accounts using the usage expenditure type
*Intermediate Value Source*			Parameter
*Parameter Name*			Expenditure Type
*Segment Value Source*			Segment Value Lookup Set
*Lookup Set*			Usage to Expense
Enable the All Usages Transaction and Assign Rules:
*Function Name:*			Usage Cost Account
*Transaction Name:*			All Usages
Segment Rule Pairings
*Number*		*Segment Name*		*Rule Name*
0		Company		Resource Company
1		Cost Center		Resource Cost Center
2		Account		Usage Costs

Usage Cost Clearing Account Function

When you run the PRC: Interface Usage and Miscellaneous Costs to General Ledger process, Oracle Projects credits an asset usages liability account to balance the usages expense account it debits when you run the PRC: Distribute Usage and Miscellaneous Costs process. The process then transfers both the liability credits and the expense debits to the Oracle General Ledger interface tables so you can post them to the general ledger.

The Usage Cost Clearing Account function consists of the following transactions:

Clearing Account

Oracle Projects uses the Clearing Account transaction to determine which account to credit for asset usage liabilities.

Fremont Corporation uses one liability account to record asset usage liabilities:

· Asset Usage Clearing (2300)

To implement the Usage Cost Clearing Account function, Fremont defines a rule to supply an account code for the Account segment of its Accounting Flexfield. The asset usage liability account is always 2300 since Fremont uses only one account in its chart of accounts.

Fremont uses existing rules to supply values for the Company and Cost Center segments of its Accounting Flexfield.

Define a Rule to Determine Account Segment Value:

Name Usage Clearing

Description Usage clearing liability account

Intermediate Value Source Constant

Constant 2300

Segment Value Source Intermediate Value

Enable the Clearing Account Transaction and Assign Rules:

Function Name: Usage Cost Clearing Account

Transaction Name: Clearing Account

Segment Rule Pairings

Number Segment Name Rule Name

0 Company Resource Company

1 Cost Center Resource Cost Center

2 Account Usage Clearing

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Fremont Corporation uses one liability account to record asset usage liabilities:
·	Asset Usage Clearing (2300)
To implement the Usage Cost Clearing Account function, Fremont defines a rule to supply an account code for the Account segment of its Accounting Flexfield. The asset usage liability account is always 2300 since Fremont uses only one account in its chart of accounts.
Fremont uses existing rules to supply values for the Company and Cost Center segments of its Accounting Flexfield.
Define a Rule to Determine Account Segment Value:
*Name*			Usage Clearing
*Description*			Usage clearing liability account
*Intermediate Value Source*			Constant
*Constant*			2300
*Segment Value Source*			Intermediate Value
Enable the Clearing Account Transaction and Assign Rules:
*Function Name:*			Usage Cost Clearing Account
*Transaction Name:*			Clearing Account
Segment Rule Pairings
*Number*		*Segment Name*		*Rule Name*
0		Company		Resource Company
1		Cost Center		Resource Cost Center
2		Account		Usage Clearing