Here is a quick summary of steps to convert legacy CIP costs on capital projects and capitalize them into assets. The instructions are applicable to both: Oracle EBS 11i and R12. This article assumes that you have already configured all prerequisites in your Oracle Project Costing and Fixed Assets. You will need Project Costing Super User and Fixed Assets Manager responsibilities, or the customized versions there of.
Define Capital Projects
Let’s start with defining the project template. This is where you can leverage a lot of good Oracle functionality to your benefit. The details will vary in every instance, but in general, you need to complete the following steps:
PA1: Define Capital Project Template – Header
Navigate to Setup > Project > Project Templates to create a new template. Define the header-level information including the Number, Name, Project Type (make sure it is a Capital project type class – you won’t be able to change it later), Organization, and Description. If you want project created from this template to have a fixed duration (e.g. 12 months), define the Trans Duration. The system will populate the Project Finish dates based on the Project Start date and this duration for new projects.
PA2: Define Capital Project Template – Quick Entry Fields
Click on Setup Quick Entry. Define the fields for quick entry of projects. These are the “bare minimum fields” to enter when you copy a template into a project.
PA3: Define Capital Project Template – Tasks
Click on the blue box next to the Tasks option (I know, it not very intuitive), or click on Detail (while the cursor is on Tasks). Define your tasks, or work breakdown structure (WBS). Also determine which tasks should be capitalizable or not, i.e. can collect CIP costs to become fixed assets.
PA4: Define Capital Project Template – Define Project Assets
In this step, you can pre-define fixed assets you anticipate to complete as part of projects created from this template. Basically, you do here what you’d normally do in FA Mass Additions. You can use the Create Project Assets DataLoad to upload a higher volume of assets…
PA5: Define Capital Project Template – Assign Project Assets
Depending on your implementation approach, you assign default assets at project or task level. This functionality determines how the capitalizable expenditures will be assigned to future assets. In order to automate this, you probably want to assign assets at the task level so that you have one-to-one relationship between the costs and the assets in your tasks. The other options would be the costs in multiple tasks to be summarized into one asset at the project level… Refer to the Asset Summary and Detail Grouping Options in the Oracle Project Costing User Guide. You can use the Create Task Level Asset Assignments.
PA6: Define Capital Project Template – Create Task Transaction Controls
Following the example of the task-level asset assignment we defined in step PA5 above, it is critical, that the right CIP costs get collected in the right tasks. In other words, we want building-related costs be collected in building-specific task to capitalize them into a building asset assigned to the same task. To prevent invalid entries, you can create Transaction Controls. These are, basically, conditions that determine what expenditure types or categories are allowed in what projects or tasks. Again, use this sample Create Task Transaction Controls DataLoad to prepare and execute your upload. The trick will be finding the right tasks based on their WBS level. And one note about the Transaction Controls: make sure the Control Start Date and End Date are consistent with your Task Start Date and Finish Date.
PA6: Define Capital Project Template – Set Task-Level Capitalizable Flag
This is an optional step, and this should be taken care of by your Transaction Controls. However, you can make all expense tasks non-capitalizable by setting the Capitalizable flag to null… You can use this Update Expense Task Capitalizable Flag DataLoad.
PA7: Create Projects
Using the template created in steps PA1-6, create your capital projects. The quick entry fields will vary depending on your template, but as always, you can use the Create Projects DataLoad.
PA8: Upload Legacy CIP Costs
Depending on your conversion strategy, you can use a custom conversion program, or WebADI spreadsheet to upload your legacy CIP costs. Check this article for detail on how to convert legacy costs and how to resolve a couple of “features” during the Transaction Import.
PA9: Update the Project Status Inquiry Amounts
As Project Costing Super User, run the PRC: Update Project Summary Amounts
PA10: Complete Asset Definitions
Based on your implementation strategy and business process, you might be required to complete asset definitions in Projects before asset lines can be generated and interfaced to Oracle Assets. As Project Costing Super User, navigate to Capitalization > Capital Projects. Query up your project(s), click on Assets > Asset Details. Complete the asset definitions, just like you would in the Prepare Mass Additions.
PA11: Generate Asset Lines
As Project Costing Super User, run the PRC: Generate Asset Lines for a Range of Projects process. Watch the Date In Service parameter and PA Date parameter to make sure you select the right lines to generate.
PA12: Interface Asset Lines to Assets
As Project Costing Super User, run the PRC: Interface Assets to Oracle Assets process. It will create mass additions in FA MASS ADDITIONS table.
FA13: Post Mass Additions
If you required complete asset definition in Projects, your mass additions are ready to be posted. If asset lines are incomplete, you need to complete them in Prepare Mass Additions. In any case, once ready, log in as Fixed Assets Manager and navigate to Mass Additions > Post Mass Additions to create assets.
At this point, your legacy CIP costs were capitalized into fixed assets. Obviously, this summary is simplified; refer to the Oracle Project Costing User Guide and Oracle Assets User Guide for more details.