Project Costing Fundamentals 1 - Instructors Guide

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R12.x Oracle Project CostingFundamentals

Instructor Guide

D60115GC10

Edition 1.0

February 2010

D65241



Copyright © 2010, Oracle. All rights reserved.

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Author

Debjit Nag

Technical Contributors and Reviewers

Ivy Farren, Mayank Khandelwal, Ruth Kukla, Erin Moss

This book was published using: Oracle Tutor



Copyright © Oracle 2010. All rights reserved.

R12.x Oracle Project Costing Fundamentals Table of Contentsi

Table of Contents

Overview of Oracle Project Costing...............................................................................................................1-1 Overview of Oracle Project Costing..............................................................................................................1-3 Objectives ......................................................................................................................................................1-4

Agenda...........................................................................................................................................................1-5 Oracle Enterprise Project Management Solution...........................................................................................1-6 Oracle Project Costing and Integration..........................................................................................................1-7 Agenda...........................................................................................................................................................1-11 Oracle Project Costing and Project Classes...................................................................................................1-12 Overview of Resources In Oracle Projects ....................................................................................................1-13 Costing Flow .................................................................................................................................................1-15 Collect and Manage All Costs .......................................................................................................................1-17 Manage Costs ................................................................................................................................................1-18 View Accounting: Transaction Details..........................................................................................................1-20 View Accounting: Final Subledger Accounting Entries................................................................................1-21 View Expenditure Item Details .....................................................................................................................1-22 Summary........................................................................................................................................................1-23 Quiz ...............................................................................................................................................................1-24

Defining Projects for Costing .........................................................................................................................2-1 Defining Projects for Costing........................................................................................................................2-3 Objectives ......................................................................................................................................................2-4 Agenda...........................................................................................................................................................2-5 Overview of Projects and Tasks ....................................................................................................................2-6 Project Classes and Project Types .................................................................................................................2-7 Overview of Project Templates .....................................................................................................................2-8 Organizing a Project Structure.......................................................................................................................2-9 Basic Project Information..............................................................................................................................2-10 Quiz ...............................................................................................................................................................2-12 Agenda...........................................................................................................................................................2-14 Burden Schedules for Costing .......................................................................................................................2-15

Organization Overrides..................................................................................................................................2-16 Project Currency............................................................................................................................................2-17 Currencies and Expenditures.........................................................................................................................2-18 Costing Currency Options .............................................................................................................................2-19 Quiz ...............................................................................................................................................................2-20 Agenda...........................................................................................................................................................2-21 Controlling Expenditures Overview..............................................................................................................2-22 Project Statuses..............................................................................................................................................2-23 Task Chargeable Status .................................................................................................................................2-24 Transaction Dates ..........................................................................................................................................2-25 Transaction Controls......................................................................................................................................2-26 Exclusive and Inclusive Transaction Controls...............................................................................................2-28 Allowable Charges for Each Transaction Control .........................................................................................2-29 Determining if an Item is Chargeable............................................................................................................2-30 Quiz ...............................................................................................................................................................2-31 Summary........................................................................................................................................................2-32

Overview of Budgetary Controls, Budget Integration and Core Budgeting .......... ........... ........... ........... ...3-1 Overview of Budgetary Controls, Budget Integration and Core Budgeting ..................................................3-3 Objectives ......................................................................................................................................................3-4 Agenda...........................................................................................................................................................3-5 Overview of Budgetary Controls...................................................................................................................3-6 Budgetary Control Settings: Time Intervals ..................................................................................................3-7




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Budgetary Control Settings: Control Levels..................................................................................................3-9 Example: Budgetary Control Rollup .............................................................................................................3-10 Entering Budget Amounts for Controlled Budgets........................................................................................3-11 Budget Definition Strategies..........................................................................................................................3-13 Transaction Processing with Controlled Budgets..........................................................................................3-14 Overview of the Budgetary Control Process Flow ........................................................................................3-16 Viewing Budgetary Control Results..............................................................................................................3-18 Maintaining Budgetary Control Balances......................................................................................................3-19 Budgetary Controls Cross Charge Restriction...............................................................................................3-20 Quiz ...............................................................................................................................................................3-21 Agenda...........................................................................................................................................................3-24 Overview of Budget Integration ....................................................................................................................3-25 Generating Accounting for Integrated Budgets .............................................................................................3-26 Accounting Event Model Overview ..............................................................................................................3-28 Budget Check Funds Processing Overview...................................................................................................3-31 Creating a Baseline for an Integrated Budget................................................................................................3-33 Budget Integration Workflow........................................................................................................................3-35 Reviewing and Overriding Budget Account Details......................................................................................3-36 Viewing Encumbrance and Budget Subledger Accounting...........................................................................3-37 Quiz ...............................................................................................................................................................3-38 Agenda...........................................................................................................................................................3-39

Top-Down Budget Integration.......................................................................................................................3-40 Top-Down Budget Integration Procedures ....................................................................................................3-41 Encumbrance Accounting Example...............................................................................................................3-43 Creating Project Budgets for Top-Down Budget Integration ........................................................................3-46 Maintaining the Project Budget.....................................................................................................................3-47 Year-End Processing .....................................................................................................................................3-49 Agenda...........................................................................................................................................................3-50 Bottom-Up Budget Integration......................................................................................................................3-51 Bottom-Up Budget Integration Procedures ...................................................................................................3-52 Agenda...........................................................................................................................................................3-54 Non-Integrated Budgets with Budgetary Controls Procedures......................................................................3-55 Agenda...........................................................................................................................................................3-56 Budgeting Implementation Steps...................................................................................................................3-57

Define Additional Core Budgeting Setup......................................................................................................3-58 Implementing Budgetary Controls ................................................................................................................3-59 Budgetary Controls: Enable Budgetary Controls and Encumbrance Accounting .........................................3-60 Budgetary Controls: Define Profile Options..................................................................................................3-61 Budgetary Controls: Define Control Levels and the Time Interval...............................................................3-62 Budgetary Controls: Create an Initial Budget................................................................................................3-64 Budgetary Controls: Adjust Default Control Levels .....................................................................................3-65 Implementing Budget Integration..................................................................................................................3-67 Budget Integration: Define the Project Budget Account Generation Workflow ...........................................3-68 Budget Integration: Define Profile Options...................................................................................................3-70 Budget Integration: Implement Top-Down Integration.................................................................................3-71 Budget Integration: Implement Bottom-Up Integration ................................................................................3-73 Quiz ...............................................................................................................................................................3-74 Summary........................................................................................................................................................3-75

Entering Expenditures ....................................................................................................................................4-1 Entering Expenditures ...................................................................................................................................4-3 Objectives ......................................................................................................................................................4-4 Agenda...........................................................................................................................................................4-5 Costing Flow: Enter Expenditures.................................................................................................................4-6 Expenditures Overview .................................................................................................................................4-7 Multiple Organization Access Control (MOAC)...........................................................................................4-8 Expenditures Overview .................................................................................................................................4-9




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Currency Fields for Expenditures..................................................................................................................4-11 Pre-Approved Batch Expenditure Entry Flow Overview ..............................................................................4-12 Statuses for Pre-Approved Expenditure Batches...........................................................................................4-13 Enter Pre-Approved Batches .........................................................................................................................4-14 Submitting an Expenditure Batch..................................................................................................................4-16 Reversing an Expenditure Batch ...................................................................................................................4-17 Correcting Expenditure Batches ....................................................................................................................4-18 Copying an Expenditure Batch......................................................................................................................4-20 Reviewing Project Expenditures....................................................................................................................4-21 Viewing Accounting Lines............................................................................................................................4-24 Quiz ...............................................................................................................................................................4-25 Agenda...........................................................................................................................................................4-27 Automatically Reversing Expenditure Batches .............................................................................................4-28 Releasing the Batch .......................................................................................................................................4-29 GL Periods for the Expenditure Items ...........................................................................................................4-30 Agenda...........................................................................................................................................................4-31 Upload Expenditure Batches from Microsoft Excel......................................................................................4-32 Upload Contingent Worker Timecards..........................................................................................................4-34 Quiz ...............................................................................................................................................................4-36 Agenda...........................................................................................................................................................4-37 Expenditure Batch Reports ............................................................................................................................4-38

Quiz ...............................................................................................................................................................4-39 Agenda...........................................................................................................................................................4-40 Costing Flow: Import Transactions ...............................................................................................................4-41 Overview of Transaction Sources..................................................................................................................4-42 Overview of Transaction Import ...................................................................................................................4-43 Resolving Import Exceptions ........................................................................................................................4-44 Quiz ...............................................................................................................................................................4-45 Correcting Rejected Transactions within Oracle Project Costing..................................................................4-46 Summary........................................................................................................................................................4-48

Implementing Expenditures ...........................................................................................................................5-1 Implementing Expenditures...........................................................................................................................5-3 Objectives ......................................................................................................................................................5-4 Expenditures Implementation Steps ..............................................................................................................5-5 Agenda...........................................................................................................................................................5-6 Expenditure Categories..................................................................................................................................5-7 Define Revenue Categories ...........................................................................................................................5-8 Define Units...................................................................................................................................................5-9 Expenditure Type Classes..............................................................................................................................5-10 Define Expenditure Types.............................................................................................................................5-12 Multiple Expenditure Type Classes Per Expenditure Type ...........................................................................5-14 Quiz ...............................................................................................................................................................5-15 Agenda...........................................................................................................................................................5-17 Transaction Control Extension ......................................................................................................................5-18 Quiz ...............................................................................................................................................................5-19 AutoApproval Extension ...............................................................................................................................5-20 Agenda...........................................................................................................................................................5-21

Define Transaction Sources...........................................................................................................................5-22 Example Predefined Transaction Sources .....................................................................................................5-23 Example Predefined Transaction Sources: Manufacturing and Inventory.....................................................5-24 Quiz ...............................................................................................................................................................5-26 Agenda...........................................................................................................................................................5-27 Listings..........................................................................................................................................................5-28 Summary........................................................................................................................................................5-29

Performing Cost Processing............................................................................................................................6-1 Performing Cost Processing ..........................................................................................................................6-3




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Objectives ......................................................................................................................................................6-4 Agenda...........................................................................................................................................................6-5 Overview of Costing......................................................................................................................................6-6 Costing Concepts...........................................................................................................................................6-9 Overview of Encumbrance Accounting.........................................................................................................6-10 Quiz ...............................................................................................................................................................6-12 Agenda...........................................................................................................................................................6-13 Costing Flow: Distribute Costs......................................................................................................................6-14 Cost Distribution Processing Flow ................................................................................................................6-15 Determining Costs.........................................................................................................................................6-16 Quiz ...............................................................................................................................................................6-18 Burden Cost Calculations ..............................................................................................................................6-19 AutoAccounting: Distribution Programs.......................................................................................................6-20 Cost Distribution Concurrent Programs ........................................................................................................6-21 Agenda...........................................................................................................................................................6-23 Costing Flow: Create Accounting .................................................................................................................6-24 Integration with Oracle Subledger Accounting .............................................................................................6-25 Generating Cost Accounting Events..............................................................................................................6-26 AutoAccounting: Generate Accounting Events.............................................................................................6-27 Creating and Transferring Accounting ..........................................................................................................6-28 Oracle General Ledger Journal Import ..........................................................................................................6-29

Quiz ...............................................................................................................................................................6-30 Agenda...........................................................................................................................................................6-31 Streamline Processes .....................................................................................................................................6-32 Submitting Streamline Processes...................................................................................................................6-34 Agenda...........................................................................................................................................................6-35 Overview of Period Processing .....................................................................................................................6-36 Control of GL Period Statuses for Project Transactions................................................................................6-37 Transaction Accounting Methods..................................................................................................................6-38 Period End Date Accounting .........................................................................................................................6-39 Expenditure Item Date Accounting ...............................................................................................................6-41 Expenditure Item Date Accounting with Common Accounting Periods .......................................................6-43 Sweeping Transaction Accounting Events ....................................................................................................6-45 Quiz ...............................................................................................................................................................6-47

Summary........................................................................................................................................................6-48 Accounting for Costs .......................................................................................................................................7-1

Accounting for Costs.....................................................................................................................................7-3 Objectives ......................................................................................................................................................7-4 Agenda...........................................................................................................................................................7-5 Overview of Accounting for Costs................................................................................................................7-6 AutoAccounting ............................................................................................................................................7-7 AutoAccounting Rules ..................................................................................................................................7-8 AutoAccounting Rule Mapping.....................................................................................................................7-9 Constant Value ..............................................................................................................................................7-10 Parameter Value ............................................................................................................................................7-11 SQL Select Statement Value .........................................................................................................................7-12 Lookup Sets...................................................................................................................................................7-13

Selecting a Segment Value Source ................................................................................................................7-15 Assign Rules..................................................................................................................................................7-16 Quiz ...............................................................................................................................................................7-18 Agenda...........................................................................................................................................................7-19 AutoAccounting for Costs Implementation Steps .........................................................................................7-20 Accounting for Labor Costs...........................................................................................................................7-21 Accounting for Expense Report Costs...........................................................................................................7-22 Accounting for Usage Costs ..........................................................................................................................7-23 Accounting for Miscellaneous Costs .............................................................................................................7-24




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Accounting for Burden Transactions.............................................................................................................7-25 Accounting for Total Burdened Cost.............................................................................................................7-26 Accounting for WIP and Inventory Costs......................................................................................................7-27 Accounting for Supplier Cost Adjustments ...................................................................................................7-29 Listings..........................................................................................................................................................7-31 Quiz ...............................................................................................................................................................7-32 Agenda...........................................................................................................................................................7-33 Account Generator.........................................................................................................................................7-34 Account Generator Terminology...................................................................................................................7-36 Implementing Accounting for Project-Related Supplier Costs and Expense Reports ...................................7-37 Quiz ...............................................................................................................................................................7-39 Agenda...........................................................................................................................................................7-40 Encumbrance Accounting and Project Budgets.............................................................................................7-41 Project Budget Account Generation Workflow.............................................................................................7-42 Quiz ...............................................................................................................................................................7-43 Agenda...........................................................................................................................................................7-44 Overview of Oracle Subledger Accounting...................................................................................................7-45 Integration with Oracle Subledger Accounting .............................................................................................7-46 Accounting Event Model Overview ..............................................................................................................7-47 Quiz ...............................................................................................................................................................7-49 Agenda...........................................................................................................................................................7-50

Oracle Subledger Accounting for Costs Implementation Steps.....................................................................7-51 Oracle Subledger Accounting for Costs Implementation Steps (continued) .................................................7-52 Sources and Custom Sources.........................................................................................................................7-53 Journal Entry Methods and Definitions .........................................................................................................7-54 Associating Subledger Accounting Methods and Ledgers ............................................................................7-56 Post-Accounting Programs ............................................................................................................................7-57 Cross-Entity Balancing Rules........................................................................................................................7-59 Oracle Subledger Accounting Inquiries.........................................................................................................7-60 Audit Reports.................................................................................................................................................7-61 Summary........................................................................................................................................................7-62

Implementing Non-Labor Costing.................................................................................................................8-1 Implementing Non-Labor Costing.................................................................................................................8-3 Objectives ......................................................................................................................................................8-4 Agenda...........................................................................................................................................................8-5 Implementing Non-Labor Costing.................................................................................................................8-6 Non-Labor Costing Implementation Steps ....................................................................................................8-7 Defining Non-Labor Resources.....................................................................................................................8-8 Non-Labor Cost Rates ...................................................................................................................................8-9 Non-Labor Cost Rate Overrides ....................................................................................................................8-10 Agenda...........................................................................................................................................................8-11 Listings..........................................................................................................................................................8-12 Quiz ...............................................................................................................................................................8-13 Summary........................................................................................................................................................8-15

Implementing Labor Costing..........................................................................................................................9-1 Implementing Labor Costing.........................................................................................................................9-3 Objectives ......................................................................................................................................................9-4 Agenda...........................................................................................................................................................9-5 Labor Costing Implementation Steps ............................................................................................................9-6 Define Labor Costing Multipliers..................................................................................................................9-7 Quiz ...............................................................................................................................................................9-8 Labor Costing Rules ......................................................................................................................................9-9 Quiz ...............................................................................................................................................................9-11 Rate Schedules...............................................................................................................................................9-12 Assign Costing Rules and Rate Schedules ....................................................................................................9-14 Labor Costing Overrides ...............................................................................................................................9-16




R12.x Oracle Project Costing Fundamentals Table of Contentsvi

Labor Costing Extension ...............................................................................................................................9-17 Labor Transaction Extension.........................................................................................................................9-18 Implement Overtime Processing....................................................................................................................9-20 Overtime Calculation Extension....................................................................................................................9-22 Quiz ...............................................................................................................................................................9-23 Agenda...........................................................................................................................................................9-24 Listings..........................................................................................................................................................9-25 Summary........................................................................................................................................................9-26

Implementing Burden Costing .......................................................................................................................10-1 Implementing Burden Costing.......................................................................................................................10-3 Objectives ......................................................................................................................................................10-4 Agenda...........................................................................................................................................................10-5 Overview of Burdening .................................................................................................................................10-6 Burden Costing Terminology........................................................................................................................10-7 Storing Burden Cost Calculations .................................................................................................................10-8 Accounting for Burden Costs ........................................................................................................................10-9 Project Types and Burdening.........................................................................................................................10-11 Quiz ...............................................................................................................................................................10-13 Agenda...........................................................................................................................................................10-14 Burden Costing Implementation Steps ..........................................................................................................10-15 Cost Bases and Cost Base Types ...................................................................................................................10-16 Burden Cost Codes........................................................................................................................................10-17 Burden Structures ..........................................................................................................................................10-18 Burden Schedule Types and Burden Schedules.............................................................................................10-22 Assigning Burden Multipliers........................................................................................................................10-23 Defining Burden Schedules ...........................................................................................................................10-25 Assigning Burden Schedules .........................................................................................................................10-27 Burden Costing Extension .............................................................................................................................10-28 Reporting Separate Burden Transactions with Source Resources .................................................................10-29 Accounting for Cost Adjustments Resulting from Burden Schedule Revisions............................................10-31 Accounting for Cost Adjustments Example 1: Total Burdened Costs without Incremental Transactions ....10-32 Accounting for Cost Adjustments Example 2: Total Burdened Costs with Incremental Transactions .........10-34 Accounting for Cost Adjustments Example 3: Summarized Burden Cost Components without IncrementalTransactions...................................................................................................................................................10-36 Accounting for Cost Adjustments Example 4: Summarized Burden Cost Components with IncrementalTransactions...................................................................................................................................................10-38 Quiz ...............................................................................................................................................................10-40 Agenda...........................................................................................................................................................10-43 Burden Calculation in Costing Programs ......................................................................................................10-44 Concurrent Programs: Total Burdened Cost Accounting ..............................................................................10-47 Concurrent Programs: Account for Summarized Burden Cost Components.................................................10-48 Maintenance Concurrent Programs ...............................................................................................................10-49 Quiz ...............................................................................................................................................................10-50 Summary........................................................................................................................................................10-51

Performing Cost Adjustments........................................................................................................................11-1 Performing Cost Adjustments........................................................................................................................11-3 Objectives ......................................................................................................................................................11-4 Agenda...........................................................................................................................................................11-5 Adjusting Expenditure Items.........................................................................................................................11-6 Adjustments to Imported Transactions..........................................................................................................11-7 Project Status and Adjustments .....................................................................................................................11-9 Recalculate Burden Cost................................................................................................................................11-10 Recalculate Raw Cost....................................................................................................................................11-11 Change Work Type........................................................................................................................................11-12 Change Comment ..........................................................................................................................................11-13 Split Item .......................................................................................................................................................11-14




R12.x Oracle Project Costing Fundamentals Table of Contentsvii

Transfer Item .................................................................................................................................................11-15 Change Currency Attributes ..........................................................................................................................11-16 Adjustments to Multi-Currency Transactions................................................................................................11-17 Adjustments to Supplier Costs.......................................................................................................................11-18 Mass Adjustments..........................................................................................................................................11-20 Correct Approved Expenditure Items ............................................................................................................11-22 Processing Adjustments.................................................................................................................................11-24 Results of Adjustment Processing .................................................................................................................11-26 Quiz ...............................................................................................................................................................11-28 Agenda...........................................................................................................................................................11-32 Audit Reporting for Expenditure Adjustments..............................................................................................11-33 Summary........................................................................................................................................................11-35

Integration with Oracle Purchasing and Oracle Payables...........................................................................12-1 Integration with Oracle Purchasing and Oracle Payables..............................................................................12-3 Objectives ......................................................................................................................................................12-4 Agenda...........................................................................................................................................................12-5 Overview of Supplier Costs...........................................................................................................................12-6 Oracle Purchasing and Oracle Payables (Accrual) ........................................................................................12-7 Oracle Purchasing and Oracle Payables (Cash).............................................................................................12-9 Quiz ...............................................................................................................................................................12-11 Agenda...........................................................................................................................................................12-12 Entering Project-Related Information............................................................................................................12-13 Validating Project Information......................................................................................................................12-15 Budgetary Control Activation........................................................................................................................12-16 Commitment Reporting .................................................................................................................................12-17 Accounting Transactions...............................................................................................................................12-19 Quiz ...............................................................................................................................................................12-21 Agenda...........................................................................................................................................................12-22 Integration with Oracle Purchasing ...............................................................................................................12-23 Documents in Oracle Purchasing...................................................................................................................12-25 Agenda...........................................................................................................................................................12-26 Supplier Costs and Accounting Methods.......................................................................................................12-27 Integration with Oracle Payables (Accrual)...................................................................................................12-28 Integration with Oracle Payables (Cash) .......................................................................................................12-30 Invoices in Oracle Payables...........................................................................................................................12-31 Quiz ...............................................................................................................................................................12-32 Agenda...........................................................................................................................................................12-33 Interfacing Supplier Costs .............................................................................................................................12-34 Payment Control............................................................................................................................................12-36 Predefined Transaction Sources ....................................................................................................................12-37 Predefined Transaction Sources (continued) .................................................................................................12-38 Supplier Cost Audit Report ...........................................................................................................................12-39 Expenditure Inquiry.......................................................................................................................................12-40 Viewing Project Adjustments from the Invoice Workbench.........................................................................12-41 Agenda...........................................................................................................................................................12-43 Managing Subcontractor Payments ...............................................................................................................12-44 Managing Financing and Advances...............................................................................................................12-46

Managing Retainage......................................................................................................................................12-47 Quiz ...............................................................................................................................................................12-49 Agenda...........................................................................................................................................................12-50 Supplier Cost Adjustments Overview............................................................................................................12-51 Restrictions to Supplier Cost Adjustments in Oracle Project Costing...........................................................12-53 Adjusting Project-Related Documents in Oracle Purchasing ........................................................................12-55 Writing Off Receipt Accruals in Oracle Purchasing......................................................................................12-57 Adjusting Project-Related Documents in Oracle Payables............................................................................12-58 Adjusting Supplier Costs for Non-Capital Assets .........................................................................................12-60




R12.x Oracle Project Costing Fundamentals Table of Contentsviii

Manually Adjusting Unmatched Reversing Expenditure Items.....................................................................12-61 Processing Adjustments.................................................................................................................................12-62 Prioritizing Supplier Costs Adjustments........................................................................................................12-64 Accounting for Supplier Cost Adjustments ...................................................................................................12-69 Quiz ...............................................................................................................................................................12-74 Agenda...........................................................................................................................................................12-76 Oracle Purchasing and Oracle Payables Integration Implementation Steps ..................................................12-77 Implementing Oracle Purchasing and Oracle Payables Integration...............................................................12-79 Set Profile Options for Project-Related Documents ......................................................................................12-80 Define the Supplier Invoice Account Generator............................................................................................12-82 Defining a Project-Related Purchasing Transactions Account Generator .....................................................12-83 Specify a Default Supplier Cost Credit Account ...........................................................................................12-84 Define Project-Related Distribution Sets.......................................................................................................12-85 Define Oracle Payables Descriptive Flexfields and Related Profiles ............................................................12-86 Summary........................................................................................................................................................12-87

Integration with Oracle Internet Expenses ........... .......... ........... ........... .......... ........... ........... .......... ........... ...13-1 Integration with Oracle Internet Expenses.....................................................................................................13-3 Objectives ......................................................................................................................................................13-4 Agenda...........................................................................................................................................................13-5 Oracle Internet Expenses ...............................................................................................................................13-6 Expense Report Flow.....................................................................................................................................13-7 Deriving Project Data from Expense Reports................................................................................................13-9 Disconnected Expense Reporting Process.....................................................................................................13-10 Adjusting Expense Reports............................................................................................................................13-11 Quiz ...............................................................................................................................................................13-13 Agenda...........................................................................................................................................................13-15 Integration with Oracle Internet Expenses Implementation Steps.................................................................13-16 Install and Implement Oracle Internet Expenses ...........................................................................................13-17 Set Profile Options for Project-Related Expense Report Entry .....................................................................13-18 Set Profile Options for Project-Related Expense Report Approval ...............................................................13-19 Define the Project Expense Report Account Generator.................................................................................13-21 Define a Project-Related Expense Report Template .....................................................................................13-22 Quiz ...............................................................................................................................................................13-23 Summary........................................................................................................................................................13-25

Integration with Oracle Time & Labor .......... .......... ........... ........... .......... ........... .......... ........... ........... ..........14-1 Integration with Oracle Time & Labor ..........................................................................................................14-3 Objectives ......................................................................................................................................................14-4 Agenda...........................................................................................................................................................14-5 Oracle Time & Labor Overview....................................................................................................................14-6 Disconnected Time Entry ..............................................................................................................................14-7 Collecting and Processing Project-Related Timecards ..................................................................................14-8 Editing Timecards in Oracle Time & Labor..................................................................................................14-10 Contingent Worker Timecards with PO Integration......................................................................................14-11 Quiz ...............................................................................................................................................................14-13 Agenda...........................................................................................................................................................14-15 Integration with Oracle Time & Labor Implementation Steps ......................................................................14-16 Install and Implement Oracle Time & Labor.................................................................................................14-17 Set Profile Options for Project-Related Timecards .......................................................................................14-18 Implement Client Extensions to Route and Approve Timecards...................................................................14-19 Quiz ...............................................................................................................................................................14-20 Summary........................................................................................................................................................14-21

Allocations and AutoAllocations ....................................................................................................................15-1 Allocations and AutoAllocations...................................................................................................................15-3 Objectives ......................................................................................................................................................15-4 Agenda...........................................................................................................................................................15-5




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Overview of Allocations................................................................................................................................15-6 Allocation Terminology ................................................................................................................................15-7 Difference between Allocation and Burdening..............................................................................................15-9 Allocation Rules Implementation Steps ........................................................................................................15-10 Allocation Rules ............................................................................................................................................15-11 Basis Method.................................................................................................................................................15-12 Basis Method - Spread Evenly ......................................................................................................................15-13 Basis Method - Target Percent and Spread Evenly .......................................................................................15-14 Basis Method - Prorate ..................................................................................................................................15-15 Basis Method - Target Percentage and Prorate..............................................................................................15-16 Allocation Rule Definition ............................................................................................................................15-17 Source Definition...........................................................................................................................................15-19 Target Definition ...........................................................................................................................................15-21 Offset Definition............................................................................................................................................15-23 Prorated Basis Method Definition .................................................................................................................15-25 Copy Allocation Rules...................................................................................................................................15-26 Deleting or Modifying Allocation Rules .......................................................................................................15-27 Client Extensions for Allocations..................................................................................................................15-28 Quiz ...............................................................................................................................................................15-30 Agenda...........................................................................................................................................................15-34 Allocating Costs ............................................................................................................................................15-35

Creating Allocation Runs ..............................................................................................................................15-36 Allocation Run Statuses.................................................................................................................................15-37 Deleting Allocation Runs ..............................................................................................................................15-38 Releasing Allocation Runs ............................................................................................................................15-39 Reversing Allocation Runs............................................................................................................................15-40 Quiz ...............................................................................................................................................................15-41 Agenda...........................................................................................................................................................15-42 Overview of AutoAllocations........................................................................................................................15-43 AutoAllocation Rules Implementation Steps.................................................................................................15-46 AutoAllocation Set Definition.......................................................................................................................15-47 Implementing Workflow and Client Extensions for AutoAllocations...........................................................15-49 Quiz ...............................................................................................................................................................15-50 Agenda...........................................................................................................................................................15-51

Submitting an AutoAllocation Set.................................................................................................................15-52 Viewing the Status of AutoAllocation Sets ...................................................................................................15-53 Summary........................................................................................................................................................15-54

Asset Capitalization.........................................................................................................................................16-1 Asset Capitalization.......................................................................................................................................16-3 Objectives ......................................................................................................................................................16-4 Agenda...........................................................................................................................................................16-5 Overview of Asset Capitalization..................................................................................................................16-6 Project-Related Asset Processing Flow .........................................................................................................16-9 Accounting Example .....................................................................................................................................16-10 Quiz ...............................................................................................................................................................16-16 Agenda...........................................................................................................................................................16-18 Project Types for Asset Capitalization ..........................................................................................................16-19

Quiz ...............................................................................................................................................................16-21 Agenda...........................................................................................................................................................16-22 Asset Processing Flow...................................................................................................................................16-23 Specifying Costs............................................................................................................................................16-25 Defining Assets for Capital Projects..............................................................................................................16-27 Streamlining Asset Creation ..........................................................................................................................16-29 Asset Grouping Levels ..................................................................................................................................16-30 Asset Cost Allocation Methods .....................................................................................................................16-31 Specifying an Actual Date in Service or a Retirement Date..........................................................................16-32




R12.x Oracle Project Costing Fundamentals Table of Contentsx

Capital Events................................................................................................................................................16-33 Generating Summary Asset Lines .................................................................................................................16-35 Assigning Asset Lines ...................................................................................................................................16-37 Sending Asset Lines to Oracle Assets ...........................................................................................................16-38 Quiz ...............................................................................................................................................................16-40 Agenda...........................................................................................................................................................16-41 Adjusting Capital Project Costs.....................................................................................................................16-42 Reversing Capitalization of Assets in Oracle Project Costing.......................................................................16-43 Abandoning a Capital Asset in Oracle Project Costing .................................................................................16-45 Agenda...........................................................................................................................................................16-46 Asset Capitalization Implementation Steps ...................................................................................................16-47 Implement Asset Extensions..........................................................................................................................16-48 Define Standard Unit Costs for Asset Cost Allocations ................................................................................16-50 Enable Retirement Cost Processing...............................................................................................................16-51 Define Proceeds of Sale Expenditure Types..................................................................................................16-52 Summary........................................................................................................................................................16-53

Cross Charge....................................................................................................................................................17-1 Cross Charge .................................................................................................................................................17-3 Objectives ......................................................................................................................................................17-4 Agenda...........................................................................................................................................................17-5 Overview of Cross Charge.............................................................................................................................17-6 Cross Charge Terminology............................................................................................................................17-7 Cross Charge Types Example........................................................................................................................17-9 Processing Methods.......................................................................................................................................17-10 Quiz ...............................................................................................................................................................17-11 Agenda...........................................................................................................................................................17-12 Borrowed and Lent Processing......................................................................................................................17-13 Project and Task Setup ..................................................................................................................................17-14 Subledger Accounting Process Flow: Cross Charge .....................................................................................17-16 Borrowed and Lent Accounting.....................................................................................................................17-18 Cross Charge Adjustments ............................................................................................................................17-19 Processing Cross Charge Adjustments ..........................................................................................................17-21 Quiz ...............................................................................................................................................................17-23 Agenda...........................................................................................................................................................17-25 Borrowed and Lent Cross Charge Processing Implementation Steps............................................................17-26 Transfer Price Rules ......................................................................................................................................17-27 Transfer Price Schedule.................................................................................................................................17-29 Cross Charge Implementation Options..........................................................................................................17-31 Provider and Receiver Controls for Borrowed and Lent Accounting............................................................17-32 AutoAccounting Rules for Borrowed and Lent Transactions........................................................................17-33 Implement Cross Charge Extensions.............................................................................................................17-34 Quiz ...............................................................................................................................................................17-35 Summary........................................................................................................................................................17-36

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking ........... ...18-1 Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking .....................18-3 Objectives ......................................................................................................................................................18-4 Agenda...........................................................................................................................................................18-5 Integration with Oracle Inventory..................................................................................................................18-6 Integration with Oracle Inventory Flow ........................................................................................................18-7 Miscellaneous Transactions...........................................................................................................................18-8 Launching Transaction Managers..................................................................................................................18-9 Transfer and Import .......................................................................................................................................18-10 Quiz ...............................................................................................................................................................18-11 Agenda...........................................................................................................................................................18-12 Oracle Inventory Integration Implementation Steps......................................................................................18-13 Install and Implement Oracle Inventory ........................................................................................................18-14




R12.x Oracle Project Costing Fundamentals Table of Contentsxi

Enable Project Cost Collection......................................................................................................................18-15 Create a Project-Enabled Transaction Type ..................................................................................................18-16 Create an Inventory Expenditure Type..........................................................................................................18-18 Set Expenditure Type Profile Option.............................................................................................................18-19 Quiz ...............................................................................................................................................................18-21 Agenda...........................................................................................................................................................18-22 Integration with Oracle Project Manufacturing .............................................................................................18-23 Importing Project Manufacturing Costs ........................................................................................................18-24 Transaction Sources.......................................................................................................................................18-25 Transaction Sources (continued) ...................................................................................................................18-26 Quiz ...............................................................................................................................................................18-27 Agenda...........................................................................................................................................................18-28 Integration with Oracle Asset Tracking.........................................................................................................18-29 How Purchase Order Receipts Flow into Project-Related Transactions........................................................18-31 Importing Oracle Asset Tracking Cost ..........................................................................................................18-33 Summary........................................................................................................................................................18-34

Appendix B: Budgetary Controls and Budget Integration .......... .......... ........... ........... ........... ........... ..........19-1 Appendix B: Budgetary Controls and Budget Integration.............................................................................19-3 Objectives ......................................................................................................................................................19-4 Agenda...........................................................................................................................................................19-5 Budgeting Implementation Steps...................................................................................................................19-6 Define Budget Change Reasons ....................................................................................................................19-7 Define Additional Budget Types...................................................................................................................19-8 Define Additional Budget Entry Methods .....................................................................................................19-10 Budget Calculation Extensions......................................................................................................................19-12 Budget Verification Extension ......................................................................................................................19-14 Budget Workflow and Budget Workflow Extension.....................................................................................19-15 Quiz ...............................................................................................................................................................19-16 Agenda...........................................................................................................................................................19-18 Implementing Budgetary Controls ................................................................................................................19-19 Defining Profile Options for Budgetary Controls..........................................................................................19-20 Defining Control Levels and the Time Interval.............................................................................................19-21 Creating an Initial Budget..............................................................................................................................19-23 Adjusting Default Control Levels..................................................................................................................19-25 Quiz ...............................................................................................................................................................19-26 Agenda...........................................................................................................................................................19-27 Implementing Budget Integration..................................................................................................................19-28 Implementing Bottom–Up Integration...........................................................................................................19-29 Implementing Top-Down Integration............................................................................................................19-31 Summary........................................................................................................................................................19-33

Appendix C: Asset Capitalization: Capitalizing Interest.............................................................................20-1 Appendix C: Asset Capitalization: Capitalizing Interest ...............................................................................20-3 Objectives ......................................................................................................................................................20-4 Agenda...........................................................................................................................................................20-5 Overview of Capitalized Interest ...................................................................................................................20-6 Setting Up Capital Projects for Capitalized Interest ......................................................................................20-8 Generating Capitalized Interest Expenditure Batches ...................................................................................20-9 Reviewing Capitalized Interest Expenditure Batches....................................................................................20-10 Inactive Capital Projects Report ....................................................................................................................20-11 Quiz ...............................................................................................................................................................20-12 Agenda...........................................................................................................................................................20-14 Capitalized Interest Implementation Steps ....................................................................................................20-15 Defining Capitalized Interest Rate Names.....................................................................................................20-16 Defining Capitalized Interest Rate Schedules................................................................................................20-19 Specifying Capitalized Interest Rate Schedules for Project Types................................................................20-21 Setting Project Status Controls for Capitalized Interest.................................................................................20-22




R12.x Oracle Project Costing Fundamentals Table of Contentsxii

Implementing the Capitalized Interest Extension..........................................................................................20-23 Quiz ...............................................................................................................................................................20-24 Summary........................................................................................................................................................20-26

Summary of R12.x Project Costing Fundamentals.......................................................................................21-1 Summary of R12.x Project Costing Fundamentals........................................................................................21-3 Objectives ......................................................................................................................................................21-4 Agenda...........................................................................................................................................................21-5

Defining Projects for Costing........................................................................................................................21-6 Expenditures..................................................................................................................................................21-7 Performing Cost Processing ..........................................................................................................................21-8 Accounting for Costs.....................................................................................................................................21-11 Burden Costing..............................................................................................................................................21-12 Integration with Oracle Purchasing and Oracle Payables..............................................................................21-13 Integration with Oracle Internet Expenses.....................................................................................................21-14 Integration with Oracle Time & Labor ..........................................................................................................21-15 Integration with Other Applications ..............................................................................................................21-16 Allocations and AutoAllocations...................................................................................................................21-17 Asset Capitalization.......................................................................................................................................21-18 Asset Capitalization: Capitalized Interest......................................................................................................21-19 Cross Charge .................................................................................................................................................21-20 Budgetary Controls and Budget Integration ..................................................................................................21-21 Agenda...........................................................................................................................................................21-22 Oracle Projects Fundamentals Learning Path................................................................................................21-23 Summary........................................................................................................................................................21-24




R12.x Oracle Project Costing Fundamentals Table of Contentsxiii

Preface

Profile

Before You Begin This Course

• Working experience with project management and project accounting

Prerequisites

• R12.x Oracle E-Business Suite Essentials for Implementers

• R12.x Project Foundation Fundamentals

How This Course Is Organized

This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations

and written practice sessions reinforce the concepts and skills introduced.




R12.x Oracle Project Costing Fundamentals Table of Contentsxiv

Related Publications

Oracle Publications

Title Part Number

Oracle Project Costing User Guide E13438-03

Oracle Projects Implementation Guide E13582-03

Oracle Projects Fundamentals E13581-03

Additional Publications

• System release bulletins

• Installation and user’s guides

• Read-me files

• International Oracle User’s Group (IOUG) articles

• Oracle Magazine




R12.x Oracle Project Costing Fundamentals Table of Contentsxv

Typographic Conventions

Typographic Conventions in Text

Convention Element Example

Bold italic Glossary term (ifthere is a glossary)

The algorithm inserts the new key.

Caps andlowercase

Buttons,check boxes,triggers,windows

Click the Executable button.Select the Can’t Delete Card check box.Assign a When-Validate-Item trigger to the ORD block.Open the Master Schedule window.

Courier new,case sensitive(default islowercase)

Code output,directory names,filenames, passwords, pathnames,URLs,

user input,usernames

Code output: debug.set (‘I”, 300);

Directory: bin (DOS), $FMHOME (UNIX)

Filename: Locate the init.ora file.

Password: User tiger as your password.

Pathname: Open c:\my_docs\projects

URL: Go to http://www.oracle.com

User input: Enter 300

Username: Log on as scott

Initial cap Graphics labels(unless the term is a proper noun)

Customer address (but Oracle Payables)

Italic Emphasized wordsand phrases,titles of books andcourses,variables

Do not save changes to the database.For further information, see Oracle7 Server SQL Language

Reference Manual.

Enter [email protected], where user_id is the

name of the user.

Quotation

marks

Interface elements

with long namesthat have onlyinitial caps;lesson and chaptertitles in cross-references

Select “Include a reusable module component” and click Finish.

This subject is covered in Unit II, Lesson 3, “Working withObjects.”

Uppercase SQL columnnames, commands,functions, schemas,table names

Use the SELECT command to view information stored in theLAST_NAMEcolumn of the EMP table.

Arrow Menu paths Select File > Save.

Brackets Key names Press [Enter].

Commas Key sequences Press and release keys one at a time:[Alternate], [F], [D]

Plus signs Key combinations Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]




R12.x Oracle Project Costing Fundamentals Table of Contentsxvi

Typographic Conventions in Code

Convention Element Example

Caps andlowercase

Oracle Formstriggers

When-Validate-Item

Lowercase Column names,table names

SELECT last_nameFROM s_emp;

Passwords DROP USER scottIDENTIFIED BY tiger;

PL/SQL objects OG_ACTIVATE_LAYER(OG_GET_LAYER (‘prod_pie_layer’))

Lowercaseitalic

Syntax variables CREATE ROLE role

Uppercase SQL commands andfunctions

SELECT useridFROM emp;

Typographic Conventions in Oracle Application Navigation Paths

This course uses simplified navigation paths, such as the following example, to direct youthrough Oracle Applications.

(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve

This simplified path translates to the following:

1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches

Summary.

2. (M) From the menu, select Query then Find.

3. (B) Click the Approve button.

Notations:

(N) = Navigator

(M) = Menu

(T) = Tab

(B) = Button

(I) = Icon

(H) = Hyperlink

(ST) = Sub Tab




R12.x Oracle Project Costing Fundamentals Table of Contentsxvii

Typographical Conventions in Oracle Application Help System Paths

This course uses a “navigation path” convention to represent actions you perform to find pertinent information in the Oracle Applications Help System.

The following help navigation path, for example—

(Help) General Ledger > Journals > Enter Journals

—represents the following sequence of actions:

1. In the navigation frame of the help system window, expand the General Ledger entry.

2. Under the General Ledger entry, expand Journals.

3. Under Journals, select Enter Journals.

4. Review the Enter Journals topic that appears in the document frame of the help system

window.




R12.x Oracle Project Costing Fundamentals Table of Contentsxviii



Copyright © Oracle, 2010. All rights reserved.

Overview of Oracle Project CostingChapter 1 - Page 1

Overview of Oracle ProjectCosting

Chapter 1





Overview of Oracle Project Costing





Objectives





Agenda





Oracle Enterprise Project Management Solution

Oracle Enterprise Project Management Solution

You can use Oracle Project Costing to collect, process, and track costs against projects andtasks. You can enact cost controls and report on costs for all project activities. Oracle ProjectCosting is part of the Oracle Enterprise Project Management solution. Oracle EnterpriseProject Management provides a set of applications that help companies deliver global projects by integrating and managing project information. It enables all persons at all levels of theenterprise to participate in and collaborate on the projects at appropriate levels in a centralizedenvironment. Information is available to the project team through personalized and secure role- based views.





Oracle Project Costing and Integration


Oracle Project Costing imports data from these applications:

• Oracle Asset Tracking - Oracle Asset Tracking enables you to provide users with accessto tracking information, without allowing them access to sensitive processes related toassets and purchasing. You can also track inventory items after you have installed themand link financial transactions to the physical movement of equipment. Oracle AssetTracking enables you to create assets upon receipt in Oracle Purchasing. After you createthe asset, Oracle Asset Tracking performs the changes in the background for any further physical movement. For example, if you move the asset from one location to the other,then Oracle Asset Tracking performs the asset cost, distribution, and unit changes without

manual intervention. Oracle Asset Tracking integrates with Oracle Inventory, OraclePurchasing, Oracle Project Costing, Oracle Assets, and Oracle Payables, and storesinformation collected from them.

• Oracle Internet Expenses - Oracle Internet Expenses enables you to enter project-related expense reports. Once approved, the expense reports are imported into OraclePayables. Oracle Payables creates invoices from the expense reports, maintains payments, and creates subledger accounting entries. In Oracle Project Costing, expensereports are interfaced as actual costs from Oracle Payables.





• Oracle Inventory - You can implement Oracle Inventory to Oracle Project Costingintegration, enabling you to interface costs from Oracle Inventory to Oracle ProjectCosting, without installing Oracle Project Manufacturing. When you enter project–relatedtransactions in Oracle Inventory, you enter the project information on the sourcetransaction. Oracle Inventory and Oracle Project Costing carry the project informationthrough from the Issue To or Receipt From transaction in Oracle Inventory to the project

expenditure in Oracle Project Costing.• Oracle iProcurement - You can enter project-related purchase requisitions using Oracle

iProcurement. After requisition approval, you can AutoCreate a purchase order in OraclePurchasing. Oracle Purchasing copies the project information to the purchase order.

• Oracle Payables - In Oracle Payables, you can match a supplier invoice to an existing purchase order or receiving transaction. Oracle Payables automatically copies the projectinformation from the purchase order distribution lines when you perform the match. Youcan also create non-matched supplier invoices in Oracle Payables and enter invoicedistributions to charge invoice costs to projects. You can use both Oracle Purchasing andOracle Payables, or just Oracle Payables. You can set up Oracle Payables to applydiscounts to payments. After you enter a payment with discounts, you interface the

discounts to Oracle Project Costing. Oracle Payables creates subledger accounting entriesfor project-related supplier costs.

• Oracle Purchasing - When you enter project-related transactions in Oracle Purchasing,you only need to enter project information on the source document; either the requisitionor the purchase order. The Account Generator automatically creates the accountinformation, based on the project-related information you enter. You can also use theBuyer WorkCenter in Oracle Purchasing to enter project-related purchase orders. When a purchase order shipment is flagged to accrue at receipt and the purchased goods aredelivered to an expense destination, you enter a receiving transaction for the purchaseorder in Oracle Purchasing and create subledger accounting for the receiving transactionin final mode. Next, you interface receipt accruals to Oracle Project Costing.

• Oracle Project Manufacturing - Oracle Project Costing acts as a cost repository formanufacturing-related activities from other products in the Oracle Project Manufacturingsuite. Oracle Project Manufacturing is a type of manufacturing environment where large projects drive production requirements. You define the Work Breakdown Structure for amanufacturing project in Oracle Project Costing. You track manufacturing costs by project and task and use Transaction Import to import them into Oracle Project Costing.

• Oracle Time & Labor - Oracle Time & Labor integrates with Oracle Project Costing toenable employees and contingent workers to enter and submit project-related timecards.Employees and contingent workers enter their own time, which you can subject to anapproval process according to your business rules. You can transfer approved timecardsto Oracle Project Costing, Oracle Payroll, and Oracle Human Resources. After youimport the timecards into Oracle Project Costing, you cost the timecards and derive thedefault accounting using AutoAccounting. During cost processing, the raw cost and anyadditional burden cost is calculated. Finally, you generate cost accounting events andcreate accounting for the timecards in Oracle Subledger Accounting.







Oracle Project Costing sends data to these applications:

– Oracle Assets - Using asset capitalization functionality, you can define capital assets andcapture 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 CIPcosts and send the lines to Oracle Assets for posting as fixed assets. You can also defineretirement adjustment assets and capture cost of removal and proceeds of sale amounts(collectively referred to as retirement costs, retirement work–in–process, or RWIP) forassets you are retiring that are part of a group asset in Oracle Assets. When yourretirement 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 depreciationaccounts for the group asset that corresponds to each asset.

– Oracle General Ledger - Oracle Project Costing integrates with Oracle General Ledgervia Oracle Subledger Accounting so that you can update your general ledger with OracleProject Costing activity. You use Oracle Project Costing to collect project cost detailtransactions, and then to generate accounting events that Oracle Subledger Accountinguses to create the accounting. Oracle Subledger Accounting transfers the final accountingentries to Oracle General Ledger.





– Oracle Subledger Accounting - Oracle Subledger Accounting is an intermediate step between each of the subledger applications and Oracle General Ledger. Oracle SubledgerAccounting stores a complete and balanced subledger journal entry in a common datamodel. Oracle Project Costing uses AutoAccounting, or the Project Budget AccountGeneration workflow for integrated budgets, to derive default accounts for transactions.You submit concurrent programs in Oracle Project Costing to generate accounting events

and create accounting entries in Oracle Subledger Accounting. Oracle Project Costing predefines setup in Oracle Subledger Accounting so that it accepts the default accountsthat Oracle Project Costing derives without change. Oracle Subledger Accountingtransfers the final accounting to Oracle General Ledger. If you define your own detailedaccounting rules in Oracle Subledger Accounting, then Oracle Subledger Accountingoverwrites default accounts, or individual segments of accounts, that Oracle ProjectCosting derives using AutoAccounting.





Agenda





Oracle Project Costing and Project Classes

Oracle Project Costing and Project Classes

You can use Oracle Project Costing to collect costs associated with all of your projectactivities.

For example, you can use indirect projects to track costs associated with research anddevelopment, non-billable sales proposal activities, or general overhead operational costs fordepartments such as purchasing or human resources. Capital projects enable you to captureconstruction-in-process (CIP) costs for assets you are creating. You can also use capital projects to capture the cost of removal and proceeds of sale amounts (RWIP) for assets you areretiring. You also can track costs associated with contract projects. In conjunction with OracleProject Billing, you can generate revenue and customer invoices for contract projects. This

enables you to report on both project costs and revenue.For additional discussion regarding contract projects, see the course titled “R12.x ProjectBilling Fundamentals.”





Overview of Resources In Oracle Projects

Overview of Resources in Oracle Projects

Oracle Projects provides a centralized resource pool as part of the core foundation in whichemployees and contingent workers are identified as resources. Each of the applications in theOracle Projects suite utilizes this resource pool differently:

• Oracle Project Costing: Collects project-related timecard and expense report costs forresources. Provides resource cost controls and cross-charging for shared resources.

• Oracle Project Billing: Generates revenue and invoices by billing labor hours on a project.

• Oracle Project Management: Creates a budget for labor costs to plan and manage thefinancial performance of projects throughout the project lifecycle.

• Oracle Project Collaboration: Allows resources to participate as team members forcommunicating progress against assigned tasks by directly accessing the publishedworkplan, and assigns actions to fellow team members so that the ownership and steps toresolution are communicated clearly and consistently.

• Oracle Project Resource Management: Locates the appropriate resources to staff projectrequirements based on competencies and availability. As a resource, you can also searchfor requirements that match your particular skills.





Collecting Resource Costs

Resources can charge time to projects. For labor costs, you can:

• Associate each labor expenditure item with a scheduled work assignment and a work type.

• Maintain labor cost rate schedules by employee or by job.

• Calculate costs based on labor.

• Override labor cost rates for individuals.• Define a method for calculating overtime cost.

• Maintain burden schedules to calculate additional costs of doing business that support theraw costs.

• Report on actual resource utilization based on actual hours from timecards.

• Query expenditure items for specific resources.

Oracle Project Costing integrates with Oracle Time & Labor to capture project-relatedtimecards for resources.

Resources can also charge expenses to projects. Oracle Project Costing integrates with OracleInternet Expenses and Oracle Payables to capture project-related expense reports.

Note: Employees and contingent workers do not have to be schedulable project resources tocharge time and expenses to projects. Optionally, you can use transaction controls to controlcharges to tasks based on the resources assigned to the workplan tasks.

Cross Charge

When projects share resources within an enterprise, it is common to see those resources sharedacross organization and country boundaries. Further, project managers can also divide the workinto multiple projects for easier execution and management. Oracle Project Costing providescross charge features to enable project managers to view the current total costs of the project,regardless of who performs the work or where it is performed.

Project Allocations

You can use the allocations feature to distribute cost amounts between and within projects andtasks, or to projects in other organizational units. You can select resources groups andresources when you define allocation sources and proration basis methods.





Costing Flow

Costing Flow

Oracle Project Costing enables you to track and account for all project costs. You can entertransactions directly into Oracle Project Costing using expenditure batches, import transactionsfrom other Oracle Applications, such as Oracle Time & Labor, or import transactions fromexternal systems.

Costing Flow Example (Labor Cost)

1. Enter or import expenditures - You can enter pre-approved expenditure batches orimport transactions from other Oracle applications or external applications.

2. PRC: Distribute Labor Costs - Calculates the raw and burden cost amounts for labor costexpenditure items and uses AutoAccounting to determine the default debit account for

each expenditure item.

3. PRC: Generate Cost Accounting Events - Uses AutoAccounting to determine thedefault credit account for expenditure items and generates accounting events fordistributed transactions.

4. PRC: Create Accounting - Creates subledger journal entries for eligible accountingevents. You can run the program in either draft or final mode. Optionally, the programcan post journal entries in Oracle General Ledger.





5. PRC: Transfer Journal Entries to GL - When you run the program PRC: CreateAccounting, if you select No for the parameter Transfer to GL, then you run must the program PRC: Transfer Journal Entries to GL to send journal entries to Oracle GeneralLedger.

6. Journal Import (in Oracle General Ledger - Imports the final accounting entries fromOracle Subledger Accounting into Oracle General Ledger.





Collect and Manage All Costs

Collect and Manage All Costs

Oracle Project Costing is an integrated cost management solution for all projects and activitieswithin an enterprise. With Oracle Project Costing you can manage costs across currency andorganizational boundaries. Oracle Project Costing also acts as a central repository of projecttransactions, processes project costs, and creates corresponding accounting.

Methods of Entering Expenditures

You can use pre-approved batches to enter expenditures directly into Oracle Project Costingand Transaction Import to import expenditures into Oracle Project Costing from externalsources. In addition, you can use Microsoft Excel Integration to enter expenditures and thenimport the expenditures into Oracle Project Costing. Oracle Project Costing also integrates

with other Oracle applications. You can collect project-related costs in applications such asOracle Time & Labor, Oracle Purchasing, Oracle Payables, Oracle iProcurement, OracleInventory, Oracle Project Manufacturing, Oracle Asset Tracking, and Oracle InternetExpenses.





Manage Costs

Manage Costs

After you collect costs, you can perform adjustments as needed. You can also use features suchas cross charge, burdening, project allocations, and asset capitalization to further process thecosts. 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 ofadjustments - including correcting approved expenditures, changing the capitalizable or billable status of expenditure items, recalculating raw or burdened costs, splitting expenditureitems, and transferring expenditures to another project.

Cross Charge

A cross charge takes place when the expenditure organization of an expenditure item isdifferent from task owning organization of the task being charged. These organizations arecalled the provider and receiver organizations. The organizations can be within the sameoperating 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 generatingintercompany invoices.





Burdening

Burden costs are costs of doing business that support raw costs. For example, you can define a burden cost code of G&A to burden specific raw costs with general and administrativeoverhead costs. You can create subledger accounting for burden cost and post the accounting toOracle General Ledger.

Project Allocations

The allocations feature in Oracle Project Costing can distribute amounts between and within projects and tasks, or to projects in other organizational units. For example, you can allocateamounts such as salaries or administrative overhead across several projects and tasks.

Your allocations can be as simple or elaborate as you like. You identify the amounts you wantto allocate (source) and then define the targets, the projects and tasks to which you want toallocate the source amounts. Optionally, you can offset the allocations with reversingtransactions. The system gathers source amounts into a source pool, and then allocates to thetargets using the basis method that you specify in the allocation rule. You can use a basismethod of Spread Evenly to divide the source pool amount equally among all the chargeabletarget tasks included in the rule. Alternatively, you could select Prorate as the basis method touse the attributes set in the Basis window.

When you allocate amounts, you create expenditure items whose amounts are derived from oneor more of the following sources:

• Existing summarized expenditure items in Oracle Project Costing

• A fixed amount

• Amounts in an Oracle General Ledger account balance

Asset Capitalization

Using asset capitalization functionality, you can define capital assets and capture construction– in–process (CIP) and expense costs for assets you are creating. When you are ready to placeassets 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 assetsyou are building, installing, or acquiring.

You can also define retirement adjustment assets and capture cost of removal and proceeds ofsale amounts (collectively referred to as retirement costs, retirement work–in–process, orRWIP) for assets you are retiring that are part of a group asset in Oracle Assets. When yourretirement activities are complete, you can generate asset lines for the RWIP amounts and sendthe lines to Oracle Assets for posting as adjustments to the accumulated depreciation accountsfor the group asset that corresponds to each asset.

You can also calculate and record capitalized interest for capital projects. Capitalized interest(also referred to as Allowance for Funds Used During Construction) is an estimate of theinterest cost that enterprises incur when they invest in long–term capital projects. Subject to

accounting rules and regulatory guidelines, enterprises can capitalize interest as part of the totalcost of acquiring and constructing assets that require an extended amount of time to prepare fortheir intended use.





View Accounting: Transaction Details

View Accounting: Transaction Details

From Oracle General Ledger, you can drill down to subledger details from the AccountInquiry, Enter Journals, or View Journals windows for journals that have specific journalsources assigned to them. For example, you can select a labor cost journal entry line with thesource Projects and select the Line Drilldown button to view the details in Oracle SubledgerAccounting. Next you can choose to either view the subledger journal entry or to view thetransaction. When you choose to view the transaction, the system drills down to Oracle ProjectCosting and queries the individual expenditure items that make up the subledger journal entryin expenditure inquiry.

You can also perform inquiries directly in Oracle Subledger Accounting to view transaction

details for accounting events. When you view a transaction for a cost accounting event, OracleSubledger Accounting drills down to Oracle Project Costing and automatically opens andqueries information in expenditure inquiry. Similarly, you can drill down to other subledgerapplications to view transaction information for the accounting events that originated in thoseapplications. In Oracle Subledger Accounting, you can query accounting events, journalentries, and journal entry lines based on multiple selection criteria.





View Accounting: Final Subledger Accounting Entries

View Accounting: Final Subledger Accounting Entries

You can use expenditure inquiry in Oracle Project Costing to view final subledger accountingentries for expenditure items. Use the View Accounting option from the Tools menu to reviewaccounting entries. You must create accounting in final mode for the accounting eventsassociated with the expenditure item to view accounting entries.

Note: For both historical (prior to Release 12) expenditure items not migrated to OracleSubledger Accounting, and transactions accounted in an external system and interfaced intoOracle Project Costing, the View Accounting option displays accounts from the costdistributions table in Oracle Project Costing.





View Expenditure Item Details

View Expenditure Item Details

You can also use expenditure inquiry to view detailed information for each expenditure item.Depending on the expenditure item, you can:

• View cost distribution line information for each expenditure item, including the defaultaccounting entries that Oracle Project Costing derived using AutoAccounting, the PAand GL period, and the accounting event generation status.

• View the revenue distribution lines for billable expenditure items (contract projects).

• Drill down to Oracle Payables if the supplier cost expenditure item was interfaced toOracle Project Costing from Oracle Payables.

• Drill down to the Receipt Transaction Summary window in Oracle Purchasing forreceipt accrual expenditure items.

• Drill down to view purchase order details in Oracle Purchasing for contingent workerlabor cost expenditure items that are associated with a purchase order.





Summary





Quiz

Answer: a, d





Quiz

Answer: b, c





Quiz

Answer: b





Quiz

Answer: a




Defining Projects for CostingChapter 2 - Page 1

Defining Projects for Costing

Chapter 2





Defining Projects for Costing





Objectives





Agenda





Overview of Projects and Tasks

Overview of Projects and Tasks

You can create a project with one structure defined for workplan management purposes andanother defined for financial management purposes, or you can use one structure for both purposes:

• Workplan Management

- The workplan management functionality helps project managers and team membersdeliver projects on time.

• Financial Management

- Financial management functionality helps project and financial administrators andmanagers track billing, costs, budgets, and other financial information for projects.

You can use three predefined project classes that track the following types of information:

• Indirect projects - Track overhead activities and costs.

• Capital projects - Track asset development activities and costs, and costs are capitalizedas one or more assets.

• Contract projects - Contract projects track cost, revenue, and billing.





Project Classes and Project Types

Project Classes and Project Types

Oracle Project Foundation predefines project classes, but you define project types as part ofyour implementation. The project type controls how Oracle Project Foundation creates and processes projects, and is a primary classification for the projects your business manages. Youmust set up at least one project type to create projects. You must set up project types for eachoperating unit.





Overview of Project Templates

Overview of Project Templates

You use project templates to create new projects. When you create a project from a projecttemplate or an existing project, Oracle Project Foundation copies the financial structure fromthe source project or template. Project templates belong to only one operating unit. You canmaintain and copy project templates within an operating unit. However, project templatenumbers are unique across operating units. A project template number cannot duplicate any project or project template number within the installation.

For additional information, see the course titled "R12.x Project Foundation Fundamentals."





Organizing a Project Structure

Organizing a Project Structure

A project financial structure is a task tree showing the organization of project work. It can beas simple or detailed as you want it to be. There are no limits in width or levels. The position ofthe task in the hierarchy determines what you can do with it:

• Top Task

- A task whose parent is the project.

- For example, use top tasks for budgeting and rollup reporting.

• Middle Task

- A task that is not a top task or a lowest task.

- For example, use middle tasks for rollup reporting.• Lowest Task

- A task that is at the bottom of the structure, without any child tasks. A top task canalso be considered a lowest task, if the task does not have any child tasks.

- For example, use lowest tasks for transaction entry, budgeting, and override entry.Expenditures are always charged to a lowest task.





Basic Project Information

Basic Project Information

• Project Name - A short and descriptive name of a project. Use this name to find andidentify a project.

• Long Name - A longer, unique descriptive name for the project. It can be up to 240characters long. The default value is the short name (Name).

• Project Number- A unique identification number of a project. You use this number tofind and identify the project. You can manually enter a project number, or let the systemautomatically generate one for you. For audit trail purposes, you cannot modify a projectnumber after you charge expenditure items, requisitions, purchase orders, or supplierinvoices to the project. If project numbering is automatic, then you cannot modify the

number at any point.• Project Organization - The managing or owning organization of a project. Use the

organization for reporting and AutoAccounting purposes.

• Project Type - The project type determines how Oracle Project Costing processes costs(expenditure items) for a project and provides defaults and controls for project entry and processing. For audit trail purposes, you cannot change a project type after you chargeexpenditure items, requisitions, purchase orders, or supplier invoices to the project.





• Project Status - Indicates the current status of a project.

• Description - A description of the project.

• Public Sector - Use the Public Sector check box to indicate whether a project is a privateor public sector project. Use this for reporting and AutoAccounting purposes.

• Access Level - Access levels control who can search for and view a project. You canspecify one of the following access level values for a project:

- Secured

- Enterprise

• Location - Use project location information to match resource location to work sitelocation (the location of the project). Location includes three attributes:

- City

- Region

- Country





Quiz

Answer: a





Quiz

Answer: b





Agenda





Burden Schedules for Costing

Burden Schedules for Costing

Costing Burden Schedules

The default costing burden schedule for a project comes from its project type. You can enterthe following information in the Costing Burden Schedules window:

• Burden Schedule

- Enter the burden schedule you want to use for this project or task.

• Burden Hierarchy

- Enter the burden hierarchy you want to default to each burden schedule version.

• Fixed Date

- Enter a fixed date for the burden schedule if you want all expenditure items to be burdened with the multipliers in effect as of that date.

For additional discussion regarding burden schedules, see the lesson titled “ImplementingBurden Costing.”





Organization Overrides

Organization Overrides

You can reassign an employee’s or an entire organization’s costs and revenue to a differentorganization for a particular project. When you enter an organization distribution override, thenew organization you enter overrides the expenditure organization Oracle Project Costing usesin AutoAccounting and in burdening. For AutoAccounting processing, if an organizationdistribution override exists, the destination organization of the override is substituted for theactual expenditure organization. You can enter the following information in the OrganizationOverrides window:

• Source Organization - Enter the source organization whose costs and revenue you wantto assign to a different organization.

• Employee Name/Number - Enter the name and number of the employee for this projectwhose costs and revenue you want to assign to a different organization.

• Expenditure Category - The expenditure category for the costs you want to assign to adifferent organization.

• Destination Organization - The new organization to which you want to reassign costsand revenue.





Project Currency

Project Currency

You define a project currency for each project. This currency can differ from the functionalcurrency of the operating unit that owns the project. You can select any active currency definedin Oracle General Ledger.

In a multinational business environment, employees from locations across the world can reportto one operating unit. Therefore, an operating unit can own projects being managed andimplemented from various remote sites. The project managers of these projects need the abilityto 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 thatdiffers from the functional currency of the operating unit owning the project.





Currencies and Expenditures

Currencies and Expenditures

Transaction amounts are stored in the following currencies:

• Transaction Currency

- The currency in which a project transaction occurs.

• Expenditure Functional Currency

- The functional currency of the expenditure operating unit.

• Project Functional Currency

- The functional currency of the operating unit that owns the project.

• Project Currency

- The user–defined project currency.

When you enter transactions in a currency that is different from functional currency or projectcurrency, Oracle Project Costing must convert the transaction amount to the functional and project currencies. To convert transaction currencies, Oracle Project Costing must firstdetermine the exchange rate type and exchange rate date.





Costing Currency Options

Costing Currency Options

When you create a new project, the system copies the default value for the project currencycode from the functional currency defined in the Implementation Options for the project-owning operating unit. You can override the default currency code and enter defaultconversion attributes for the project in the Costing tab of the Currency window. Oracle ProjectCosting displays the attributes you select as the default values during expenditure entry, andalso uses the values for imported transactions.

Project Currency Attribute Hierarchy

To convert transaction currencies to functional and project currencies, Oracle Project Costingmust first determine the exchange rate type and exchange rate date. Each attribute is

determined separately. If Oracle Project Costing finds a rate type in step one, but no rate date is present at that level, then it uses the rate type and then follows the logic to the next level todetermine the rate date. During project and task setup, Oracle Project Costing copies the valuesyou enter to all the underlying tasks in the financial structure.





Quiz

Answer: b





Agenda





Controlling Expenditures Overview

Controlling Expenditures Overview

Oracle Project Costing provides you with many levels of charge controls:

• Project Status - You can use the project status to control whether any charges are allowedfor the project.

• Task Chargeable Status - You can specify a lowest task as chargeable or non–chargeableto control whether any charges are allowed for the task.

• Transaction Dates -You can specify the transaction dates of a lowest task to record thedate range for which charges are allowed for the task. You can also specify transactiondates at the project-level.

• Transaction Controls - You can define transaction controls to specify the types oftransactions that are chargeable or non–chargeable for the project and tasks.





Project Statuses

Project Statuses

When you define a status, the Status Controls region contains a list of actions that are allowedor restricted for each status. To allow charges on a project, you must assign the project a statuswith the status control Create New Transactions enabled. To allow users to adjust transactionon 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 itemto another project, then Oracle Project Costing still creates the reversing expenditure item onthe original project and task.





Task Chargeable Status

Task Chargeable Status

The Allow Charges check box controls whether or not you can charge new expenditure itemsto a task. The default setting is to allow charges for all new tasks. Disable the Allow Chargescheck box if you want to prevent new charges to a task.

Note: This task-level control only affects new transactions. It does not prevent reversals. Forexample, if you disable the option for a task and transfer an existing expenditure item from thattask to a new task, then Oracle Project Costing still creates the reversing expenditure item onthe original task.





Transaction Dates

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 fallsoutside 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 ofthe parent task. The transaction start and finish dates control the transactions that can becharged to the task. You cannot charge an expenditure item to a task if the expenditure itemdate falls outside the task dates. Default values for task transaction dates are the project

transaction dates (for top tasks) or the parent task’s transaction dates (for subtasks).





Transaction Controls

Transaction Controls

Use transaction controls to configure your projects and tasks to allow only charges that youexpect 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 manageyour 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 canspecify 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 costtransactions entered for a supplier not associated with a person, and usage items incurred by anorganization and not a person. If you define transaction controls to list people who can chargeto your project, then Oracle Project Costing allows transactions incurred by those people. Italso allows any supplier cost transactions and usage items incurred by an organization, and anyother transactions that do not require an employee number.





When you enter expense reports in Oracle Payables using suppliers associated with employees,Oracle Project Costing validates the transaction using the person associated with the supplier.For example, if you specify that Donald Gray cannot charge to the project, and you enter anexpense report item for the supplier GRAY, DONALD who is associated with the personDonald Gray, Oracle Project Costing does not allow you to charge the item to the project, because it validates the transaction controls that you have defined.

Scheduled Expenditures Only ControlsWhen Oracle Project Resource Management is installed, you can specify that only employeeswith scheduled work assignments are allowed to charge labor and expense report transactions.

Specifying Billable and Capitalizable Transactions

You can control what transactions for contract projects are non-billable and what transactionsfor capital projects are non-capitalizable when you set the Billable/Capitalizable field. You canchoose between the options of No or Task Level . Select No if you want the charges to be non- billable or non-capitalizable. Select Task Level if you want the billable or capitalizable status todefault from the task to which the item is charged.

Workplan Resources Only Controls

You can control charges to tasks based on the people assigned to the workplan tasks. Forinformation about the validation rules for timecards and expense reports when the Workplan

Resources Only control is set with the other transaction control attributes, see the Oracle

Project Costing User Guide.

Person Type Control

You can select no value, Employee Only, or Contractor Only from the list in the Person Typefield. You can use this control to specify whether transactions incurred by only employees,only contractors (contingent workers), or both are chargeable. For additional information, seethe Oracle Project Costing User Guide.

Specifying Effective Dates for Transaction Controls

You can enter an Effective From and Effective To date for each transaction control record todefine transactions as chargeable for a given date range. You must specify an Effective From date. The default Effective From date is the start date of the project or task. The Effective To date is optional.

Validating Expenditures Against Transaction Controls

Oracle Project Costing checks all levels of transaction controls when you try to charge atransaction to a project. Oracle Project Costing checks the control when you:

• Enter an online or pre-approved expenditure item

• Copy a pre-approved timecard item

• Transfer an expenditure item to a new project or task

• Enter a project-related requisition or purchase order distribution in Oracle Purchasing• Enter a project-related requisition distribution in Oracle iProcurement

• Enter a project-related invoice distribution in Oracle Payables

• Enter a project-related expense report in Oracle Internet Expenses

• Run the concurrent program PRC: Transaction Import to import expenditures





Exclusive and Inclusive Transaction Controls

Exclusive and Inclusive Transaction Controls

Exclusive Transaction Controls

Exclusive transaction controls allow all expenditures except those that are specified as non– chargeable in the transaction controls. Exclusive transaction controls is the default setting.When you use exclusive transaction controls, you specify the non-chargeable criteria. Disablethe Limit to check box on the Transaction Controls window to make your transaction controlsexclusive.

Inclusive Transaction Controls

Inclusive transaction controls limit charges to only those expenditures that meet the specifiedtransaction control criteria. Oracle Project Costing rejects any expenditure that are not listed as

chargeable in the transaction controls. When you use inclusive transaction controls, by default,nothing is chargeable. You must specify the chargeable criteria. Enable the Limit to check boxon the Transaction Controls window to make your transaction controls inclusive.





Allowable Charges for Each Transaction Control

Allowable Charges for Each Transaction Control

You can use transaction controls to specify whether to allow charges, further controlling theallowable charges. You usually select Chargeable when you use inclusive transaction controls.

Transaction Control Extension

To define more complex rules for implementing company-specific expenditure entry policies,you can use the transaction control extension. Some examples of rules that you may define are:

• You cannot charge new transactions to projects for which the work is complete. You canonly transfer items to these projects.

• All entertainment expenses are non-billable.





Determining if an Item is Chargeable

Determining if an Item is Chargeable

Oracle Project Costing checks all levels of chargeability control when you try to charge atransaction to a project. If the expenditure item passes the first three chargeability controls,then Oracle Project Costing checks the transaction controls.





Quiz

Answer: c





Summary




Overview of Budgetary Controls, Budget Integration and Core BudgetingChapter 3 - Page 1

Overview of BudgetaryControls, Budget Integrationand Core Budgeting

Chapter 3





Overview of Budgetary Controls, Budget Integration and CoreBudgeting





Objectives

Instructor Note

This lesson discusses budgeting in the context of budgetary controls and budget integration.Other approaches to budgeting and forecasting are available as features of Oracle ProjectManagement and are covered in the course titled “R12.x Project Management Fundamentals.”

In Practice – Create a Bottom-Up Integrated Budget, at Step 19, please note that to add budgetamounts, the Encumbrance Year for the Vision Services Ledger must be opened to the currentyear. (Responsibility: General Ledger, Vision Services (N) Setup > Open/Close)





Agenda





Overview of Budgetary Controls

Overview of Budgetary Controls

You can enforce budgetary controls against a GL budget and a project cost budget. Budgetarycontrols enable you to monitor and control expense commitment transactions. Expensecommitment transactions are transactions for non-inventory items. Oracle Project Costingenforces budgetary controls for:

• Project-related purchase requisitions and purchase orders entered in Oracle Purchasing

• Contingent worker purchase orders entered in Oracle Purchasing

• Supplier invoices entered in Oracle Payables

• Project-related prepayments not matched to a purchase order and the application ofunmatched prepayments to supplier invoices

Note: Budgetary controls are not enforced for project-related expense reports entered in OraclePayables because you generally enter expense reports after costs are already incurred.Therefore, you should ensure that your procedures for approving expense report expendituresinclude verification of available funds according to your business requirements.





Budgetary Control Settings: Time Intervals


A time interval defines the budget amounts and the transactions included in the available fundscalculation. Time interval settings identify the beginning and the ending periods included in thecalculation. The amount type identifies the beginning period and a boundary code identifies theending period. The budgetary control process determines available funds by summing the budget amounts and subtracting actual and committed transaction amounts for a time interval.If the budget is time-phased by GL period, then the GL period is used. Alternatively, if the budget is time-phased by PA period, then the PA period is used.

The Amount Type defines the start of a time interval to determine funds availability:

• Period To Date - From the start of the period in which the expenditure item date falls

• Year To Date - From the start of the year in which the expenditure item date falls

• Project To Date - From the start of the project

The Boundary Code determines the end of a time interval to determine funds availability:

• Period - To the end of the period that includes the expenditure item date

• Year - To the end of the year in which the expenditure item date falls

• Project - To the end of the project







Only certain combinations of amount type and boundary code are valid.





Budgetary Control Settings: Control Levels

Budgetary Control Settings: Control Levels

You use budgetary control levels to set the degree of control the system imposes on projectcommitment transactions. You can enter default control levels at the project type, projecttemplate, and project levels. You can also define default values for resource lists. Select fromthe following control levels:

• Absolute - The transaction is rejected if sufficient funds are not available.

• Advisory - The transaction is accepted when sufficient funds are not available, but thesystem issues a warning notification that available funds are exceeded.

• None - The transaction is accepted without budgetary control validation.

When control levels are either Absolute or Advisory, the budgetary control process first teststhe lowest budget level to determine the availability of funds. If funds are available for atransaction at the lowest level, then the validation tests the next level in the budgetary controlhierarchy. The process continues until the transaction passes all levels or fails at any level. If atransaction fails budgetary control at a level with a control level of Absolute, the process isdiscontinued. However, if the control level is Advisory, an insufficient funds warningnotification is generated and the budgetary control process continues to the next level.





Example: Budgetary Control Rollup

Example: Budgetary Control Rollup

The diagram illustrates an example of a budgetary control rollup that reflects budget amountsat all budget levels, including resource, resource group, lowest task, top task, and project.

At the resource level, the available funds for resources roll up into the available funds for theresource groups. The available funds for the resource groups roll up into the available funds forthe lowest tasks. The available funds for the lowest tasks then roll up into the available fundsfor the top tasks. Finally, the available funds for the top tasks roll up into the available fundsfor the project.

For example, as illustrated for Top Task 2, Resource B1 and Resource B2 each have totalavailable funds of $10. Combined, the total funds of Resource B1 and B2 roll up into the

available funds of $20 for Resource Group B. The total available funds of Resource Group Band Resource Group C roll up into the available funds for Lowest Task 2.1, which equals $40.The total available funds for top task 2.1 roll up into the available funds for Top Task 2, whichequals $40. The total available funds of Top Task 2, $40, plus the total available funds of TopTask 1, $20, roll up into the available funds for Project 1, which equals $60.





Entering Budget Amounts for Controlled Budgets

Entering Budget Amounts for Controlled Budgets

Budget Amounts for Resources

If the budgetary control level for resources or resource groups is Absolute or Advisory, and no budget amount is entered for a resource or resource group, then Oracle Project Costing treatsthe budget amount as zero. Transactions that map to resources with no budget amounts fail budgetary control at an Absolute level and pass budgetary control with a warning at anAdvisory level.

A budget entry category called Unclassified is available at the resource list level. This categoryenables you to enter one budget amount for a group of resources. You can selectively controlcosts for some resources within a resource group by entering specific budget amounts for those

resources. You can then use the Unclassified category to budget for the remaining resourceswithin the resource group. The Unclassified category serves as a budget line for any resourcefor which a specific budget line does not exist.

Burden Cost Amounts

If burdening is enabled for a project, then all budgetary control is performed using thetransaction burdened cost. Oracle Project Costing provides the following methods ofaccounting for burden costs:





• Same Expenditure Item

- When you account for burden cost on the same expenditure item as raw costs, the budgetary control process calculates the burden cost amounts for a transaction andadds them to the raw cost amount. The process then maps the burdened transactionamount to a budget line and performs the necessary budgetary control validation.

- When you use the Same Expenditure Item method of accounting for burden costs,

enter budget amounts for the burdened transaction costs.• Separate Expenditure Item

- When you account for burden costs as separate expenditure items, the budgetarycontrol process calculates the burden cost amounts for each burden cost componentand separately maps each burden amount and the raw cost amount to a budget line.Individual budgetary control validations are performed for each component. If anycomponent fails validation, then the entire transaction is rejected.

- When you use the Separate Expenditure Item method of accounting for burdencosts and you are not using a resource list for budget entry, enter budget amountsfor the burdened transaction costs. The burden costs and the raw cost are mapped to

budget lines using the same mapping rules and are therefore mapped to the sameline.

- When you use this burden accounting method and you are budgeting using aresource list, the burden costs are not mapped using the resource for the raw cost.You must ensure that each burden cost component maps to a budget line with thedesired budgetary control setting. To do this, define your burden cost componentsas resources on your resource list and then use these resources to enter budgetamounts for burden costs. This enables you to enter a budgetary control setting foreach burden cost component and a control setting for budget lines defined for rawcosts. If you do not want to impose budgetary controls on burden cost amounts,then you can assign a control setting of None for all budget lines for burden

component resources.- An alternative to defining resources on your resource list for burden cost

components is to use the Unclassified budget entry category to budget for burdencost amounts. If a budget line cannot be found for the burden cost components andan Unclassified budget line exists, then the budgetary control process maps the burden costs to the Unclassified line.





Budget Definition Strategies

Budget Definition Strategies

Oracle Project Costing budgetary controls only apply to expense commitment transactions.Budgetary controls do not apply to other project-related transactions such as timecards,expense reports, or inventory item purchases. Therefore, when you enable budgetary controlsfor a project, it is recommended that you use one of the following strategies for defining cost budget amounts:

• Strategy 1: Define Two Budgets - Define an overall project cost budget. The overall cost budget tracks all project costs. Do not enable budgetary controls for the Approved CostBudget type. Define a separate budget for expense commitment transactions. It isrecommended that you create a user-defined budget type for the commitment budget.

Enable budgetary controls for this budge type.• Strategy 2: Define One Cost Budget - The second approach uses one cost budget for all

anticipated project costs. The budget includes separate budget lines for expensecommitment transactions and all other project costs. When you define a project, enable budgetary controls using this budget type. It is recommended that a control setting of None be entered for all other budget lines.





Transaction Processing with Controlled Budgets

Transaction Processing with Controlled Budgets

Initiating Budgetary Control Validation in Oracle Purchasing and Oracle Payables

In Oracle Purchasing and Oracle Payables, budgetary control processes are activated when youselect the Check Funds option for a transaction, and also during the transaction approval.

Funds Check Activation in Oracle Project Costing

In Oracle Project Costing, budgetary controls only apply to expense commitment transactions.You interface project-related expense commitment transactions from Oracle Purchasing andOracle Payables to Oracle Project Costing as supplier costs. After you interface supplier coststo Oracle Project Costing, you can adjust the expenditure items in Oracle Project Costing.

You run the program PRC: Distribute Supplier Cost Adjustments to process the adjustedsupplier cost expenditure items. This program uses AutoAccounting in Oracle Project Costingto determine the default expense account for the adjustments. This program also performs a budgetary control validation for transactions meeting all of the following criteria:

• The supplier cost originated in Oracle Purchasing or Oracle Payables

• The transaction is charged to a project with budgetary controls enabled

• The transaction is an expense item





When you change a burden multiplier, you must run one of the following programs to initiate budgetary control validation for the changed burden amounts. The program you run dependson the burdening method for the project.

• PRC: Distribute Total Burdened Costs - Run this program if the project is set up toaccount for total burdened costs.

• PRC: Create and Distribute Burden Transactions - Run this program if the project is

set up to account for burden costs by burden cost component.If funds are available for the adjusted expenditure amounts, then the adjustment item is costdistributed. If funds are not available for an item, then the item is not distributed and anexception is reported.

Oracle Project Costing also performs budgetary control validation for contingent worker laborcosts related to a purchase order when you run the program PRC: Distribute Labor Costs orPRC: Distribute Labor Costs for a Range of Projects.

If an item is not cost distributed as a result of a budgetary control failure, then you must perform one of the following actions and rerun the distribution program:

• Increase budget amounts so funds are available for the expenditure item.

• Decrease the budgetary control level from Absolute to Advisory or None for the budgetlevel causing the budgetary control failure.

• For an adjusted item, undo the change that increased the expenditure item amount. Forexample, if you increased a burden cost rate, then set the rate back to its original value.

• For a transferred item, transfer the item to a task within the same project, or to another project or project task that has sufficient funds available or that does not have budgetarycontrols enabled.





Overview of the Budgetary Control Process Flow

Overview of the Budgetary Control Process Flow

The following activities take place during budgetary control validation:

1. Source subledger applications generate accounting events. For example, both OraclePurchasing and Oracle Project Costing generate accounting events when you check fundsfor a purchase order when top-down budgeting and burdening is enabled for the project.

2. Source subledger application calls the budgetary control API.

3. Budgetary control API calls the Oracle Subledger Accounting Online Process.

4. Oracle Subledger Accounting Online Process processes the accounting events to createaccounting entries and calls the Oracle Subledger Accounting Validation Routine.

5. Oracle Subledger Accounting Validation Routine populates the GL_BC_PACKETS tablewith the accounting entries and calls the PSA/GL funds check API.

6. PSA/GL funds check API first calls the Projects funds check API.

7. If a project-related transaction is being validated, then Projects funds check API checksfor funds availability and returns status to PSA/GL funds check API.

8. If Projects funds check API returns a success value, then PSA/GL funds check API processes the transaction for GL funds availability.





9. PSA/GL funds check API and Projects funds check API coordinate status information.

10. Success and failure statuses are updated in GL_BC_PACKETS table.

11. The accounting entries are committed as final or draft , depending on the status returnedfrom the Oracle Subledger Accounting Validation Routine and on whether reserve funds(final) or check funds (draft) was invoked.





Viewing Budgetary Control Results

Viewing Budgetary Control Results

After the transaction is validated against the project budget, you can view the results from the Funds Check Results window. The window displays budgetary control results for transactions.

Note: You can also view the budgetary control results from the source application after thefunds validation action is performed. The results are displayed in an XDO report format.

Funds Check Results Window

To review transaction budgetary control results, perform the following steps:

1. Navigate to the Find Funds Check Details window.

2. Enter selection criteria.

3. Choose the Find button to display the Funds Check Results window.4. Select a budget level tab to view information for a specified budget level.

For a list of budgetary control results messages, see the Oracle Project Management User

Guide.





Maintaining Budgetary Control Balances

Maintaining Budgetary Control Balances

Oracle Project Costing maintains budgetary control balances for all projects that use budgetarycontrols. For each budget line, the budget amount, the commitment transactions total, and thetotal actuals related to commitment transactions are maintained. The system also calculatesavailable funds for each budget category and budget period.

When you create a baseline from the original budget version, the system creates initial balances. When you run PRC: Maintain Budgetary Control Balances, the program updates the balances. The updated balances are displayed in the Budget Funds Check Results window. Todetermine how often to schedule the program, consider the number of project-relatedcommitments your business creates each day as well as your online inquiry business needs.

The Budget Funds Check Results window displays budget, actuals, commitments, andavailable funds balances for each budget level. The window includes a tabbed region for each project budget level. The levels can include the following: project, top task, task, resourcegroup, and resource. You can use the window to review project-to-date transactions and to planfuture expenditures. You can also use the information in this window, along with theTransaction Funds Check Results window, to troubleshoot budgetary control failures.





Budgetary Controls Cross Charge Restriction

Budgetary Controls Cross Charge Restriction

A transaction is subject to the budgetary controls defined for only the ledger in which thetransaction originates. Therefore, when you enable budgetary controls for a project, you cannotenter cross charge transactions that cross ledgers.

The following scenario illustrates the need for this restriction:

• Two ledgers are defined in an installation of Oracle Applications.

• In Ledger One (L1), budgetary controls are enabled in Oracle General Ledger and OraclePayables.

• In Ledger Two (L2), budgetary controls are not enabled in any application.

Project A is defined in L1 and budgetary controls are enabled for the project. If you enter acommitment transaction in L2 for Project A, the transaction does not undergo budgetarycontrol validation, because budgetary controls are not enabled in L2.





Quiz

Answer: a





Quiz

Answer: d





Quiz

Answer: b





Agenda





Overview of Budget Integration

Overview of Budget Integration

Top-Down budget integration enables financial managers to maintain centralized control oforganization spending while still granting project managers flexibility in managing theirindividual projects. An organization-level budget defines overall spending limitations. Project budgets consume funds from the organization-level budget and are used to control spending forindividual projects.

Bottom-Up budget integration enables you to create centralized organization-level budgetsfrom defined project budgets. The organization-level budget amounts are an accumulation of project budget amounts and may also include budget amounts from other sources. Financialmanagers use the organization-level budgets to view budgeted figures for the organization as a

whole, while project managers maintain independent budgets to monitor spending and revenuegeneration for each project.

Non-integrated budgets with budgetary controls enable you to control spending against your project budget without sending budget-related accounting entries to Oracle General Ledger.





Generating Accounting for Integrated Budgets

Generating Accounting for Integrated Budgets

Oracle Project Costing uses the Project Budget Account Generation workflow to generatedefault accounts for budget lines. The budgets that you define in Oracle General Ledger areaccount-level budgets (by account and GL period). Therefore, when you enter project budgetamounts for integrated budget types, you must use a budget entry method that is time-phased by GL period, and you must assign an account to each project budget line.

If you define your own detailed accounting rules in Oracle Subledger Accounting, then OracleSubledger Accounting overwrites default accounts, or individual segments of accounts, thatOracle Project Costing generates using the Project Budget Account Workflow. You run the program PRC: Transfer Journal Entries to GL to transfer the final subledger journal entries

from Oracle Subledger Accounting to Oracle General Ledger.Important: If you update account derivation rules for budgets in Oracle SubledgerAccounting, then you must carefully consider the affect of the updates on existing integrated budgets. The baseline process fails if a revised account derivation rule overwrites accounts for budget lines that are associated with transactions.

For top-down budget integration, Oracle Project Costing generates accounting events to create project budget encumbrance accounting entries. Oracle Project Costing generates the





accounting events and initiates the process to create accounting in final mode in OracleSubledger Accounting in the following circumstances:

• When you run the process PRC: Year End Budget Rollover to transfer year-end balancesfor top-down integrated project budgets to the next fiscal year

• When you create a baseline version for a top-down integrated project budget

For bottom-up budget integration, Oracle Project Costing generates accounting events to create

budget accounting entries. Oracle Project Costing generates the accounting events and initiatesthe process to create the subledger accounting in final mode when you create a baseline versionfor a bottom-up integrated project budget.

In addition, when you initiate the Check Funds action for an integrated budget, Oracle ProjectCosting creates accounting in draft mode in Oracle Subledger Accounting.





Accounting Event Model Overview


Oracle Project Costing predefines the Budgets event entity to use for integrated budgets. Anevent entity enables Oracle Subledger Accounting to handle the accounting for similar businessevents in a consistent manner.

In addition, Oracle Project Costing predefines the Budget event class and two event types Budget Year End Rollover and Budget Baseline, for the Budgets accounting event entity. Anevent class represents a category of business events for a particular transaction type ordocument. An event type represents a business operation that you can perform for an eventclass. Oracle Projects generates accounting events for the Budget event class when you enableeither top-down or bottom-up budget integration for a project budget.







Oracle Project Costing also predefines event classes and event types for the Requisition, Purchase Order , and Release accounting event entities in Oracle Purchasing, and for the AP

Invoices accounting event entity in Oracle Payables. These event classes and event types arefor encumbrance accounting for burden cost on project-related commitments in OraclePurchasing and Oracle Payables.

Oracle Project Costing creates project encumbrance entries when you enable top-down budgetintegration for a project. Oracle Project Costing provides this setup in Oracle Purchasing andOracle Payables so that these applications can create encumbrance for burden costs.

Oracle Purchasing and Oracle Payables create encumbrance journals whenever any funds

related action is performed for a document. For example, when you perform a Check Fundsaction for document, the encumbrance accounting events are processed to create theencumbrance journals in draft mode. When you perform a Reserve Funds action for adocument, the encumbrance accounting events are processed to create the encumbrance journals in final mode and the funds balances are updated. After processing is complete, youcan review the updated funds balances.





If you define your own detailed accounting rules in Oracle Subledger Accounting, then OracleSubledger Accounting overwrites default accounts, or individual segments of accounts, thatOracle Purchasing or Oracle Payables derives using the Account Generator.

For a list of the predefined event classes and event types, see the Oracle Projects

Implementation Guide.





Budget Check Funds Processing Overview

Budget Check Funds Processing Overview

You can choose to perform a budget check funds before you submit the budget for baseline processing. The following processing occurs during a budget check funds:

1. Oracle Project Costing determines the default accounts using the Project Budget AccountGeneration Workflow.

2. Oracle Project Costing validates funds.

- For top-down integrated budgets, Oracle Project Costing validates existing approvedtransaction amounts (at resource, resource group, task, top task and project levels)against the project budget.

3. Oracle Project Costing generates accounting events.

4. Oracle Subledger Accounting creates accounting entries in draft mode for the accountingevents.

5. Oracle Project Costing validates funds.

- For bottom-up budget integration, Oracle Project Costing validates the budgetamounts against an organization-level Oracle General Ledger budget.





- For top-down integrated budgets, Oracle Project Costing validates budget amountsagainst the General Ledger Funding Budget and then validates existing approvedtransaction amounts (at account level) against the project budget.

6. Oracle Project Costing updates the budget lines with the accounting information fromOracle Subledger Accounting and the budget check funds result status.





Creating a Baseline for an Integrated Budget

Creating a Baseline for an Integrated Budget

When you create a baseline version for an integrated project budget, the baseline process performs the following activities:

1. Validates the submitted budget version.

2. Creates a baseline for the new budget version.

3. Validates funds.

- For top-down integrated budgets, the baseline process validates existing approvedtransaction amounts (at resource, resource group, task, top task and project levels)against the project budget.

- Note: When you use the PA: Budget Workflow to control budget status changes,Oracle Project Costing performs funds validation only after the budget is approved.

4. Generates accounting events to reverse the accounting for the most recent baselineversion, if one exists, and to create accounting for the new baseline version.

- For bottom-up budget integration, the baseline process generates accounting events tocreate budget journal entries.





- For top-down integrated budgets, the baseline process generates accounting events tocreate encumbrance journal entries.

5. Creates accounting in final mode for the accounting events in Oracle SubledgerAccounting.

6. Validates funds.

- For bottom-up budget integration, the baseline process validates the budget amounts

against an organization-level Oracle General Ledger budget.

- For top-down integrated budgets, the baseline process validates budget amountsagainst the General Ledger Funding Budget and then validates existing approvedtransaction amounts (at account level) against the project budget.

- Note: If the budget fails funds validation, then the baseline process removes theaccounting entries it created from Oracle Subledger Accounting and updates thesubmitted budget version to Rejected status.

You run the program PRC: Transfer Journal Entries to GL to transfer the journal entries toOracle 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. The baseline program updatesfunds balances in Oracle General Ledger. The program PRC: Transfer Journal Entries to GLdoes not affect funds balances.

For non-integrated budgets with budgetary controls, the baseline process validates thesubmitted budget version, creates baseline version, and validates existing transaction amountsagainst the project budget. The baseline process does not generate and process accountingevents for non-integrated budgets.





Budget Integration Workflow

Budget Integration Workflow

When a project uses budgetary controls, the budget baseline process launches the PA: BudgetIntegration workflow to perform the baseline processing tasks.





Reviewing and Overriding Budget Account Details

Reviewing and Overriding Budget Account Details

You can review and optionally override default accounts, or an account segment, generated bythe Project Budget Account Generation workflow.

Note: Do not update the account for the budget line if the budget line is associated withtransactions. Updating the account causes the baseline process to fail.

If you define your own detailed accounting rules in Oracle Subledger Accounting, then OracleSubledger Accounting overwrites default accounts, or individual segments of accounts, thatOracle Project Costing generates using the Project Budget Account Generation workflow. If notransactions exist for a budget line, then Oracle Project Costing updates the budget line withthe new account when you manually update accounts on the Budget Accounts Details window

and when you define account derivation rules in Oracle Subledger Accounting to overwriteaccounts.





Viewing Encumbrance and Budget Subledger Accounting

Viewing Encumbrance and Budget Subledger Accounting

You can use the subledger accounting events drill-down and inquiry menu options in OracleProject Costing, Oracle Payables, and Oracle Purchasing to view information about budget andencumbrance journal entries. You can:

• Perform an inquiry on accounting events, journal entries and journal entry lines based onmultiple selection criteria.

• View information about an accounting event or journal entry error.

• View detailed information about the subledger journal entry headers for a givenaccounting event.

• Compare subledger journal entry information for any two journal entries.

• View subledger journal entry lines for a number of different documents or transactions.

• View subledger journal entry in T-account format.





Quiz

Answer: a





Agenda





Top-Down Budget Integration

Top-Down Budget Integration

When enterprises use top-down budgeting, top management defines spending limits for eachorganization. Budgetary controls are set to enforce the limits, and encumbrance accountingcreates reservations for planned expenditures.

The reservations ensure that funds will be available when project costs are incurred, and provide a complete picture of funds available for future use.





Top-Down Budget Integration Procedures

Top-Down Budget Integration Procedures

Defining General Ledger Funding Budgets

Before you can define budget integration, you must define an organization-level funding budget or budgets in Oracle General Ledger. To set an organization's spending limits, you enterfunding budget balances for the accounts assigned to each budget organization.

Defining Budget Integration

To reserve funds in General Ledger funding budgets for anticipated project costs, define budget integration using the Budgetary Controls option from the Projects, Templates window.When you define integration for your project, use the budget type you plan to use for yourcommitment budget and select the Encumbrance balance type. You must define Integration

before you create a baseline version for the project budget and before you enter any projecttransactions. See the section of this lesson titled "Implementation Steps."

Entering Budget Amounts and Generating Accounts

When you define a commitment budget for controlling expense-type commitment transactionsand create a baseline version, the system generates encumbrance entries to create a projectencumbrance against the funding budget. The project encumbrance reserves funds for the





anticipated project commitment costs. When project-related expense commitment transactionsare approved, the project encumbrance is reduced and new commitment encumbrances created.

When you define integration using the Encumbrance balance type, the system automaticallyenables budgetary controls for the project. The Project control level is automatically set atAbsolute and cannot be changed. Oracle Project Costing uses budgetary controls to ensure thatthe project commitment total for expense transactions never exceeds the project commitment

budget and the amounts reserved in the General Ledger funding budget.Creating a Baseline Budget Version

When a project is set up to use top-down integration, the process to create a baseline versionvaries depending on whether you use workflow to control budget status changes.

• If you do not use workflow to control budget status changes, then Oracle Project Costingcalls the PA: Budget Integration Workflow.

• If you use workflow to control budget status changes, then Oracle Project Costing changesthe budget version status to In Progress and calls the budget approval workflow. After the budget is approved, baseline processing continues for the budget version. Oracle ProjectCosting displays any rejections encountered during baseline processing in the budget

approval notification.When you submit a top-down integrated budget, Oracle Project Costing:

• Validates the submitted budget version.

• Creates a baseline version

• Validates existing approved transaction amounts (at resource, resource group, task, toptask and project levels) against the project budget.

• Generates accounting events

• Creates encumbrance journal entries in final mode for the accounting events in OracleSubledger Accounting

• Validates budget amounts against the General Ledger Funding Budget

• Validates existing approved transaction amounts (at account level) against the project budget.

If the baseline version is the initial baseline version for the budget, then Oracle Project Costingcreates and validates encumbrance journal entries for this budget version. If a prior baselineversion exists, then Oracle Project Costing creates and validates reversal encumbrance journalentries for the most recent baseline version and new encumbrance journal entries for the new baseline version.

Transferring Budget Journals to Oracle General Ledger

You run the program PRC: Transfer Journal Entries to GL to transfer encumbrance journalentries from Oracle Subledger Accounting to Oracle General Ledger.

Posting Encumbrance Journals When you submit the program PRC: Transfer Journal Entries to GL, you can optionally chooseto have the program post the journal entries. Otherwise, you can manually post the journalentries in Oracle General Ledger. The baseline process updates funds balances in OracleGeneral Ledger. The program PRC: Transfer Journal Entries to GL does not affect funds balances.





Encumbrance Accounting Example


You enter a top-down integrated budget for a project. The budget entry method must use GL periods for budgeting. In this example, the budget entry method uses a resource list that isgrouped into resource groups (expenditure organizations in this example). Each resource groupis broken down into resources (expenditure categories in this example).







The Account Generator creates GL accounts for each budget line. The baseline processvalidates the submitted budget version, creates a baseline version, validates existing approvedtransaction amounts (at resource, resource group, task, top task and project levels) against the project budget, generates accounting events, creates encumbrance journal entries in final modefor the accounting events in Oracle Subledger Accounting, validates budget amounts againstthe General Ledger Funding Budget, and validates existing approved transaction amounts (ataccount level) against the project budget.







The Finance Department submits the program PRC: Transfer Journal Entries to GL and selectsYes for the parameter Post in General Ledger . The program transfers encumbrance journalentries from Oracle Subledger Accounting to Oracle General Ledger and posts the journalentries in Oracle General Ledger.

Note: The account 01-000-1280-000 is defined as the Reserve for Encumbrance Account inOracle General Ledger.





Creating Project Budgets for Top-Down Budget Integration

Creating Project Budgets for Top–Down Budget Integration

When you define top-down budget integration for a project, it is recommended that you createa commitment budget for tracking and controlling the project's expense commitmenttransactions. Keep in mind the following considerations:

• Budgetary Controls are automatically enabled when top-down integration is defined.

• General Ledger accounts must be assigned to all budget lines for integrated budget types.

• When you create a budget for an integrated budget type, you must use a budget entrymethod that is time phased by GL period.

• You must create a budget line for each budget category and budget period for whichcommitment transactions are expected.

• The process to create a baseline version varies depending on whether you use workflow tocontrol budget status changes.

• Additional validations occur when you create a baseline for an integrated project budget.

Note: For top-down budget integration, you also need to enable encumbrance accounting inOracle Purchasing and Oracle Payables and budgetary control in Oracle General Ledger. Seethe section of this lesson titled "Implementation Steps."





Maintaining the Project Budget

Maintaining the Project Budget

When you modify a top-down integrated budget, the baseline process performs the followingtasks for the new budget version:

• Validates the budgetary controls defined for the project budget

• Validates the budgetary controls defined for the funding budget

• Validates the General Ledger period statuses

• Updates the project encumbrance against the funding budget

Project Budgetary Controls

The system validates budgetary controls when budget amounts are deleted or decreased or

when the budget entry method is changed. When budget amounts are reduced, the baseline process performs budgetary control validations to ensure that existing transaction totals do notexceed available funds calculated using the new budget amounts. When the budget entrymethod is changed and a budget version is created using new budget categories, the baseline process maps all existing transactions in open GL periods to a budget line in the new budgetversion. Budgetary control validations are then performed for each transaction that uses budgetary controls defined for the new budget lines. If any transaction generates a budgetarycontrol failure, the baseline process fails. If the baseline process fails, you can troubleshoot by





viewing the rejected budget version in the Budget Funds Check Results window. You can alsouse the Funds Check Results window to view the rejection reason for the particular transactionthat failed during the baseline process.

Funding Budget Controls and GL Period Statuses

When budget amounts are increased or new budget lines are entered, additional funds must bereserved in the funding budget. Therefore, the baseline process performs a budgetary control

validation against the funding budget to ensure that funds are available for the additional project budget amounts. If any budgetary control failures are returned, the baseline processfails.

Project Encumbrance Maintenance

When a baseline is successfully created for a revised budget, the project encumbrance againstthe funding budget is adjusted. If new budget lines are added or existing budget line amountsare increased, then additional funds are reserved in the funding budget. If budget lines aredecreased or deleted, then project encumbrances are liquidated, reducing the projectreservation. The Accounted Amount column on the By Account tab of the Budget AccountsDetails window displays the encumbrance adjustment amounts. Positive values reserveadditional funds and negative values reduce the current reservation.





Year-End Processing

Year-End Processing

When budgeted funds for a fiscal year are not used by the end of the year, many businessesmove the available amounts to the next year. Organizations that operate under budget do notlose 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-downintegrated project budgets to the next fiscal year. The program performs budget rolloverfunctions for all selected top-down integrated budgets. The program calculates transfer amountfor 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 tothe 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 GeneralLedger. When you submit the program PRC: Transfer Journal Entries to GL, you canoptionally choose to have the program post the journal entries. Otherwise, you can manually post the journal entries in Oracle General Ledger.





Agenda





Bottom-Up Budget Integration

Bottom-Up Budget Integration

When enterprises use bottom-up budgeting, they build organization-level budgets byconsolidating budget amounts from lower-level sources. When you define budget integrationfor a project, the project budget can be consolidated automatically.





Bottom-Up Budget Integration Procedures

Bottom-Up Budget Integration Procedures

Defining an Organization-Level Budget

You must define your organization-level budget or budgets in Oracle General Ledger. InOracle General Ledger, budgets contain estimated cost or revenue amounts for a range ofaccounting periods. Budget organizations define the departments, cost centers, divisions, orother groups for which budget data is maintained. You assign accounts to each budgetorganization. You create organization budget balances by entering budget amounts for theassigned accounts.

Defining Budget Integration

You define budget integration using the Budgetary Control option from the Projects,

Templates window. You can use any project budget type to define bottom-up budgetintegration. You must define Integration before you create a baseline version for the project budget and before you enter any project transactions. See the section of this lesson titled"Implementation Steps."

Entering Budget Amounts and Generating Accounts

Next, you enter your budget and generate accounts in Oracle Project Costing.





Creating a Baseline Budget Version

When a project is set up to use bottom-up integration, the process to create a baseline versionvaries depending on whether you use workflow to control budget status changes.

• If you do not use workflow to control budget status changes, then Oracle Project Costingcalls the PA: Budget Integration Workflow.

• If you use workflow to control budget status changes, then Oracle Project Costing changesthe budget version status to In Progress and calls the budget approval workflow. After the budget is approved, baseline processing continues for the budget version. Oracle ProjectCosting displays any rejections encountered during baseline processing in the budgetapproval notification.

The budget baseline process validates the submitted budget version, creates a baseline version,generates accounting events, creates budget journal entries for the accounting events in OracleSubledger Accounting, and validates the budget amounts against an organization-level OracleGeneral Ledger budget. If the baseline version is the initial baseline version for the budget,then the baseline process creates and validates budget journal entries for this budget version. If

a prior baseline version exists, the baseline process creates and validates reversal budget journal entries for the most recent baseline version and new budget journal entries for the new baseline version.

Transferring Budget Journals to Oracle General Ledger

After you create a baseline version for an integrated project budget, you run the program PRC:Transfer Journal Entries to GL to transfer the journal entries to Oracle General Ledger andinitiate the program Journal Import in Oracle General Ledger. If the baseline version is theinitial baseline version for the budget, then the program transfers the budget journal entries itcreates for this version. If a prior baseline version exists, then the program transfers reversal budget journal entries for the most recent baseline version and new budget journal entries forthe new baseline version. The baseline process updates funds balances in Oracle General

Ledger. The program PRC: Transfer Journal Entries to GL does not affect funds balances.Posting Budget Journals

When you submit the program PRC: Transfer Journal Entries to GL, you can optionally chooseto have the program post the journal entries. Otherwise, you can manually post the journalentries in Oracle General Ledger. You can review and post the entries using the GeneralLedger Post Journals window.





Agenda





Non-Integrated Budgets with Budgetary Controls Procedures

Non-Integrated Budgets with Budgetary Controls Procedures

You can set up your project to use budgetary controls with a non-integrated budget. OracleProject Costing does not generate and process accounting events for non-integrated budgets.

Defining Non-Integrated Budgets with Budgetary Control

You define budget integration using the Budgetary Control option from the Projects,Templates window. See the budgetary control discussion in the section of this lesson titled"Implementation Steps."

Creating a Baseline Budget Version

When you create the baseline budget version, the baseline process:

1. Validates the submitted budget version.2. Creates baseline version.

3. Validates existing approved transaction amounts against the project budget.

Note: A project-related document in Oracle Purchasing or Oracle Payables is independentlyvalidated against the GL budget and the project budget.





Agenda





Budgeting Implementation Steps





Define Additional Core Budgeting Setup

Define Additional Core Budgeting Setup

You can define additional core budgeting setup as needed. This setup includes budget changereasons, budget types, and budget entry methods.

• Budget Change Reasons - You can select a budget change reason for budget versions andfor individual budget lines. You can define your own change reasons.

• Budget Types - Budget types define the different types of budgets that you plan for whenyou want to create budgets that use budgetary controls and budget integration features.

• Budget Entry Methods - Budget entry methods specify and control the followingoptions:

- The level of the work breakdown structure at which you enter a budget.

- The time phase that you use to enter budget amounts, if any.

- Whether you enter amounts that are categorized by resources.

- The amounts that you can enter.

For additional information, see the "Implementing Oracle Project Management" section of theOracle Projects Implementation Guide.





Implementing Budgetary Controls





Budgetary Controls: Enable Budgetary Controls andEncumbrance Accounting

Budgetary Controls: Enable Budgetary Controls and Encumbrance Accounting

To use budgetary controls, you must enable budgetary control for the ledger in Oracle GeneralLedger and enable encumbrance accounting in Oracle Payables or Oracle Purchasing.Encumbrance accounting automatically creates encumbrances for requisitions, purchase orders,and invoices. For additional details, see information about encumbrance financials options inthe Oracle Payables Implementation Guide.

Note: The budgetary control process uses the following predefined encumbrance types:

• Projects for top-down integrated budgets in Oracle Project Costing

• Commitment for requisitions• Obligation for purchase orders

• Invoices for Oracle Payables documents

Important: After you enable budgetary control for the ledger in Oracle General Ledger andencumbrance accounting in Oracle Payables or Oracle Purchasing, you must not disable it.Modifying these options can result in data corruption in funds-related tables and cause failuresduring funds validation processing.





Budgetary Controls: Define Profile Options

Budgetary Controls: Define Profile Options

• PA: Enable Budget Integration and Budgetary Control Feature - To enable budgetary control for your projects, you must set this profile option to Y (Yes).

• PA: Days to Maintain BC Packets - Specify the number of days budgetary controlresults are maintained. The default value is 3. Increasing this value may slow the performance of the budgetary control process. Use the Funds Check Results window toview budgetary control results for transactions that are not older than the number of daysthat you specify. The budgetary control results for transactions that pass budgetarycontrol are available for online viewing in the Funds Check Results window only untilany of the following events occurs:

- You run the concurrent program PRC: Maintain Budgetary Control Balances.- You create a baseline version for any project with budget integration.

- The transaction is older than the number of days specified for profile option.

• PSA: Budgetary Control Report Template – You can set this profile option at the site,application, responsibility, and user levels. You must select Budgetary Control Results

Template to view budgetary control results from Oracle Purchasing and Oracle Payables.





Budgetary Controls: Define Control Levels and the Time Interval

Budgetary Controls: Define Control Levels and the Time Interval

Define budgetary controls for non-integrated budgets and for top-down integrated budgets.You can define budgetary controls for project types, project templates, and projects. Valuesthat you define for a project type are the default values for project templates. Values that youdefine for project templates are the default values for projects. When you define a project type,indicate whether or not the default values for budgetary controls can be changed at the projectlevel.

Non-Integrated Budgets: Defining Budgetary Controls for Project Types

1. Navigate to the Budgetary Control tab for a project type.

2. Allow Override at Project Level - Check this box to allow users to modify the settings at

the project level.

3. Budget Type - Select a project cost budget type.

4. Control Flag - Enable the Control Flag check box.

5. Balance Type - Leave blank.

6. Non-Project Budget - Leave blank.

7. Levels - Select a default control level for each budget level.





8. Time Phase - Select an Amount Type and Boundary Code to be used when the systemcalculates available funds.

Non-Integrated Budgets: Defining Budgetary Controls for Project Templates and

Projects

1. Navigate to the Budgetary Control option of the Projects, Templates window.

2. Budget Type - Select a project cost budget type.

3. Balance Type - Leave blank.

4. Non-Project Budget - Leave blank.

5. Levels - Select a default control level for each budget level.


For information about defining budgetary control setup for top-down integrated budgets, seethe information in this section about implementing top-down integration.





Budgetary Controls: Create an Initial Budget

Budgetary Controls: Create an Initial Budget

When you enable budgetary controls for a project, you must create a baseline version for your project cost budget before you enter commitment transactions. If a baseline version does notexist when you approve a commitment transaction, then the transaction fails and you receive anerror message: No baseline budget version exists for this project .

For a project that uses burdening, use a budget entry method that enables you to enter burdenedcost amounts. Oracle Project Costing uses burdened cost amounts to enforce budgetarycontrols. If you enter only raw cost amounts for a project budget with a budget entry methodthat allows the entry of burdened cost amounts, then Oracle Project Costing automaticallycopies the raw cost amounts to the burdened cost fields. These amounts are then used to

enforce budgetary controls for your project.





Budgetary Controls: Adjust Default Control Levels

Budgetary Controls: Adjust Default Control Levels

When you create a baseline for a project budget for the first time, Oracle Project Costingcreates default budgetary control level settings for each budget level based on the values in theBudgetary Controls option. You can override the default control level values for the baseline budget version. When you create subsequent baselines for the project budget, Oracle ProjectCosting uses the revised budgetary control level settings and not the default settings. Forexample, if you override the budgetary control level for a task, Oracle Project Costing does notreset the task to the default value the next time that you create a baseline for the budget.

If you add new tasks to the project or new resource groups or resources to the resource listassigned to the budget, the next time you create a baseline for the budget, Oracle Project

Costing automatically creates default budgetary control settings for the new tasks, resourcegroups, or resources. You can override the default control level values for the baseline budgetversion.

To adjust budgetary control levels, perform the following steps:

1. Navigate to the Budgets window.

2. Query your project cost budget.

3. Choose the History button to view the budget version history.





4. Select Budgetary Controls from the Tools menu.

5. Change control level values as required.

6. If you are budgeting using a resource list, then choose the Resources button on theBudgetary Control window to override the default values for resource groups andresources.

7. Save your work.

Important: You can select the Reset Defaults button on the Budgetary Control window torestore the default budgetary control settings for the project. When you select the Reset

Defaults button, Oracle Projects resets all budgetary control settings to the default values,including any settings that you have manually overridden.

Default Budgetary Controls and Changing the Budget Entry Method

You can change the budget entry method for a budget after you create a baseline version. If the budget entry level for the new budget entry method is different from the budget entry level forthe current budget entry method, Oracle Project Costing resets to the budgetary controls to thedefault budgetary control level settings when you create the next budget baseline.

For example, if the budget entry level of the current budget entry method is Top Tasks and the

budget entry level for the new budget entry method is Lowest Tasks, Oracle Project Costingresets the budgetary controls to the default budgetary control level settings when you create thenext budget baseline.





Implementing Budget Integration

Implementing Budget Integration

When you integrate project budgets with non-project budgets, you use either top-downintegration or bottom-up integration.





Budget Integration: Define the Project Budget Account GenerationWorkflow

Budget Integration: Define the Project Budget Account Generation Workflow

Oracle Project Costing uses the Project Budget Account Generation workflow process togenerate default accounts when a project budget is integrated with a non-project budget. Youmust customize the Project Budget Account Generation workflow process to generate accountsaccording to your business needs.

This workflow runs when one of the following events occurs:

• You manually select the Generate Budget Accounting option from the Tools menu of theBudgets window.

• You submit an integrated budget and it creates a baseline version.• You run the year-end rollover program for a top-down integrated budget to carry forward

the unspent project budget encumbrance amount from the year that is ending into the nextyear.

When you activate the workflow from the Tools menu, an account is generated or regeneratedfor all the defined budget lines. When the workflow is activated during budget submission,accounts are only generated for budget lines that do not already have an assigned account.





Note: Do not update the account for the budget line if the budget line is associated withtransactions. Updating the account causes the baseline process to fail.

You must customize the Project Budget Account Generation workflow to generate accounts based on your business needs. Oracle Project Costing provides predefined parameters tosimplify the customization process. You can use the predefined parameters to derive accounts based on project organizations, expenditure organizations, and tasks, or based on the resource

groups and resources used for budget entry.Oracle Project Costing predefines setup in Oracle Subledger Accounting to accept defaultaccounts from Oracle Project Costing without change. If you define your own detailedaccounting rules in Oracle Subledger Accounting, then Oracle Subledger Accountingoverwrites default accounts, or individual segments of accounts, that Oracle Project Costingderives using the Project Budget Account Generation workflow.

For additional details, see the Oracle Projects Implementation Guide.





Budget Integration: Define Profile Options

Budget Integration: Define Profile Options

• PA: Allow Override of Budget Accounts - This profile option enables you to controlwhether you can manually override accounts generated by the Project Budget AccountGeneration workflow process.

• PA: Enable Budget Integration and Budgetary Control Feature - To enable budgetintegration for your projects, you must set this profile option to Y (Yes).

• PA: Days to Maintain BC Packets - This profile option specifies the number of days budgetary control results are maintained. For more information, see the discussion in thissection about implementing budgetary controls.

• PSA: Budgetary Control Report Template – You can set this profile option at the site,

application, responsibility, and user levels. You must select Budgetary Control ResultsTemplate to view budgetary control results from Oracle Purchasing and Oracle Payables.





Budget Integration: Implement Top-Down Integration

Budget Integration: Implement Top-Down Integration

Defining Top-Down Budget Integration for Project Types:


2. Allow Override at Project Level - Enable this box to allow users to modify the default budget integration settings at the project level.

3. Budget Type - Select a project cost budget type to be integrated. You can enable top-downintegration for cost budget types only.

4. Control Flag - Enable the Control Flag check box. Budgetary controls must be enabled fortop-down integration.

5. Balance Type - For top-down integration, the Balance Type must be Encumbrance.6. Non-Project Budget - Select General Ledger Funding Budget.

7. Levels - Select a default control level for each budget level. For top-down budgetintegration, the system imposes absolute control at the project level for all encumberedaccounts.






Note: The project budget controls you set must be compatible with the funding budgetcontrols. The project budget controls must not allow a transaction to pass budgetary control ifthe transaction will fail budgetary control validation against the funding budget. In general, the project budget controls must be equal to or more restrictive than the funding budget controls.

Defining Top-Down Budget Integration for Project Templates and Projects:


2. Budget Type - Select a project cost budget type to be integrated.

3. Balance Type - Select Encumbrance.

4. Non-Project Budget - Select General Ledger Funding Budget.

5. Levels - Select a default control level for each budget level. For top-down budgetintegration, the system imposes absolute control at the project level for all encumberedaccounts.






Budget Integration: Implement Bottom-Up Integration

Budget Integration: Implement Bottom-Up Integration

Defining Bottom-Up Budget Integration for Project Types:


2. Allow Override at Project Level - Check this check box to allow users to modify thedefault budget integration settings at the project level.

3. Budget Type - Select a project budget type to be integrated.

4. Balance Type - For bottom-up integration, the Balance Type must be Budget .

5. Non-Project Budget - Select a General Ledger budget from the list of values.

For Bottom-Up Budgeting, all other budgetary control fields must be blank.

Defining Bottom-Up Budget Integration for Project Templates and Projects:


2. Budget Type - Select a project budget type to be integrated.

3. Balance Type - For bottom-up integration, the Balance Type must be Budget .

4. Non-Project Budget - Select a General Ledger budget from the list of values.

For Bottom-Up Budgeting, all other budgetary control fields must be blank.





Quiz

Answer: a





Summary




Entering ExpendituresChapter 4 - Page 1

Entering Expenditures

Chapter 4





Entering Expenditures





Objectives





Agenda





Costing Flow: Enter Expenditures

Costing Flow: Enter Expenditures

You can use pre-approved batches to enter project-related expenditures directly into OracleProject Costing.





Expenditures Overview


An expenditure is a group of expenditure items, or transactions, that an employee or anorganization incurs for an expenditure period. You charge expenditures to a project to recordactual work performed or cost incurred. Oracle Project Costing uses these terms forexpenditures:

• Expenditure batch

- A user-defined name used to track a batch of pre-approved expenditures, such astimecards and expense reports.

- You can enter the following classes of pre-approved expenditure batches in OracleProject 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 anexpenditure period.

• Expenditure item

- The individual transactions charged to a specific project and task combination.





Multiple Organization Access Control (MOAC)

Multiple Organization Access Control

The multiple organization access control (MOAC) feature allows you to enter and process pre-approved batches in two or more operating units without switching responsibilities.







You enter:

• Expenditure Item Date - The date on which work is performed or a cost is incurred andis 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-leveltasks.

• Assignment Name - When Oracle Project Resource Management is installed, you canassociate labor and expense report expenditures to scheduled work assignments.

• Work Type - A classification of work. You use work types to classify both actual andscheduled work. You can also use work types to classify work to determine the billabilityof expenditure items, classify cross charge amounts into cost, and revenue for cross-charged work, and assign attributes for utilization reporting. Work types roll up toresource and organization utilization categories. This field is required when the PA:

Require Work Type Entry for Expenditures profile option has a value of Yes.





• Expenditure Type - A classification of cost that you assign to each expenditure item. Youcan choose any expenditure type within the expenditure type class that you select for theexpenditure batch.

• Non-Labor Resource and Non-Labor Organization - If the expenditure type class forthe batch is Usages, enter the non-labor resource and its owning organization. This enablesyou to track use of company-owned assets.

• Currency Fields - You can optionally display and enter the currency fields. You can usefolder tools to display to display currency fields. When your cursor is positioned in theExpenditure 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.





Currency Fields for Expenditures

Currency Fields for Expenditures

The currency fields include:

• Functional Currency - The functional currency of the expenditure operating unit.

• Project Currency - The common currency into which all transactions for a particular project are converted.

• Transaction Currency - The currency in which a cost transaction is incurred.

Note: You must use folder tools to display additional currency fields.





Pre-Approved Batch Expenditure Entry Flow Overview

Pre-Approved Batch Expenditure Entry Flow Overview

To enter a pre-approved expenditure batch:

1. Enter batch-level information.

2. Enter an expenditure.

3. Enter expenditure items.

4. Enter additional expenditures and expenditure items as needed.

5. Submit the batch for review.

6. As needed, rework the batch.

7. Release the batch for processing.





Statuses for Pre-Approved Expenditure Batches

Statuses for Pre-Approved Expenditure Batches

Pre-approved expenditure batches can have one of three statuses:

• Working - The expenditure batch is not ready for review. You can enter transactions andmodify their expenditures and expenditure items.

• Submitted - The batch is awaiting review. You can return the batch to Working status(rework ) to make corrections.

• Released - The expenditure batch is released for cost distribution. You can reverseincorrectly entered expenditure items within the batch.





Enter Pre-Approved Batches

Enter Pre-Approved Batches

1. Navigate to the Expenditure Batches window.

2. Select the operating unit the operating unit that incurred the cost.

3. Enter a unique batch name to identify this set of expenditures.

4. Enter the expenditure ending date for the batch. If you enter a date that is not the last dayof an expenditure week, the system automatically updates the date to the next valid weekending date.

5. Choose the expenditure type class for this batch.

6. Optionally, enter a description.

7. Optionally, enable the Reverse Expenditures in a Future Period check box toautomatically reverse the batch. The expenditure type class must be Miscellaneous

Transaction to create an automatically reversing expenditure batch. For more informationregarding this feature, see the section in this lesson titled “Automatically ReversingExpenditure Batches.”





8. Optionally, enter a control total and control count in the Amounts region. Use theRunning Totals and Counts and the Difference columns to verify actual versus enteredtotals.

9. Select the Expenditures button to enter the batch. The status of a new batch is alwaysWorking.

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 haveentered all the expenditure items, you can compare the Control Total with the RunningTotal, 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.





Submitting an Expenditure Batch

Submitting an Expenditure Batch

Verifying Control Totals and Control Counts

Oracle Project Costing verifies control totals and control counts when you submit a batch. Ifthe running total or running count does not equal your control totals, then you cannot submitthe expenditure batch until your totals match. If you do not enter control totals, then OracleProject Costing does not validate control totals.

Reviewing and Releasing Expenditure Batches

Releasing a batch is a second level of review after entry. You can use function security toremove the release capability from the entry person’s Oracle Project Costing responsibility.You can edit expenditure batches before release. The status must be Working to make changes.

Release makes expenditures ready for cost distribution. Release is synonymous with Approval .Releasing a batch automatically releases all the expenditures and expenditure items in the batch.





Reversing an Expenditure Batch

Reversing an Expenditure Batch

The Reverse button is enabled only if the current batch is released. You can reverse importedexpenditure batches only if the transaction source of the batch allows reversals. When youreverse an expenditure batch, Oracle Project Costing reverses all the expenditure items exceptfor:

• Related items

• Expenditure items that are already reversed

• Reversing items (net zero adjusted items)

• Expenditure items created as a result of a transfer adjustment





Correcting Expenditure Batches

Correcting Expenditure Batches

After you submit a batch, you can rework the batch to add, delete, and revise expenditures andexpenditure items. You also must correct a batch if your supervisor rejects and returns asubmitted batch to you. If the batch has a status of Submitted , locate the batch, click theRework button to return its status to Working, and change the expenditure or expenditure item before resubmitting the batch.

If the batch has a status of Released, you can correct individual expenditure items by reversingthe full amount of the original item and then entering the correct information. For example, ifyou entered six hours on a timecard expenditure item when the correct number of hours is four,then you can create a reversing item equal to a negative six hours and add a new expenditure

item of four hours.To correct a released expenditure item:

1. Create a new batch for the correction items.

- The Expenditure Ending date must match the week that includes the expenditure itemyou are reversing.





- Optionally check the All Negative Transactions Entered As Unmatched check box ifyou want to enter transactions with negative amounts and do not want Oracle ProjectCosting 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 inthe Quantity field. Precede negative amounts with a minus (–) sign. If the All

Negative Transactions Entered as Unmatched check box is not enabled, then OracleProject Costing searches for a matching expenditure item and alerts you if it is unableto 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.





Copying an Expenditure Batch

Copying an Expenditure Batch

If you frequently enter similar groups of expenditures, you can copy data from one week to thenext. The Copy function copies all expenditures and, optionally, all expenditure items from aspecified source batch. You need to revise only the items that are different in the new batch.Copying your expenditure batches can reduce your manual data entry requirements when youenter similar groups of expenditures.

Note: You cannot copy expenditure items from a reversed expenditure batch.





Reviewing Project Expenditures


Two expenditure inquiry modes are available in Oracle Project Costing:

• Project - You can view expenditure items for a single project across operating units. Ifyour system uses project security, then you can select only projects that you are allowed tosee. The expenditure items that you view can cross operating units, but you must havesecurity access to an operating unit to view those expenditure items. For example, a project has expenditure items associated with operating units A, B, C, and D. If yourresponsibility only gives you access to operating units B and C, then you can view andadjust only the expenditure items from operating units B and C.

• All - You can view expenditure items across projects and structure your query to retrieve

information across projects within a single operating unit. If you have access to more thanone operating unit, then you must select the operating unit that you want to query. If youhave access to only one operating unit, then that operating is the default value. No projectsecurity is enforced. Oracle Project Costing shows only the expenditure items thatcorrespond to the current operating unit. If a project has expenditure items that arecharged across operating units, then you cannot view these expenditure items. In this case,use the Find Project Expenditure Items window to query these expenditure items.







To view expenditure items (perform an expenditure inquiry):

1. Navigate to the Find Project Expenditure Items or Find Expenditure Items window.

2. Enter your search criteria. You can enter search criteria for a large number of attributesand on multiple tabs at the same time to limit the results of the query.

• Note: For a detailed discussion of the available search criteria, see the Oracle Project Costing User Guide.

3. Choose Find to execute the search, or choose Mass Adjust to process mass adjustment ofexpenditures. For information about mass adjustments, see the lesson titled "PerformingCost Adjustments."

4. From the Expenditure Items window, you can:

• Select the Run Request button and then select which set of predefined programs torun.

• Select the Totals button to view the totals for the expenditure items returned basedon your search criteria.





• 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 thetotal project revenue and bill amounts.

• Select the Item Details button to review the details of this expenditure item. You canthen 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 derivedusing AutoAccounting. You can also view other information about the costdistribution lines, such as PA and GL period, accounting event generation status,and the rejection reason if the generation of the accounting event was notsuccessful. The Cost Distribution Lines window does not display the creditaccount for supplier invoice expenditure items interfaced from Oracle Payables.

- Revenue Distribution Lines - View the revenue transactions generated for aspecific expenditure item. The window displays the default revenue account thatOracle Project Billing derived using AutoAccounting. You can also see the GLand PA posting period for the revenue, accounting event generation status, andthe rejection reason if the generation of the accounting event was not successful.

- AP Invoice - Drill down to the Invoice Overview window in Oracle Payables. Ifthe invoice is matched to a purchase order, then you can drill down to the purchase order from the Invoice Workbench. This option is enabled forexpenditure items whose expenditure type class is either Supplier Invoices orExpense Reports.

- PO Receipt -- Drill down to the Receipt Transaction Summary window inOracle Purchasing. You can also drill down to the related purchase order fromthe Receipt Transaction Summary window. This option is enabled forexpenditure 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 forcontingent worker labor costs that are associated with a purchase order.

• Important: If you define your own detailed accounting rules in Oracle SubledgerAccounting, then Oracle Subledger Accounting overwrites default accounts, orindividual segments of accounts, that Oracle Project Costing derives usingAutoAccounting. In this case, the default accounts displayed on the CostDistribution Lines and Revenue Distribution Lines windows may not be the same asfinal accounts that Oracle Subledger Accounting transfers to Oracle General Ledger.To view the final subledger accounting, use the View Accounting option from theTools menu.





Viewing Accounting Lines

Viewing Accounting Lines

You can use the View Accounting option from the Tools menu to review accounting entries forexpenditure items. You must create accounting in final mode for the accounting eventsassociated with the expenditure item to view accounting entries. If an expenditure item hasmultiple cost distribution lines, then you can view accounting for each cost distribution linethat is accounted in Oracle Subledger Accounting. Similarly, if you adjust an expenditure itemand do not create accounting for the adjustments in Oracle Subledger Accounting, then theView Accounting window only shows the accounted cost distribution lines. If you createaccounting in draft mode, then you can either review the output from the create accounting program or use Subledger Accounting Inquiry to view the draft accounting.

Note: The View Expenditure Accounting window displays final accounting entries fromOracle Subledger Accounting. It does not display default accounts that Oracle Project Costingderives using AutoAccounting.

Note: For both historical (prior to Release 12) expenditure items not migrated to OracleSubledger Accounting, and transactions accounted in an external system and interfaced intoOracle Project Costing, the View Accounting option displays accounts from the costdistributions table in Oracle Project Costing.





Quiz

Answer: a





Quiz

Answer: b





Agenda





Automatically Reversing Expenditure Batches

Automatically Reversing Expenditure Batches

You can create automatically reversing expenditure batches to record cost accruals in OracleProject Costing. Frequently, you receive items and services in one accounting period, whichare then invoiced in another period. You can use automatically reversing expenditure batchesto accrue cost in the period in which it is incurred.

To enter an automatically reversing batch, you must use the Miscellaneous Transactionsexpenditure type class. When you release the batch, Oracle Project Costing creates reversingentries that are accounted in the next General Ledger period.

As you add expenditure items and save the batch, Oracle Project Costing determines the GLdate for each transaction and stores it as an expenditure item attribute called Accrual Date.

Oracle Project Costing determines the accrual date as follows:• If Expenditure Item Date Accounting is used, then the accrual date is the expenditure item

date.

• If Period-End Date Accounting is used, then the accrual date is the period ending date ofthe General Ledger period that includes the expenditure item date.





Releasing the Batch

Releasing the Batch

When you release an expenditure batch with the Reverse Expenditures In a Future Period checkbox enabled, Oracle Project Costing automatically reverses each expenditure itemincluded in the batch. Oracle Project Costing determines the GL date for the reversingexpenditure items when it creates the reversing entries and it stores the date in the AccrualDate attribute.

Oracle Project Costing determines the GL date as follows:

• If Expenditure Item Date Accounting is used, then the accrual date of the reversing item isthe first day of the GL period that follows the GL period that includes the accrual date ofthe original expenditure item.

• If Period-End Date Accounting is used, then the accrual date of the reversing item is thelast day of the GL period that follows the GL period that includes the accrual date of theoriginal expenditure item.

• If the accrual dates for the reversing items fall in a period with a closed status in OracleGeneral Ledger, then the release process fails and an error message appears.





Agenda





Upload Expenditure Batches from Microsoft Excel


You can enter and upload pre-approved expenditure batches using Microsoft Excelspreadsheets. You can connect to the database to validate records during entry, or you cancreate the spreadsheet offline and allow validation to occur during the transaction upload.

Note: If you choose to create the spreadsheet offline, then only mandatory fields associatedwith a list of values are validated during transaction upload. The transaction upload calls theTransaction Import program, where additional transaction validations take place.

Download an Entry Template

You must first download an entry template from Oracle Project Costing. All fields marked withan asterisk are mandatory. If List-Text appears under the column name, then a list of values is

available. To access the list of values, double-click in the column or select List of Values fromthe Oracle menu located at the top of the spreadsheet template.







Once the batch is ready, you can upload the data to the Oracle Project Costing transactionimport interface table. From here, the concurrent program PRC: Transaction Import brings theexpenditure batch into Oracle Project Costing.

Upload Batch

Select Upload from the Oracle menu located at the top of the spreadsheet template. Optionally,select the Parameters button to select upload options. After viewing the Parameters window,you must select Close or Proceed to Upload to return to the Upload window. Select Upload tolaunch the upload process. The upload process updates the message column for each record inthe spreadsheet to indicate whether the upload was successful.

Transaction Import

The upload process populates the transaction import table. Run the PRC: Transaction Import program to import the transactions into the Expenditure Items table. You can optionally use theupload parameter to run the transaction import program automatically.





Upload Contingent Worker Timecards

Upload Contingent Worker Timecards

You can enter contingent worker timecard batches in Microsoft Excel and upload the batchesto Oracle Project Costing:

• Each timecard line is related to a project and purchase order line.

• A amount check is performed against the purchase order during transaction import.

• Oracle Project Costing uses the cost rates stored on the purchase order to calculatecontingent worker labor costs.

• The supplier must submit an invoice. You match the invoice to the purchase order toreduce outstanding balances.

• You interface additional cost, such as non-recoverable tax or invoice price variances, toOracle Project Costing from the supplier invoice in Oracle Payables.

• You can bill contingent worker costs as labor.

To use this integration, you must enable the Import Contingent Worker Timecards with

Purchase Order Integration implementation option. You can optionally set up AutoAccountingfunction transactions to determine default credit and debit accounts for contingent worker laborcosts that are different from the default accounts for employee labor costs.





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 laborand 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 workerassignment in Oracle HRMS.

2. Consolidate contingent worker project-related timecards and enter a timecard batch inMicrosoft 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 thetimecards into Oracle Project Costing. An amount check takes place against the purchaseorder during import.

4. Process contingent worker timecards in Oracle Project Costing:

a. Run PRC: Distribute Labor Costs. The program retrieves cost rates from purchaseorder.

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 anyadditional 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."





Quiz

Answer: a





Agenda





Expenditure Batch Reports

Expenditure Batch Reports

This slide describes the concurrent programs used to generate expenditure batch reports.

• AUD: Expenditure Batch Status - With this report you can identify expenditure batchesthat are ready for release. Use this report to ensure that none of your expenditure batchesgo unprocessed.

• AUD: Pre-Approved Expenditures Entry Audit - Use the AUD: Pre-ApprovedExpenditures Entry Audit report to review pre-approved expenditures. After you enter allexpenditures for an expenditure batch, submit this report and use it to verify that theentered data is correct before you submit your expenditure batch. This report provides asummary for each expenditure batch that displays the total amounts for each expenditure

type in the expenditure batch.





Quiz

Answer: b, c





Agenda





Costing Flow: Import Transactions

Costing Flow: Import Transactions

Oracle Project Costing provides a single open interface, called Transaction Import, to enableyou to load transactions from external cost collection systems into Oracle Project Costing.Transaction Import creates pre-approved expenditure items from transaction data entered inexternal cost collection systems. Examples of external cost collection systems are:

• Timecard entry systems

• Supplier invoice entry systems

• Electronic data collection systems for asset usage (computer, printer, phone, etc.)

• Payroll systems

You can use the Review Transactions window to view and correct transactions that wererejected during import.

Note: You can use Transaction Import to import project-related expense reports into OracleProject Costing from third-party systems. Expense reports that you import into Oracle ProjectCosting must be fully accounted. Oracle Project Costing does not generate accounting eventsto create accounting in Oracle Subledger Accounting for these imported costs.





Overview of Transaction Sources

Overview of Transaction Sources

When you submit Transaction Import, you must identify the source of the transactions that youwant to import.

To import 3rd party transactions, use your import utility to enter this transaction source in theTRANSACTION_SOURCE column of the PA_TRANSACTION_ INTERFACE_ALL table.You then select the transaction source name in the Submit Request window when you want toimport transactions from this source.

For additional information about transaction sources, see the lesson titled "ImplementingExpenditures."





Overview of Transaction Import

Overview of Transaction Import

When you import transaction information from external cost collection systems, Oracle ProjectCosting records the transaction details and the source of the imported transactions duringtransaction import. The PRC: Transaction Import program (also referred to as TransactionImport) validates the transaction information, reports any exceptions, and creates transactionsfor all of the valid transactions.

To import transactions, you first must load transactions for external systems into the PATransaction Interface Table. Your implementation team must determine the method for populating the table.

After you populate the interface table, you use the Submit Request window to run PRC:

Transaction Import to import transactions into Oracle Project Costing. The program selects all pending transactions that satisfy the selection criteria of the request and validates eachtransaction. If a transaction is valid, the program creates expenditure records in Oracle ProjectCosting.

For additional information, see the online course titled "R12 Oracle Projects Advanced -Transaction Import."





Resolving Import Exceptions

Resolving Import Exceptions

If any one expenditure item in an expenditure fails validation, then Oracle Project Costingrejects the entire expenditure and updates each expenditure item in the expenditure with astatus of R (Rejected). However, only the expenditure item that was rejected appears on theexception report. Other expenditure items attached to the rejected expenditure do not appear onthe report. The remainder of the expenditures in the batch interface to Oracle Project Costing.

Note: The transaction import validation logic is different when you run the program PRC:Interface Supplier Costs to import transactions from Oracle Purchasing and Oracle Payables.The program uses predefined supplier cost transaction sources to import expenditure items andit rejects only the expenditure items that fail validation. The program imports the valid

expenditure items in the expenditure.





Quiz

Answer: d





Correcting Rejected Transactions within Oracle Project Costing

Correcting Rejected Transactions within Oracle Project Costing

To make changes to the source information because of invalid data, you can delete the rejectedrows from the interface table, correct the rejected transactions in the feeder system, and reloadthem from the feeder system. You can also correct the transaction in the interface table usingthe Review Transactions window. Oracle Project Costing automatically updates the status ofcorrected items and all other transactions in the same expenditure to P (Pending). The originaland updated values for corrected transactions are stored in the audit table.

You can also use the Review Transactions window to create one or more new transactionswithout loading them from the feeder system. This window was designed to expedite minoradditions to expenditure batches.

Review Transactions Window: Currency-Related FieldsThe Review Transactions window is a folder-type window. Many of the currency fields are notdisplayed in the default folder. You can create folders that display these fields.

Review Transactions Window: Expenditure Item Dates for Supplier Costs

The program PRC: Interface Supplier Costs validates expenditure item dates for supplier coststhat you interface from Oracle Purchasing and Oracle Payables. If the expenditure item date foran expenditure item fails validation, then the program rejects the transaction and leaves it in the





interface table. You must either change the date setup in Oracle Project Costing or change thedate for the expenditure item. You can use the Review Transactions window to change the datefor a rejected expenditure item. Oracle Project Costing picks up the revised date for therejected transaction the next time that you run the program PRC: Interface Supplier Costs. Toupdate the expenditure item date in the Review Transactions window, the Allow Interface Modifications option must be enabled for the transaction source.





Summary




Implementing ExpendituresChapter 5 - Page 1

Implementing Expenditures

Chapter 5





Implementing Expenditures





Objectives





Expenditures Implementation Steps





Agenda





Expenditure Categories

Expenditure Categories

Oracle Project Costing uses expenditure categories to group expenditure types for costing. Anexpenditure category describes the source of your organization’s costs. For example, anexpenditure category with a name such as Labor refers to the cost of labor. You useexpenditure categories when you define organization overrides, for budgeting, and fortransaction controls. In addition, you can use expenditure categories in your AutoAccountingrules and for reporting.

Use the Expenditure Categories window to define an expenditure category. For eachexpenditure category, enter a unique name for the expenditure category and a description.





Define Revenue Categories

Define Revenue Categories

A revenue category describes a source of your organization’s revenue. For example, a revenuecategory with a name such as Labor refers to labor revenue.

Use the Revenue Category Lookups window to define new revenue categories. Revenuecategories are used for grouping expenditure types and event types for revenue and billing.You can use revenue categories for budgeting, for reporting purposes, and in yourAutoAccounting rules.

For additional discussion regarding event types, see the course “R12.x Project BillingFundamentals.”





Define Units

Define Units

A unit of measure records quantities or amounts of an expenditure item. You assign a unit toeach expenditure type. For example, to calculate the cost of computer services using theamount of time a user uses a computer, you can define an expenditure type for computerservices and assign it the unit Hours.

Use the Unit Lookups window to define units.





Expenditure Type Classes

Expenditure Type Classes

An expenditure type class tells Oracle Project Costing how to process an expenditure item.Oracle Project Costing predefines all expenditure type classes.

Oracle Project Costing uses the following expenditure type classes to process labor costs:

• Straight Time - Labor cost calculated using a base cost rate multiplied by hours

• Overtime - Labor cost calculated using a premium cost rate multiplied by hours.

Oracle Project Costing uses the following expenditure type classes to process non-labor projectcosts:

• Expense Reports – Expense reports from Oracle Payables or Oracle Internet Expenses.

You cannot enter expense reports directly into Oracle Project Costing. Expense reportsthat you import into Oracle Project Costing must be fully accounted prior to import.

• Usages - You must specify the non-labor resource for every usage item you charge to a project. For each expenditure type classified by a Usage expenditure type class, you alsodefine non-labor resources and organizations that own each non-labor resource.

• Supplier Invoices - Supplier invoices, discounts, and payments from Oracle Payables oran external system, and receipt accruals from Oracle Purchasing.





• 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 anexternal system or calculated by Oracle Project Costing as separate, summarizedtransactions. These costs are created as a separate expenditure item that has a burdenedcost amount, but has a quantity and raw cost value of zero. You can adjust burdentransactions that are not system-generated.

• Work In Process – You use this expenditure type class for Oracle Project ManufacturingWIP transactions that you interface from Manufacturing to Oracle Project Costing. Youcan also use this expenditure type class when you import other manufacturing costs viaTransaction 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 manufacturingcosts via Transaction Import or when you enter transactions via pre-approved batchentry.





Define Expenditure Types

Define Expenditure Types

An expenditure type is a classification of cost that you assign to each expenditure item youenter in Oracle Project Costing. Defining expenditure types is a key aspect of yourimplementation of Oracle Project Costing. Enter the following information to define anexpenditure type:

• Name - A unique name for the expenditure type.

• Expenditure Category - The expenditure category you want to associate with thisexpenditure type.

• Revenue Category - The revenue category you want to associate with this expendituretype.

• Unit of Measure (UOM) - The unit of measure to use when Oracle Project Costingcalculates the cost for this expenditure type. You must enter Hours for labor expendituretypes.

• Tax Classification Code - Optionally, click Tax Classification Code and select the taxclassification code for customer invoice lines for this expenditure type and operating unit.Oracle Project Costing uses this code as the default tax classification code based on theApplication Tax Options hierarchy that you define in Oracle E-Business Tax for the





combination of Oracle Project Costing and the specified operating unit. For moreinformation on setting up taxes and the hierarchy of tax options for an application andoperating unit, see the Oracle E-Business Tax User Guide.

• Rate Required - If this expenditure type requires a cost rate, then enable the RateRequired check box. Select the Cost Rate button to navigate to the Expenditure Cost Rateswindow, 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 costrate and has a unique name. If you enable the Rate Required check box when you create anon-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 ProjectCosting requires you to enter a quantity in Oracle Payables for invoice distributions usingthat expenditure type. When you interface the invoice distribution to Oracle ProjectCosting, Oracle Project Costing copies the quantity and amount to the expenditure itemand 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 amountyou enter in Oracle Payables.

• Description and Dates - On the Description, Dates tab, enter a description and aneffective from date for the expenditure type. You can optionally enter an effective to datefor the expenditure type.

• Expenditure Type Classes - In the Expenditure Type Class region, select the expendituretype class or classes for this expenditure type.

Attention: After you create and save an expenditure type, you cannot subsequently update thefollowing 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 aunique name. When you enter an end date for an expenditure type, the end date has no affecton 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 thathave an expenditure item date after the end date.





Multiple Expenditure Type Classes Per Expenditure Type

Multiple Expenditure Type Classes Per Expenditure Type

You can assign multiple expenditure type classes to an expenditure type. This feature allowsyou to use a single expenditure type to classify as many different costs as you require. You canuse the same expenditure type for expenditures that have different origins (and thereforedifferent accounting), but which should otherwise be grouped together for costing, budgeting,or summarization purposes.

For example, an expenditure item with the expenditure type Materials can have theexpenditure type class Supplier Invoice if it originated in Oracle Payables, and the expendituretype class Inventory if it originated in Oracle Inventory. This ability enables you to easilygroup these costs together for reporting and budgeting purposes, because the cost rolls up into

the same expenditure type, regardless of the source of the individual transaction.





Quiz

Answer: b





Quiz

Answer: c





Agenda







The transaction control extension enables you to define your own rules to implement company-specific expenditure entry policies. You can validate any transaction entered into OracleProject Costing, including transactions from other Oracle Applications and from externalsystems. The transaction control extension is called during expenditure entry. In addition, the program PRC: Transaction Import calls the transaction control extension to validatetransactions before they are loaded into Oracle Project Costing.

Some examples of rules that you may define are:

• You cannot charge new transactions to projects for which the work is complete. You canonly transfer items to these projects.

• You can charge labor hours for a future date.

The transaction control extension validates expenditure items one at a time. All validation isdone for each expenditure item. Oracle Project Costing checks each expenditure item duringdata entry and the transaction is validated before it commits the transaction to the database.Oracle Project Costing processes the transaction control extension after the standard validation performed for expenditure entry, and after validating any transaction controls entered at the project or task level.





Quiz

Answer: a





AutoApproval Extension

AutoApproval Extension

Use the AutoApproval Extension to define conditions under which expense reports in OracleInternet Expenses or timecards in Oracle Time & Labor are approved automatically. You canconfigure this extension to meet your needs. For additional information, see the Oracle

Projects API's, Client Extensions, and Open Interfaces Reference.





Agenda





Define Transaction Sources

Define Transaction Sources

Transaction sources identify the source of transactions imported into Oracle Project Costingusing Transaction Import. The transaction source determines how Transaction Import processes transactions. The transaction source is used to identify transactions in thePA_TRANSACTION_INTERFACE_ALL table. When you run the concurrent program PRC:Transaction Import, you must enter the transaction source for the transactions that you want toimport into Oracle Project Costing. The Transaction Import program selects all eligible pending transactions in the PA_TRANSACTION_INTERFACE_ALL table that satisfy theselection criteria of the program request and determines the validity of each transaction.

Oracle Project Costing predefines some transaction sources, and you can create others to fit

your business needs. When you create a transaction source, you select the transaction sourceoptions to control the Transaction Import processing. For details about each of the transactionsource options, see the Oracle Projects Implementation Guide and the online course titled"R12 Oracle Projects Advanced - Transaction Import."





Example Predefined Transaction Sources

Example Predefined Transaction Sources

Oracle Projects predefines a set of transaction sources to import cost from Oracle sources. Donot use these transaction sources to import transactions from non-Oracle sources. For acomplete list of predefined transaction sources, see the Oracle Projects implementation Guide.





Example Predefined Transaction Sources: Manufacturing andInventory

Example Predefined Transaction Sources: Manufacturing and Inventory

Oracle Project Costing predefines transaction sources to import transactions from OracleProject Manufacturing and Oracle Inventory. Do not use these transaction sources to importtransactions from non-Oracle sources. For a complete list of predefined transaction sources, seethe Oracle Projects implementation Guide.

For the transaction sources for Inventory, WIP, and WIP Straight Time transactions, the GL

Posting Option in the Project Manufacturing Parameters window determines whether OracleProject Manufacturing or Oracle Project Costing generates accounting events and createsaccounting for the transactions in Oracle Subledger Accounting as follows:

• If the posting option is Manufacturing , then Oracle Project Manufacturing createsaccounting for the transactions in Oracle Subledger Accounting.

• If the posting option is Projects, then Oracle Project Costing creates accounting for thetransactions in Oracle Subledger Accounting. The value that you select for the Account

Option determines the source of the default accounting as follows:





- If the option is set to Use AutoAccounting , then Oracle Project Costing uses thetransaction 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 thetransaction sources with Accounts to import the transactions and the defaultaccounting from Oracle Project Manufacturing.





Quiz

Answer: a





Agenda





Listings

Listings

Use the following concurrent programs to document expenditure setup information:

• IMP: Expenditure Types Definition - Use IMP: Expenditure Types Definition Listing toreview expenditure types. You can print a listing for one or all expenditure categories andfor a specified effective date. If an effective date is specified for the report, then the reportlists only expenditure types that are active as of the date you enter.

• IMP: Revenue Categories - Use the IMP: Revenue Categories Listing to review revenuecategories. For each revenue category listed, this report prints all the associatedexpenditure types and their corresponding expenditure categories. To limit the report toonly 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 ofmeasure.





Summary




Performing Cost ProcessingChapter 6 - Page 1

Performing Cost Processing

Chapter 6





Performing Cost Processing





Agenda





Overview of Costing

Overview of Costing

Costing includes the following major steps:

1. Enter and approve expenditures through the Oracle Project Costing user interface, orimport transactions. You can use Transaction Import to import unaccounted andaccounted transactions. If you import unaccounted transaction, then you must run thecosting programs for the transactions. If you import accounted transactions, then noadditional processing is needed.

2. Distribute costs and derive default accounting. Cost distribution is the act of calculatingthe cost and determining the cost accounting for an expenditure item. Oracle ProjectCosting 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 importthem and do not require further cost distribution processing.

3. Generate cost accounting events. The program PRC: Generate Cost Accounting Eventscollects cost distribution lines in Oracle Project Costing and uses AutoAccounting todetermine the default liability accounts for raw and burden costs. It also generates costaccounting events for Oracle Subledger Accounting.





Overview of Costing

Overview of Costing

4. Create accounting in Oracle Subledger Accounting and transfer the accounting entries toOracle General Ledger. You run the concurrent program PRC: Create Accounting inOracle Project Costing to create accounting entries for accounting events. Depending onthe parameter values you select, the program performs the following tasks:

- Creates subledger accounting entries for unprocessed accounting events. If youdefine your own detailed accounting rules in Oracle Subledger Accounting, thenOracle Subledger Accounting overwrites default accounts, or individual segments ofaccounts, 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: TransferJournal 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

Overview of Costing

In Oracle General Ledger, the Journal Import program takes the summary interfaceinformation 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 journalentry 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 tothe journal entry records you transfer from Oracle Subledger Accounting to Oracle GeneralLedger.

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 fromOracle 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 OracleGeneral Ledger, or alternatively when you submit the program PRC: Transfer Journal Entriesto 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

Costing Concepts

Raw Cost - Cost directly attributable to work performed. Examples of raw cost are salariesand travel expenses.

• Burden Cost - Cost of doing business that supports raw cost and cannot be directlyattributed 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.





Overview of Encumbrance Accounting

Overview of Encumbrance Accounting

Budgetary controls are set to enforce limits, and encumbrance accounting creates reservationsfor planned expenditures. The reservations ensure that funds will be available when projectcosts are incurred, and provide a complete picture of funds available for future use. OracleProject Costing creates project encumbrance entries when you enable top-down budgetintegration for a project.

Budgetary Controls

Budgetary controls enable you to monitor and control expense commitment transactionsentered for a project based on a project cost budget. Expense commitment transactions aretransactions for non-inventory items. Oracle Project Costing enforces budgetary controls for:

• Project-related purchase requisitions and purchase orders entered in Oracle Purchasing

• Contingent worker purchase orders entered in Oracle Purchasing

• Supplier invoices entered in Oracle Payables

• Project-related prepayments not matched to a purchase order and the application ofunmatched prepayments to supplier invoices





Note: Budgetary controls are not enforced for project-related expense reports entered in OraclePayables because you generally enter expense reports after costs are already incurred.Therefore, you should ensure that your procedures for approving expense report expendituresinclude verification of available funds according to your business requirements.

Budget Integration

Oracle Project Costing budget integration features enable you to integrate project budgets with

non-project budgets in Oracle General Ledger. Integration is defined in order to perform bottom-up or top-down budgeting.

For additional information, see the lesson titled "Appendix B: Budgetary Controls And BudgetIntegration."





Quiz

Answer: b





Agenda





Costing Flow: Distribute Costs

Costing Flow: Distribute Costs

After you enter or import expenditures, the next step is to distribute the costs.





Cost Distribution Processing Flow

Cost Distribution Processing Flow

Distribution programs perform the following tasks:

• Calculate raw cost (quantity x rate) in transaction currency

• Calculate burden and burdened cost

• Create and distribute raw cost distribution lines

• Convert all transaction currency amounts to functional currency and project cost currencyamounts

• Create and distribute burden and burdened cost distribution lines

• Determine default accounting using AutoAccounting (debit account for raw cost and

burden cost, debit and credit accounts for total burdened cost)Note: If you are not performing burdening, then you can skip the programs that create anddistribute burden and burdened cost. See the lesson titled "Implementing Burden Costing."





Determining Costs

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 byemployee (includes contingent workers) or by job. You also have the option of overridinglabor cost rates for individual employees and contingent workers. In addition, you candefine 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





Calculating cost for usages and miscellaneous transactions:

• Raw cost is equal to quantity (if quantity is in currency, for example, a currency amount),or alternatively, raw cost is the result of multiplying quantity by a rate (if quantity is not incurrency). You can define cost rates for usage and miscellaneous costs as follows:

- Cost rates by expenditure type

- Cost rates by non-labor resource and owning organization for usages to override the

expenditure type cost rate



• Oracle Project Costing determines costs for usage and miscellaneous costs with thefollowing program:

- PRC: Distribute Usage and Miscellaneous Costs

Determining supplier cost:

• For supplier cost interfaced from Oracle Payables, raw cost for each expenditure item isequal to the supplier invoice distribution line amount (accrual basis accounting) or the payment distribution amount (cash basis accounting) in Oracle Payables.

• For receipt accrual cost interfaced from Oracle Purchasing, raw cost is equal to the receipttransaction amount in Oracle Purchasing.



• Oracle Project Costing determines costs for supplier invoice transactions with thefollowing programs:

- PRC: Interface Supplier Costs

- PRC: Distribute Supplier Cost Adjustments

- PRC: Distribute Supplier Costs Adjustments for a Range of Projects

Determining expense report cost:

• Raw cost for each expenditure item is equal to the expense report invoice distribution lineamount (accrual basis accounting) or the payment distribution amount (cash basisaccounting) in Oracle Payables.



• Receipt amount is the expenditure amount in the receipt currency.

• Note: When you split a receipt in Oracle Payables across multiple expenditure items,Oracle Project Costing does not divide the receipt amount among the expenditure items.As a result, each expenditure item is associated with the full receipt amount.

• Oracle Project Costing determines costs for expense reports with the following programs:

- PRC: Interface Expense Reports from Payables

- PRC: Distribute Expense Report Adjustments





Quiz

Answer: a, c





Burden Cost Calculations

Burden Cost Calculations

Oracle Project Costing calculates burden cost by multiplying raw cost by a burden multiplier.This calculation is represented in the following formula:

• Burden Cost = Raw Cost x Burden Multiplier

Oracle Project Costing calculates total burdened cost by adding burden cost to the raw costamount. This calculation is represented in the following formula:

• Total Burdened Cost = Raw Cost + Burden Cost

You use the burden multiplier to derive the total amount of the burden cost. For additionaldiscussion regarding burdening, see the lesson titled “Implementing Burden Costing.”





AutoAccounting: Distribution Programs

AutoAccounting: Distribution Programs

You create rules in AutoAccounting to specify the default accounts that the distribution programs generate. Oracle Project Costing creates many different accounting transactionsthroughout its business cycle. You use AutoAccounting to specify how to determine the correctaccount for each cost distribution line. See the lesson titled “Accounting for Costs.”





Cost Distribution Concurrent Programs

Cost Distribution Concurrent Programs

Oracle Project Costing provides the following cost distribution concurrent programs

• PRC: Create and Distribute Burden Transactions - Summarizes burden cost andcreates expenditure items for burden transactions. The program creates burdentransactions for projects, depending on the method you use to store burden costs. See thelesson titled “Implementing Burden Costing.”

• PRC: Distribute Borrowed and Lent Amounts - Distributes all transactions identifiedfor Borrowed and Lent accounting. The program determines the transfer price amount foreach transaction and generates the default borrowed and lent accounting entries. You runthis program in the provider operating unit. See the lesson titled "Cross Charge."

• PRC: Distribute Expense Report Adjustments - Computes the burden costs associatedwith adjusted expense report expenditure items and determines the account to which to post the raw costs. The program also identifies if a transaction is cross-charged and, if so,determines the processing it requires.

• PRC: Distribute Labor Costs for a Range of Projects & PRC: Distribute Labor Costs

- Computes the labor costs for timecard hours and determines the default GL account to





which to post the cost. The program also identifies if a transaction is cross-charged anddetermines the processing it requires.

• PRC: Distribute Supplier Cost Adjustments & PRC: Distribute Supplier Cost

Adjustments for a Range of Projects - Processes adjustments made in Oracle ProjectCosting to supplier costs, such as supplier invoices, receipt accruals, supplier payments,and discounts. This program determines the default GL account for supplier cost

adjustments.• PRC: Distribute Total Burdened Costs - Creates total burdened cost distribution lines

for all transactions on a burdened project. The program also identifies and processes anycross-charged transactions. The program creates default accounts for credit and debitdistribution lines for burdened cost. See the lesson titled see the lesson titled“Implementing Burden Costing.”

• PRC: Distribute Usage and Miscellaneous Costs - Computes the costs and determinesthe default GL account to which to post cost for expenditure items with the followingexpenditure type classes: Usages, Burden Transactions, Miscellaneous Transactions, andInventory and WIP transactions not already costed or accounted. The program alsoidentifies if a transaction is cross-charged and, if so, determines the processing it requires.





Agenda





Costing Flow: Create Accounting

Costing Flow: Create Accounting

After you distribute costs, the next step is to create the accounting for the costs. Creatingaccounting consists of four main steps:

1. Generating cost accounting events.

2. Creating accounting for accounting events in Oracle Subledger Accounting.

3. Transferring final subledger accounting to Oracle General Ledger.

4. Importing and posting the journal entries in Oracle General Ledger.





Integration with Oracle Subledger Accounting


Oracle Project Costing fully integrates with Oracle Subledger Accounting so that you cancreate accounting for your project-related transactions.

Oracle Project Costing generates accounting events and creates the subledger accountingentries for the accounting events. Oracle Project Costing predefines setup for Oracle SubledgerAccounting so Oracle Subledger Accounting accepts the default accounting information fromOracle Project Costing without change. Next, Oracle Subledger Accounting transfers the finalaccounting to Oracle General Ledger. If you define your own detailed accounting rules inOracle Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts,or individual segments of accounts, that Oracle Project Costing derives using AutoAccounting.





Generating Cost Accounting Events

Generating Cost Accounting Events

The program PRC: Generate Cost Accounting Events collects cost distribution lines in OracleProject Costing and uses AutoAccounting to determine the default liability account. The valueyou select for the parameter Process Category determines the type of costs that the program processes. The program also creates accounting events for the costs in Oracle SubledgerAccounting. If the program is able to successfully generate an accounting event, then it updatesthe status of the cost distribution line to Accepted . If the program cannot successfullydetermine a liability account or is unable to generate an accounting event, then it updates thestatus of the cost distribution line to Rejected .





AutoAccounting: Generate Accounting Events

AutoAccounting: Generate Accounting Events

When you run program PRC: Generate Cost Accounting Events, Oracle Project Costing usesAutoAccounting to determine the credit side of the accounting for each cost distribution line.See the lesson titled “Accounting for Costs.”





Creating and Transferring Accounting

Creating and Transferring Accounting

The program PRC: Create Accounting creates draft or final accounting entries in OracleSubledger Accounting for unprocessed accounting events. If you define your own detailedaccounting rules in Oracle Subledger Accounting, then Oracle Subledger Accountingoverwrites default accounts, or individual segments of accounts, that Oracle Project Costingderives using AutoAccounting. You can run this program in either draft mode, if you want toreview the results before you create the final accounting, or final mode. You can optionallychoose to transfer final journal entries to Oracle General Ledger, initiate the Journal Import program, and post the journal entries in Oracle General Ledger.

If you do not choose to have the program transfer final journal entries to Oracle General

Ledger, then you can run the program PRC: Transfer Journal Entries to GL to transfer final journal entries from Oracle Subledger Accounting to Oracle General Ledger. This programtransfers final subledger accounting journal entries from Oracle Subledger Accounting toOracle General Ledger and initiates the program Journal Import in Oracle General Ledger.Optionally, you can choose to have the program post journal entries in Oracle General Ledger.





Oracle General Ledger Journal Import

Oracle General Ledger Journal Import

Use Journal Import to import accounting entries into Oracle General Ledger. Journal Import isan Oracle General Ledger program that creates journal entries from transaction data stored inthe Oracle General Ledger GL_INTERFACE table. The program creates and stores journalentries in the following tables: GL_JE_BATCHES, GL_JE_HEADERS, and GL_JE_LINES.You post these journal entries in Oracle General Ledger to update your account balances.





Quiz

Answer: c





Agenda





Streamline Processes

Streamline Processes

Streamline processes submit and monitor a series of concurrent programs that must be runsequentially to complete a function. For example, distributing labor costs, generating costaccounting events, creating accounting in Oracle Subledger Accounting, and transferring thecosts to Oracle General Ledger requires that you submit several programs. Instead of runningthe individual programs one at a time, you can choose to submit the program PRC: SubmitInterface Streamline Processes and select the streamline option DXL: Distribute and InterfaceLabor Costs to GL. The streamline process then submits and monitors the progress of eachseparate program in sequence until all programs complete. Oracle Project Costing providesthree streamline processes:

• PRC: Submit Interface Streamline Processes - Combines programs that sendinformation 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 invoiceadjustments.





• PRC: One-Step Interface Streamline Processes to GL - Generates accounting eventsfor transactions, creates accounting in Oracle Subledger Accounting, transfers subledger journal entries to Oracle General Ledger, runs the program Journal Import, and posts the journal entries in Oracle General Ledger. The streamline options for the program PRC:One-Step Interface Streamline Processes to GL are similar to the streamline options forthe program PRC: Interface Streamline Processes. In addition, you can choose the

streamline option All Streamline Processes to GL to process all distributed costtransactions and released revenue transactions.

Note: For the program PRC: Create Accounting, the interface streamline processesautomatically set the Mode parameter to Final , the Transfer to General Ledger parameter toYes, and the Post in General Ledger parameter to Yes.





Submitting Streamline Processes

Submitting Streamline Processes

To submit a streamline process:

1. Navigate to the Submit Request window.

2. For Name, choose one of the three streamline processes. For details about each of thestreamline options and the programs that each option initiates, see Oracle Projects Fundamentals.

3. Choose the Streamline Option you want to submit.

4. (Optional) Enter the Reschedule Interval, Reschedule Time of Day, and StopRescheduling Date.

5. Choose the Submit button. Oracle Project Costing submits your streamline request. TheStreamline Processing Report lists the name, the concurrent request ID, and thecompletion status of each child programs monitored by the streamline process.





Agenda





Overview of Period Processing

Overview of Period Processing

Project Accounting Periods

A project accounting period is an implementation-defined period against which you canmeasure project performance. Project accounting periods are also referred to as PA periods.

PA Periods and GL Periods

To report project information more frequently than your Oracle General Ledger accounting periods (GL periods) allow, you can define PA periods that are shorter than your GL periods.For example, you can define weekly PA periods and monthly GL periods. You can also createPA periods that match existing GL periods. However, defining PA periods that overlap yourGL periods can create the need for numerous adjustments and journal entries if you wish to

reconcile Oracle Project Costing with Oracle General Ledger. For additional information, seethe course titled "R12.x Project Foundation Fundamentals."





Control of GL Period Statuses for Project Transactions

Control of GL Period Statuses for Project Transactions

You can control the status of GL periods for transaction processing in Oracle Project Costing,without closing the period in Oracle General Ledger. This feature enables you to open andclose GL periods for project transactions independent of the closing processes for the othersubledgers. The status of a GL period for project transactions in Oracle Project Costing candiffer from the same GL period’s status in Oracle General Ledger.

Enabling the Maintain Common PA and GL Periods Implementation Option

If your PA periods and GL periods are identical, you can enable the Maintain Common PA andGL Periods implementation option. When this option is enabled, the system automaticallymaintains PA period statuses as you maintain the GL period statuses. To use this method, you

must define identical PA periods and GL periods.





Transaction Accounting Methods

Transaction Accounting Methods

To give you greater control over when your transactions are accounted, you can enable the profile option PA: Enable Enhanced Period Processing to use expenditure item dateaccounting.





Period End Date Accounting

Period End Date Accounting

With period end date accounting, you maintain PA periods in Oracle Project Costing and GL periods in Oracle General Ledger. Oracle Project Costing derives the PA date for a transactionfrom the expenditure item date and sets the PA date to the PA period ending date. The periodmust be in either Open or Future status. Next, Oracle Project Costing derives GL dates fromPA dates and sets the accounting date to the end date of the corresponding GL accounting period.

Period End Date Accounting Example

In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-2010. This expenditure item date falls within the SEP-10 PA period and because the SEP-10

PA period is open, Oracle Project Costing sets the PA date to 30-SEP-10, the last day of the period.

Next, Oracle Project Costing uses the PA date (30-SEP-10) to derive the GL date. The PA datefalls into the open SEP-10 GL period. The derived GL date is 30-SEP-2010, the end date of theSEP-10 GL period.

Date Derivation

Project Accounting Date (PA Date)





• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report

Adjustments

- The PA date is set to the end date of the earliest PA period that includes or followsthe transaction expenditure item date and has a status of Open or Future.

• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense

Reports Interfaced from Oracle Payables

- The PA date is determined based on the relationship of the transaction expenditureitem date to the GL date entered in Oracle Purchasing or Oracle Payables.

- If the expenditure item date is less than or equal to the GL date, then the PA dateis set to the end date of the earliest PA period that includes or follows the GLdate and has a status of Open or Future.

- If the expenditure item date is greater than the GL date, then the PA date is set tothe end date of the earliest PA period that includes or follows the expenditureitem date and has a status of Open or Future.

Oracle General Ledger Accounting Date (GL Date)


Adjustments- The GL date is set to the end date of the earliest GL period that includes or follows

the PA date of the cost distribution line and has a status of Open or Future accordingto the period status in Oracle General Ledger.



- When you interface supplier costs from Oracle Purchasing and supplier costs andexpense reports from Oracle Payables, Oracle Project Costing copies the GL date foreach distribution line from the GL date entered for the distribution in OraclePurchasing or Oracle Payables.





Expenditure Item Date Accounting

Expenditure Item Date Accounting

With expenditure item date accounting, you maintain both PA periods and GL period statusesfor project transactions in Oracle Project Costing. Oracle Project Costing derives PA dates andGL dates independently, and does not set the accounting dates to the end date of thecorresponding accounting period.

Expenditure Item Date Accounting Example

In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-2010. The expenditure item date falls into the open SEP-10 PA period. The PA date is set tothe expenditure item date of 08-SEP-2010.

The GL period SEP-10 is also open for Oracle Project Costing. Oracle Project Costing sets the

GL date to expenditure item date of 08-SEP-2010.

Date Derivation



Adjustments





- The PA date is set to the transaction expenditure item date if that date falls in a PA period with a status of Open or Future. If the expenditure item date falls in a closedPA period, then the PA date is set to the start date of the earliest open or futureenterable PA period that follows the expenditure item date.



- The PA date is set to the transaction expenditure item date if that date falls in a PA period with a status of Open or Future. If the expenditure item date falls in a closedPA period, then the PA date is set to the start date of the earliest open or futureenterable PA period that follows the expenditure item date.



Adjustments

- The GL date is set to the transaction expenditure item date if that date falls in a GL period with a status of Open or Future according to the period status in Oracle ProjectCosting. If the expenditure item date falls in a closed GL period, then the GL date is

set to the start date of the earliest open or future enterable GL period that follows theexpenditure item date.



- When you interface supplier costs from Oracle Purchasing and supplier costs andexpense reports from Oracle Payables, Oracle Project Costing copies the GL date foreach cost distribution line from the GL date entered for the distribution line in OraclePurchasing or Oracle Payables.





Expenditure Item Date Accounting with Common AccountingPeriods

Expenditure Item Date Accounting with Common Accounting Periods

This method uses expenditure item date accounting and date derivation features with theMaintain Common PA and GL Periods implementation option. You maintain GL periodstatuses for project transactions in Oracle Project Costing and the system automaticallymaintains PA Periods. To use this method, you must define identical PA periods and GL periods. Oracle Project Costing derives a GL date for each transaction and copies the value tothe PA date.

Expenditure Item Date Accounting with Common Accounting Periods Example

In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-2010. The expenditure item date falls into the SEP-10 GL period. While SEP-10 is still open inOracle General Ledger, the GL period for project transactions status is Closed in Oracle ProjectCosting. Because this GL period is closed for project transactions, Oracle Project Costing setsthe GL date to 01-OCT-2010, the start date of the OCT-10 GL period. OCT-10 is the earliestopen or future enterable GL period for project transactions that follows the expenditure itemdate. It then copies the PA date from the GL date.





Date Derivation


• Oracle Project Costing copies the PA date from the GL date.


• Oracle Project Costing uses the Expenditure Item Date Accounting logic.





Sweeping Transaction Accounting Events

Sweeping Transaction Accounting Events

During the period-end closing cycle, you can choose to close the period without accounting forall accounting events. The program PRC: Sweep Transaction Accounting Events enables you tomove accounting events that are in a closed GL period, and have errors or are not fullyaccounted, to the next open GL period so that you can complete closing without accounting forthese transactions. This program changes the date on unaccounted transaction accountingevents to the first day of the next open GL period without accounting for them.

After the program sweeps the transaction accounting events, it also changes the GL date on thecost and revenue distribution lines associated with the accounting events to the first day of thenext open GL period.

When budgetary control is enabled for a project, this program also updates unaccounted project-related commitment transaction accounting events for project-related documents inOracle Purchasing and Oracle Payables. The program updates the GL date that the system useswhen it creates the reversing encumbrance accounting entries.

The following conditions can cause a transaction to become eligible for sweeping:

• The transaction has accounting events with errors.





• The transaction has been accounted in draft mode but not in final mode in OracleSubledger Accounting.

• The transaction has unprocessed accounting events.

When you submit the program, you can choose to run it in either review mode or update mode.Use review mode to view all transactions with exceptions and the reasons for the exceptions.At this point, you can address the exceptions and run the program PRC: Create Accounting in

final mode to complete the accounting for the transaction. Alternatively, if you do not want tocorrect the exceptions at this time, run the sweep transaction accounting events program inupdate mode to change the dates on the unaccounted accounting events to the first day of thenext open GL period.

Upon completion, the sweep transaction accounting events program generates an output reportthat shows the results of the program.

Note: If you sweep revenue transactions, and you use Project Status Inquiry, ProjectPerformance Reporting, or Oracle Daily Business Intelligence for Projects, then you must runthe appropriate refresh or update programs so that reporting tool accurately reports the GL period. For additional information, see Oracle Projects Fundamentals.

Note: Before you sweep transaction accounting events, consider the impact on other related processing such as burden cost accounting, asset capitalization, allocations, and non-CIPassets. For example, if the raw cost for a transaction is successfully accounted and thetransaction accounting event for the burden cost is in error, then when you sweep transactionaccounting events to the next period, you can end up with the raw cost posted to one period and burden cost posted to the following period.





Quiz

Answer: a





Summary




Accounting for CostsChapter 7 - Page 1

Accounting for Costs

Chapter 7





Accounting for Costs





Objectives





Agenda





Overview of Accounting for Costs

Overview of Accounting for Costs

Oracle Project Costing creates accounting transactions throughout its business cycle. You canuse AutoAccounting to specify how to determine the correct account for each transaction.

Oracle Project Costing generates accounting events and creates accounting for the accountingevents in Oracle Subledger Accounting. Oracle Project Costing predefines setup in OracleSubledger Accounting so that the create accounting program accepts default accounts fromAutoAccounting without change. If you define your own detailed accounting rules in OracleSubledger Accounting, then Oracle Subledger Accounting overwrites default accounts, orindividual segments of accounts, that Oracle Project Costing derives using AutoAccounting.

The Account Generator uses Oracle Workflow to derive default account code combinations.

Oracle Payables and Oracle Purchasing use the Account Generator to determine the defaultaccount code combinations for purchasing requisitions, purchase orders, supplier invoices, andexpense reports based on the project information entered. AutoAccounting, the AccountGenerator, and Oracle Subledger Accounting each provide functionality to create accountingfor project-related supplier costs and expense reports. When you implement Oracle Purchasingand Oracle Payables integration with Oracle Project Costing, carefully consider how to set upthe account derivation logic in each location.





AutoAccounting

AutoAccounting

When you implement AutoAccounting, you define the rules governing which general ledgeraccounts Oracle Project Costing uses under which circumstances. Oracle Project Costing usesthe rules you define whenever it performs an accounting transaction.

The AutoAccounting feature requires that you allow dynamic insertion of new accountcombinations. 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 upAutoAccounting so that Oracle Project Costing can determine valid default accounts. TheAutoAccounting setup enables programs, such as programs that distribute costs and generate

cost accounting events, to determine the default accounts that Oracle Project Costing sends toOracle Subledger Accounting. For example, if use total burdened cost accounting and set upyour own rules in Oracle Subledger Accounting, then you also need to define AutoAccountingfor total burdened costs so Oracle Project Costing can minimally determine a default debit andcredit accounts.





AutoAccounting Rules

AutoAccounting Rules

AutoAccounting rules are formulas (or methods) that you use to derive each segment withinyour account structure based on the type of transaction. Each rule can use one of threeintermediate 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 onmultiple values and conditional statements.

To implement AutoAccounting, you define AutoAccounting rules to generate accountcombinations. You then assign a set of rules to each AutoAccounting transaction you want touse for your company.





AutoAccounting Rule Mapping

AutoAccounting Rule Mapping

Each AutoAccounting rule you define supplies one Accounting Flexfield segment value at atime. Thus, you need to specify one AutoAccounting rule for each segment in your AccountingFlexfield, for each AutoAccounting transaction you want to use. Some of the AutoAccountingrules you define can be quite simple, such as always supplying a constant company code ornatural account. Others can draw upon context information (parameters), such as theexpenditure type of an expenditure item or the organization that owns a particular non-laborresource. You can use multiple parameters to provide a segment value. You can reuse the sameAutoAccounting rules for many different functions and their transactions.

For each rule that you define, only one segment value within the entire account structure is

supplied at a time. Thus, you specify one AutoAccounting rule for each segment in youraccount structure for each AutoAccounting transaction.





Constant Value

Constant Value

Use a constant value when you always supply a particular intermediate value (usually anAccounting Flexfield segment code). If you specify Constant as the rule intermediate valuesource, then enter the value that you want Oracle Project Costing to supply as the intermediatevalue.





Parameter Value

Parameter Value

When you define an AutoAccounting rule, you can use a predefined parameter as an inputvalue. 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 yourAutoAccounting rules. Not all of the parameters are available for all functions. The CustomerID 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 parametersavailable for each function.





SQL Select Statement Value

SQL Select Statement Value

A SQL select statement value enables you to execute a SQL select statement to retrieve anintermediate value. You can make the rule dependent on multiple values and conditionalstatements. SQL statements are intended to process rules that depend on more than one parameter. You can define rules to read any value by using a SQL select statement. You shouldconsider the performance implications of using SQL statements. For example:

IF the project type is overhead,

THEN use the expenditure organization parameter.

ELSE use the project organization parameter.

Although many companies have implemented AutoAccounting SQL statement rules in a production environment, you should tune your SQL statement and test the AutoAccountingsetup against volume data to check their performance quality before implementation.

AutoAccounting rules with SQL statements are intended to process rules that are dependent onmore than one parameter. They are not intended to derive additional parameters using SQL thataccesses application tables. This type of use can affect processing performance and may not besupported based on the AutoAccounting function.





Lookup Sets

Lookup Sets

A lookup set is an implementation-defined list that corresponds to the account segments. Todefine a lookup set, you specify pairs of values. For each intermediate value, you specify acorresponding account segment value. One or more related pairs of intermediate values andsegment values form a lookup set. When you define lookup sets, lists of values are notavailable.

You need to define a lookup set before you can use it in a rule. However, if you prefer todefine your rules before completing your lookup sets, you can define each lookup set’s nameand 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 andresubmit the program that triggered the AutoAccounting error. If AutoAccounting does notfind a matching segment value in the lookup set, then it provides an error message (InvalidAccounting Flexfield) to notify you that it could not build a valid Accounting Flexfieldcombination. You must correct your AutoAccounting setup and resubmit the program thattriggered the AutoAccounting error.





Descriptive Flexfields on Setup Entities

You can use the descriptive flexfield attributes to store values used in AutoAccounting insteadof maintaining lookup sets for entities. These entities include:

• Agreement types

• Budget entry methods and budget types

• Class categories and class codes

• Compensation rule sets

• Event types

• Expenditure categories and expenditure types

• Burden cost codes

• Lookup sets

• Non-labor resources and non-labor resource organizations sources

• Project role types

• Transaction sources





Selecting a Segment Value Source

Selecting a Segment Value Source

After you specify an intermediate value, you specify one of the following segment valuesources to indicate whether the intermediate value is already a valid segment value or whetherAutoAccounting needs to translate it into a segment value using a lookup set:

• Intermediate Value

- Supply the intermediate value as a segment value; do not use a lookup set.

• Segment Value Lookup Set

- Look up the intermediate value in a lookup set; translate the intermediate value intothe corresponding segment value.

You do not always need to use a lookup set when you write an AutoAccounting rule. If youdefine a simple constant rule, then you do not need to use a lookup set to supply a segmentvalue because you generally supply a valid segment value as the constant.





Assign Rules

Assign Rules

Function

For each accounting transaction, you define rules to determine the appropriate account tocharge. Each accounting transaction is identified by an AutoAccounting function.AutoAccounting functions are components of programs that you submit to generate accountingentries.

Function Transactions

When you are assigning rules to an AutoAccounting function, you can assign different rules todifferent 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 identifycommonly used conditions. You can assign rules to function transactions for eachAutoAccounting function. Complete the following steps to assign AutoAccounting rules toAutoAccounting functions and function transactions:

• Enable each function transaction you want to use.

• For each function transaction you enable, specify an AutoAccounting rule for eachsegment of your Accounting Flexfield.





Assign rules to function transactions to tell Oracle Project Costing which AutoAccountingrules to use under which circumstances. In cases where an AutoAccounting function consistsof several distinct function transactions, you assign rules to each function transaction that youwant to use. These rule assignments determine which account AutoAccounting uses to processthat function transaction. Oracle Project Costing attempts to use the most appropriate functiontransaction. If you have not enabled that function transaction, then it tries to use the next most

appropriate transaction. Oracle Project Costing continues this process until it finds an enabledfunction transaction.

Segment Rule Pairings

After you enable a function transaction, you match each segment in your Accounting Flexfieldwith the appropriate AutoAccounting rule. For example, if you have a two-segmentAccounting Flexfield containing a Company segment and an Account segment, you assign onerule to the Company segment and one rule to the Account segment. You use the AssignAutoAccounting Rules window to enable AutoAccounting function transactions and assignrules to them.





Quiz

Answer: b





AutoAccounting for Costs Implementation Steps

AutoAccounting for Costs Implementation Steps

Oracle Project Costing uses AutoAccounting to generate default accounting for costtransactions. When you implement AutoAccounting, you define rules that determine accountsthat Oracle Project Costing assigns to transactions to meet your business requirements. Youcan optionally define your detailed accounting rules in Oracle Subledger Accounting. If youdefine your own detailed accounting rules in Oracle Subledger Accounting, then OracleSubledger Accounting overwrites default accounts, or individual segments of accounts, thatOracle Project Costing derives using AutoAccounting.

Note: If you set up your own rules in Oracle Subledger Accounting, then you still set upAutoAccounting so that Oracle Project Costing can determine valid default accounts. The

AutoAccounting setup enables programs, such as programs that distribute costs and generatecost accounting events, to determine the default accounts that Oracle Project Costing sends toOracle Subledger Accounting. For example, if use total burdened cost accounting and set upyour own rules in Oracle Subledger Accounting, then you also need to define AutoAccountingfor total burdened costs so Oracle Project Costing can minimally determine a default debit andcredit accounts.





Accounting for Labor Costs

Accounting for Labor Costs

Oracle Project Costing uses the Labor Cost Account and the Labor Cost Clearing Accountfunctions to determine the default cost accounting for transactions associated with the Straight

Time and Overtime expenditure type classes.

Labor Cost Account Function

When you run PRC: Distribute Labor Costs or PRC: Distribute Labor Costs for a Range of

Projects, Oracle Project Costing calculates labor cost amounts based upon employee labor costoverrides and labor costing rules. After calculating labor costs, Oracle Project Costing uses theLabor Cost Account transactions to debit a default expense account for raw labor costs.

Labor Cost Clearing Account Function

When you run PRC: Generate Cost Accounting Events for the Labor Cost process category,the program credits a default payroll clearing liability account to balance the labor expenseaccount. The program also generates cost accounting events in Oracle Subledger Accounting.You can assign different sets of rules to and enable the Contingent Worker Labor and Employee Labor function transactions to generate a different default clearing account based onthe person type. Alternatively, you can assign rules to and enable only the All Labor functiontransaction to use the same rules for employees and contingent workers.





Accounting for Expense Report Costs

Accounting for Expense Report Costs

Oracle Project Costing uses the Expense Report Cost Account function to determine theexpense default debit account for transactions associated with the Expense Reports expendituretype class.

Expense Report Cost Account Function

When you run PRC: Distribute Expense Report Adjustments, Oracle Project Costing calculatesand distributes costs originating from expense report adjustments, and uses the Expense ReportCost Account function transactions to determine which default expense account to debit forexpense report costs.

Expense Report Adjustment Liability Account

When you run PRC: Generate Cost Accounting Events for the Supplier Cost process category,the program credits a default supplier cost liability account to balance the supplier cost expenseaccount. If you specify a default account in Oracle Project Costing implementation options,then the program uses the Default Supplier Cost Credit Account . Otherwise, you must set upOracle Subledger Accounting to derive the account. The program also generates costaccounting events in Oracle Subledger Accounting.





Accounting for Usage Costs

Accounting for Usage Costs

Oracle Project Costing uses the Usage Cost Account and the Usage Cost Clearing Accountfunctions to determine the default cost accounting for transactions associated with the Usages

expenditure type class.

Usage Cost Account Function

When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing usesthe Usage Cost Account transactions to debit a default expense account for raw usages costs.

Usage Cost Clearing Account Function

When you run PRC: Generate Cost Accounting Events for the Usage Cost process category,the program credits a default asset usages liability account to balance the usages expenseaccount. The program also generates cost accounting events in Oracle Subledger Accounting.





Accounting for Miscellaneous Costs

Accounting for Miscellaneous Costs

Oracle Project Costing uses the Misc Trans Cost Account and the Misc Trans Cost ClearingAccount functions to determine the default cost accounting for transactions associated with the Miscellaneous Transaction expenditure type class.

Miscellaneous Transaction Cost Account Function

When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing usesthe Misc Trans Cost Account transactions to debit a default expense account for rawmiscellaneous costs.

Miscellaneous Transaction Clearing Account Function

When you run PRC: Generate Cost Accounting Events for the Miscellaneous Cost processcategory, the program credits a default miscellaneous cost liability account to balance themiscellaneous cost expense account. The program also generates cost accounting events inOracle Subledger Accounting.





Accounting for Burden Transactions

Accounting for Burden Transactions

Oracle Project Costing uses the Burden Cost Account and the Burden Cost Clearing Accountfunctions to determine the default cost accounting for transactions associated with the Burden

Transaction expenditure type class.

Burden Cost Account Function

When you run PRC: Create and Distribute Burden Transactions, Oracle Project Costing usesthe Burden Cost Account transactions to debit a default expense account for the burden costs.

Burden Cost Clearing Account Function

When you run PRC: Generate Cost Accounting Events for the Burden Cost process category,the program credits a default burden cost liability account to balance the burden cost expenseaccount. The program also generates cost accounting events in Oracle Subledger Accounting.





Accounting for Total Burdened Cost


Oracle Project Costing uses the Total Burdened Cost Debit and the Total Burdened Cost Creditfunctions to determine the default cost accounting for total burdened costs.

Total Burdened Cost Debit/Credit

When you run PRC: Distribute Total Burdened Cost , Oracle Project Costing creates two burdened cost distribution lines for the total burdened cost. One distribution line holds thedefault account for the burdened cost debit and the other distribution line holds the defaultaccount for the burdened cost credit. Oracle Project Costing creates these two distributions forall expenditure items charged to projects which are defined to burden costs.

The Total Burden Costs Debit/Credit function consists of the following functions:

• Total Burdened Cost Debit

• Total Burdened Cost Credit





Accounting for WIP and Inventory Costs

Accounting for WIP and Inventory Costs

Oracle Project Costing uses the WIP Cost Account and the WIP Cost Clearing Accountfunctions to determine the default cost accounting for transactions associated with the Work in

Process (WIP) expenditure type class. In addition, Oracle Project Costing uses the InventoryCost Account and the Invent. Cost Clearing Account functions to determine the default costaccounting for transactions associated with the Inventory expenditure type class.

WIP Cost Account Function

When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing usesthe WIP Cost Account transactions to debit a default expense account for raw work in processcosts.

WIP Cost Clearing Account Function

When you run PRC: Generate Cost Accounting Events for the Work in Process Cost processcategory, the program credits a default work in process cost liability account to balance thework in process expense account. The program also generates cost accounting events in OracleSubledger Accounting.





Inventory Cost Account Function

When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing usesthe Inventory Cost Account transactions to debit a default expense account for raw inventorycosts.

Invent. Cost Clearing Account Function

When you run PRC: Generate Cost Accounting Events for the Inventory Cost process category,the program credits a default inventory cost liability account to balance the inventory expenseaccount. The program also generates cost accounting events in Oracle Subledger Accounting.





Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments

When you enter project-related supplier invoices in Oracle Payables or receipt accruals inOracle Purchasing, Oracle Payables or Oracle Purchasing invokes the Account Generator inreal time. The Account Generator derives the Accounting Flexfield values based on projectinformation in much the same way that AutoAccounting works in Oracle Project Costing programs. After you interface supplier costs to Oracle Project Costing, you can adjust thesupplier cost expenditure items in Oracle Project Costing. Oracle Project Costing processesthese supplier invoice adjustments using the Supplier Invoice Cost Account AutoAccountingfunction.

Supplier Invoice Cost Account Function

Oracle Project Costing uses the Supplier Invoice Cost Account function to debit theappropriate default expense account for supplier cost adjustments (includes adjustments toexpenditure items from invoices, receipts, and payments).

When you run PRC: Distribute Supplier Cost Adjustments or PRC: Distribute Supplier Cost

Adjustments for a Range of Projects, Oracle Project Costing uses the Supplier Invoice CostAccount function to debit a default expense account for raw supplier costs.





Supplier Cost Adjustment Credit Account

When you run PRC: Generate Cost Accounting Events for the Supplier Cost process category,the program credits a default supplier cost liability account to balance the supplier cost expenseaccount. If you specify a default account in Oracle Project Costing implementation options,then the program uses the Default Supplier Cost Credit Account . Otherwise, you must set up

Oracle Subledger Accounting to derive the account. The program also generates costaccounting events in Oracle Subledger Accounting.





Listings

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 functionand 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 reportdisplays the type of its intermediate source and the corresponding value for that source. Ifthe 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 intermediatevalue to the final segment value. If the segment value source is a lookup set, then thisreport displays the name of that lookup set.

• IMP: AutoAccounting Segment Rule Pairings - For each function, this report displayseach of the function’s transactions. It also lists the AutoAccounting rule and key flexfieldsegment pairings for each transaction. This report also displays the function’s transactionswithout paired segments and rules.





Quiz

Answer: d





Agenda





Account Generator

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 defaultaccount code combinations for purchasing requisitions, purchase orders, supplier invoices, andexpense reports based on the project information entered. You define functions and processesto derive the Accounting Flexfield combinations. You can optionally customize the AccountGenerator 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 projectinformation, you must change the default processes so that they use the project information.For more information, see the “Oracle Purchasing User’s Guide.”

Oracle Payables





How the Account Generator generates default charge accounts for invoices and expense reportsdepends on whether you are entering an invoice or expense report that contains project and taskinformation:

• Supplier invoices

- Oracle Payables (Invoices window) calls the Project Supplier Invoice AccountGenerator.

• Oracle Internet Expenses and Oracle Payables expense reports

- Oracle Internet Expenses or Oracle Payables calls the Project Expense ReportAccount Generator.

PA: Allow Override of PA Distributions in AP/PO

You use the profile option PA: Allow Override of PA Distributions in AP/PO to controlwhether users can override the account number that the Account Generator derives for project-related distributions. Settings for this profile options are:

• Yes - User is allowed to update and override the generated Account.

• No - User is not allowed to update and override the generated Account.

• (No Value) - Equivalent to Yes.

For more information regarding the Account Generator and Oracle Project Costing, see theOracle Projects Implementation Guide.





Account Generator Terminology

Account Generator Terminology

The Account Generator uses Oracle Workflow to derive default account code combinations.AutoAccounting determines default account combinations for all other project-relatedtransactions.





Implementing Accounting for Project-Related Supplier Costs andExpense Reports

Implementing Accounting for Project-Related Supplier Costs and ExpenseReports

AutoAccounting, the Account Generator, and Oracle Subledger Accounting each providefunctionality to create accounting for project-related supplier costs and expense reports. Whenyou implement Oracle Purchasing and Oracle Payables integration with Oracle ProjectCosting, you must carefully consider how to set up the account derivation logic in eachlocation.

• Oracle Purchasing Account Generator (required) - Oracle Purchasing uses theAccount Generator to derive default debit accounts for project-related purchasing

documents.

• Project Supplier Invoice Account Generator (required) - Oracle Payables uses theAccount Generator to derive default debit accounts for project-related supplier invoicesthat are not matched to a purchase order.

- Oracle Payables always uses the Account Generator for project-related invoices. Youmust set up the Account Generator to generate a default account, even if the profileoption PA: Allow Override of PA Distributions in AP/PO. option is set to Yes.





- In addition, Oracle Project Costing uses the Account Generator to derive a defaultdebit account for supplier cost and expense report adjustments that you perform inOracle Project Costing. Oracle Project Costing uses this information to determinewhether to allow the adjustment when you enable Automatic Offsets in OraclePayables. Oracle Project Costing also uses this information to determine whether anadjustment can potentially affect tax recoverability.

• Project Expense Report Account Generator (required) - Oracle Internet Expenses andOracle Payables (Invoices window) use the Account Generator to derive default debitaccounts for project-related expense reports. You set up the Account Generator when youimplement Oracle Payables.

• Supplier Invoice Cost Account AutoAccounting Function (required) - Oracle ProjectCosting uses this AutoAccounting function to derive default debit accounts for suppliercost adjustments that you perform in Oracle Project Costing.

• Expense Report Cost AutoAccounting Function (required) - Oracle Project Costinguses this AutoAccounting function to derive default debit accounts for expense reportadjustments that you perform in Oracle Project Costing.

• Default Supplier Cost Credit Account Implementation Option (optional) - The program PRC: Generate Cost Accounting Events uses the specified account as the defaultcredit account for supplier cost and expense report adjustments that you perform in OracleProject Costing.

• User-defined Setup in Oracle Subledger Accounting for Supplier Cost Adjustments

(optional) - Oracle Project Costing predefines setup in Oracle Subledger Accounting sothat the create accounting program accepts the accounting for supplier cost and expensereport adjustments from Oracle Project Costing without change. You can optionally defineyour own detailed accounting rules in Oracle Subledger Accounting.

- If you allow adjustments to supplier costs in Oracle Project Costing and you do notdefine a default supplier cost credit account in Oracle Project Costing implementation

options, then you must set up Oracle Subledger Accounting to derive the creditaccount for supplier cost adjustments.





Quiz

Answer: a





Agenda





Encumbrance Accounting and Project Budgets

Encumbrance Accounting and Project Budgets

Oracle Projects creates project encumbrance entries when you enable top-down budgetintegration for a project. Oracle Purchasing and Oracle Payables create encumbrance entries torelieve the existing encumbrances and to create new encumbrance accounting entries. OracleProjects provides this setup in Oracle Purchasing and Oracle Payables so that theseapplications can create encumbrance for burden costs.

Oracle Purchasing and Oracle Payables create encumbrance journals whenever any fundsrelated action is performed for a document. For example, when you perform a Check Fundsaction for document, the encumbrance accounting events are processed to create theencumbrance journals in draft mode. When you perform a Reserve Funds action for a

document, the encumbrance accounting events are processed to create the encumbrance journals in final mode and the funds balances are updated. After processing is complete, youcan review the updated funds balances.

If you define your own detailed accounting rules in Oracle Subledger Accounting, then OracleSubledger Accounting overwrites default accounts, or individual segments of accounts, thatOracle Purchasing or Oracle Payables derives using the Account Generator.





Project Budget Account Generation Workflow

Project Budget Account Generation Workflow

Oracle Project Costing uses the Project Budget Account Generation workflow process togenerate default accounts when a project budget is integrated with a non-project budget. Youmust customize the Project Budget Account Generation workflow process to generate accountsaccording to your business needs.

For additional information, see the lesson titled "Appendix B: Budgetary Controls and BudgetIntegration."





Quiz

Answer: b





Agenda





Overview of Oracle Subledger Accounting

Overview of Oracle Subledger Accounting

Oracle Subledger Accounting is an intermediate step between each of the subledgerapplications and Oracle General Ledger. Oracle Subledger Accounting creates the finalaccounting for subledger journal entries and transfers the accounting to Oracle General Ledger.It stores a complete and balanced subledger journal entry in a common data model for each business event that requires accounting.

Oracle Subledger Accounting provides a uniform approach to accounting and a common set oftools that enable you to configure accounting rules for applications that require accounting. Itincludes a common user interface and a set of programs that can generate accounting forOracle and non-Oracle applications.

When you set up rules in Oracle Subledger Accounting, you can define the types of lines,descriptions, and accounts to store on journal entries. Oracle Subledger Accounting partitionsdata by subledger application, while storing the information in a common model.







Oracle Project Costing fully integrates with Oracle Subledger Accounting so that you cancreate accounting for your project-related transactions.

Oracle Project Costing generates accounting events and creates the subledger accountingentries for the accounting events. Oracle Project Costing predefines setup for Oracle SubledgerAccounting so Oracle Subledger Accounting accepts the default accounting information fromOracle Project Costing without change. Oracle Subledger Accounting transfers the finalaccounting to Oracle General Ledger. If you define your own detailed accounting rules inOracle Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts,or individual segments of accounts, that Oracle Project Costing derives using AutoAccounting,

or the Project Budget Account Generation workflow for integrated budgets.







Oracle Project Costing generates accounting events for the business events that it processes andthen creates subledger accounting entries for the accounting events.

For example, a business event takes place when an employee charges time to a project. Afteryou distribute costs for the labor expenditure items, you run PRC: Generate Cost Accounting Events to generate accounting events. Next, you run PRC: Create Accounting to createaccounting entries for the accounting events in Oracle Subledger Accounting.







As the foundation of the event model, Oracle Project Costing predefines event entities. Anevent entity enables Oracle Subledger Accounting to handle the accounting for similar businessevents in a consistent manner. The three event entities are Expenditures, Budgets, and Revenue(Oracle Project Billing).

Each event entity is associated with one or more event classes. An event class represents acategory of business events for a particular transaction type or document. Event classes groupsimilar event types and enable the sharing of accounting definitions.

An event type represents a business operation that you can perform for an event class. Anaccounting event has both an event class and an event type that affect the subledger accounting

entries. Event types provide the lowest level of detail for storing accounting definitions.Oracle Project Costing provides a predefined set of event classes and event types for eachaccounting event entity. Oracle Project Costing also predefines accounting event class options

for each event class to specify the detailed information about the event class. For example, theaccounting event class options specify the general ledger journal category and the balance type(actual, encumbrance, or budget) for each event class.





Quiz

Answer: a





Agenda





Oracle Subledger Accounting for Costs Implementation Steps

Oracle Subledger Accounting for Costs Implementation Steps

You can optionally set up your own accounting rules in Oracle Subledger accounting. Foradditional information, see the Oracle Subledger Accounting Implementation Guide.





Oracle Subledger Accounting for Costs Implementation Steps(continued)

Oracle Subledger Accounting for Costs Implementation Steps (continued)

You can optionally set up your own accounting rules in Oracle Subledger accounting. Foradditional information, see the Oracle Subledger Accounting Implementation Guide.





Sources and Custom Sources

Sources and Custom Sources

Oracle Project Costing predefines a set of sources. Sources are pieces of information thatOracle Subledger Accounting uses to determine how to create accounting for an accountingevent. Oracle Project Costing assigns the predefined sources to accounting attributes.Accounting attributes are values that Oracle Subledger Accounting needs to successfully createsubledger journal entries. For example, for the event class Labor Cost , Oracle Project Costingassigns the source Raw Cost to the accounting attribute Entered Amount . The program PRC:Create Accounting uses the raw cost value from the labor cost distribution line to determine theentered amount for the subledger accounting journal entry.

You can optionally define custom sources to extend the list of sources available to application

accounting definitions. To create custom sources, you write PL/SQL functions that use the predefined sources and constant values as parameters. For example, if you capture thegeographic region to which each organization belongs in a descriptive flexfield segment, thenyou can create a custom source to use the information in your application accountingdefinitions. You use the expenditure organization (a predefined source) as a parameter in thedefinition of the custom source. For information about how to define custom sources, see theOracle Subledger Accounting Implementation Guide.





Journal Entry Methods and Definitions

Journal Entry Methods and Definitions

Oracle Project Costing provides predefined accounting setup for Oracle Subledger Accounting.If you use the predefined setup, then Oracle Subledger Accounting accepts the default accountsfrom Oracle Project Costing without change. You can optionally define your own detailedsubledger accounting rules. Many different components come together to form the subledgeraccounting setup:

• Subledger Accounting Method: A group of common application accounting definitionsthat determines how Oracle Subledger Accounting processes accounting events. Thesubledger accounting method groups application accounting definitions from subledgerapplications such as Oracle Project Costing, Oracle Payables, Oracle Purchasing, and

Oracle Receivables. This grouping capability enables you to assign a set of applicationaccounting definitions collectively to a ledger.

• Application Accounting Definitions: Application accounting definitions are collectionsof setup components for a subledger application that determine how Oracle SubledgerAccounting processes accounting events to create subledger and general ledger journalentries. Application accounting definitions assign journal lines definitions to event classand event type combinations.





• Journal Lines Definitions: Journal lines definitions group journal line types, accountderivation rules, and journal entry descriptions into a complete set of journal line typeswithin an event class or event type.

• Journal Line Types: Journal line types determine the characteristics of subledger journalentry lines for an event class. These characteristics determine whether the line is used tocreate actual, budget, or encumbrance entries, whether the line is a debit or a credit,

whether matching lines are merged, and whether data is transferred to the general ledger insummary or detail form.

• Account Derivation Rules: Account derivation rules determine the Accounting Flexfieldvalues for subledger journal entries. You can define account derivation rules in OracleSubledger Accounting that generate either a value for a single Accounting Flexfieldsegment or a complete Accounting Flexfield account code combination.

• Mapping Sets: Mapping sets enable you to assign a specific output value to anAccounting Flexfield or Accounting Flexfield segment. You use mapping sets when youset up account derivation rules. Account derivation rules determine the AccountingFlexfield values for subledger journal entries.

• Journal Entry Description: The journal entry description determines both the contentand sequence in which the elements of the description appear. You assign journal entrydescriptions to headers and lines in the application accounting definition. OracleSubledger Accounting assigns the descriptions to the journal header and lines when itcreates the draft or final accounting.

For additional information, see the Oracle Subledger Accounting Implementation Guide.





Associating Subledger Accounting Methods and Ledgers

Associating Subledger Accounting Methods and Ledgers

You must assign a subledger accounting method to a ledger. Assigning different subledgeraccounting methods to different ledgers enables you to create multiple accountingrepresentations of transactions.





Post-Accounting Programs

Post-Accounting Programs

Subledger applications use post-accounting programs to transfer transaction data betweensubledgers based on the accounting generated from the transaction data. Oracle SubledgerAccounting uses accounting classes to classify journal entry lines. The post-accounting programs distinguish journal lines for processing based on the accounting class assigned toeach journal entry line.

Oracle Project Costing provides two post-accounting programs, one for debits and one forcredits, to obtain final accounting information from Oracle Subledger Accounting because theaccounting that Oracle Project Costing creates using AutoAccounting may not be the same asthe final accounting that Oracle Subledger Accounting transfers to Oracle General Ledger.

Oracle Project Costing uses post-accounting programs to determine which journal entry linesto retrieve from Oracle Subledger Accounting when Oracle Project Costing performs thefollowing activities:

• Groups asset lines on capital projects

• Generates audit reports





• Creates a reversing entry for expenditure items that you imported into Oracle ProjectCosting from other applications, such as Oracle Purchasing, Oracle Payables, or OracleInventory

• Creates a reversing entry for expenditure items when you split an expenditure item,transfer an expenditure item, or change transaction attributes for an expenditure item (forexample, change whether the expenditure item is billable or capitalizable)

The predefined setup for the post-accounting programs consists of the program code and a listof the accounting classes assigned to each respective program. If you modify the accountingclass for a journal line type, or add a new accounting class and journal line type pair, then youmust also update the accounting classes assigned to each of the predefined post-accounting programs. This update ensures that the asset generation program, audit reports, and expenditureitem splits and transfers in Oracle Project Costing continue to work accurately.

Important: Do not add the same accounting class to both the debit and the credit journal linetypes.

Important: Oracle Project Costing predefines post-accounting program assignments for the PA Postaccounting Debit program and the PA Postaccounting Credit program. Do not removethe predefined accounting classes even if you define your own journal lines definitions and addaccounting class assignments to the programs. In this case, Oracle Project Costing uses the predefined accounting classes to process and report on existing historical journals and newuser-defined accounting classes that you add to process and report on new journals.





Cross-Entity Balancing Rules

Cross-Entity Balancing Rules

Oracle Subledger Accounting uses intracompany balancing rules to create balancing lines on journal entries between balancing segment values. You set up this functionality in theAccounting Setup Manager in Oracle General Ledger. The Accounting Setup Managercentralizes the common setup steps for the Oracle financial applications.

For example, if you define accounting rules for project costs that use the operating unit toderive the account for your balancing segment, then transactions can have unbalanced entrieswhen you create transactions between two different operating units. To address this situation,Oracle Project Costing sends the unbalanced entries to Oracle Subledger Accounting andOracle Subledger Accounting automatically creates debit and credit accounting lines to balance

the subledger journal entries by balancing segment. Oracle Subledger Accounting uses the balancing accounts that you define for the ledger in the Accounting Setup Manager.

You must select the Enable Intracompany Balancing option in the ledger definition to enablethe application of the balancing rules. You also must set up the accounts to ensure that OracleSubledger Accounting generates the balancing journal entries. For information about cross-entity balancing rules, including examples, see the Oracle Financials Implementation Guide.





Oracle Subledger Accounting Inquiries

Oracle Subledger Accounting Inquiries

You can query accounting events, journal entries, and journal entry lines based on multipleselection criteria. You can use subledger accounting inquiries to:

• View information about an accounting event or journal entry error.

• View detailed information about the subledger journal entry headers for an accountingevent.

• Compare subledger journal entry information for any two journal entries.

• View subledger journal entry lines for multiple documents or transactions.

• View subledger journal entry in a t-account format.

• View transactions for an accounting event or journal entry.When you view a transaction for a cost accounting event, Oracle Subledger Accounting drillsdown to Oracle Project Costing and automatically opens and queries information inexpenditure inquiry. Similarly, you can drill down to other subledger applications to viewtransaction information for the accounting events that originated in those applications.





Audit Reports

Audit Reports

The Project Subledger Audit Reports print cost distribution lines related to projects. Thereports enable you to drill down from a GL account balance in the trial balance to theindividual project-related transactions.

• AUD: Project Subledger Summary - This report prints a summary of cost distributionlines 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 fora single project by task.

• AUD: Project Subledger Detail by Expenditure Type - This report shows project

subledger detail across projects for one expenditure type.





Summary




Implementing Non-Labor CostingChapter 8 - Page 1

Implementing Non-LaborCosting

Chapter 8





Implementing Non-Labor Costing





Objectives





Agenda







When you charge a usage expenditure item to a project, your must specify the non-laborresource utilized and the non-labor resource organization that owns the resource. When youdefine non-labor resources, you can choose only expenditure types with the Usagesexpenditure type class.





Non-Labor Costing Implementation Steps





Defining Non-Labor Resources

Defining Non-Labor Resources

1. In the Non-Labor Resources window, enter the name, description, effective dates. Selectan expenditure type for each non-labor resource entered.

2. In the Organizations region, select the organizations to which the resource is assigned andenter the effective dates. The organizations include any organization from yourorganization hierarchy, regardless of whether the organization has the Project

Expenditure/Event Organization classification enabled and regardless of the effectivedates for the organization.





Non-Labor Cost Rates

Non-Labor Cost Rates

An expenditure type cost rate is a currency amount that Oracle Project Costing multiplies bythe expenditure type unit to calculate cost. In the Expenditure Types window, select anexpenditure type and choose the Cost Rates button to enter a cost rate for it.

When you define an expenditure type, you specify whether cost rates are required. You canonly select the Cost Rates button for the expenditure type if you enable the Rate Required option. You cannot change this setting after you save the expenditure type. Instead, you mustcreate a new expenditure type with a unique name and set the Rate Required option for it.

In a multi-organization environment, you set up expenditure types once and they are sharedacross all operating units. However, the cost rates for expenditure types are specific to each

operating unit. You must define cost rates for each operating unit.For additional discussion regarding defining expenditure types, see the lesson titled“Implementing Expenditures.”





Non-Labor Cost Rate Overrides

Non-Labor Cost Rate Overrides

You define cost rate overrides in the Non-Labor Resources window. When you define non-labor resources, you assign each non-labor resource an expenditure type. The cost rates youdefine for an operating unit for the expenditure type apply to all non-labor resources with thatexpenditure type.

You can optionally define non-labor cost rate overrides for non-labor resources. You defineeach cost rate override by operating unit for a specific non-labor resource and organizationcombination.

In a multi-organization environment, you set up non-labor resources once and share themacross all operating units, while you define cost rate overrides by operating unit.





Agenda





Listings

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 reviewthe non-labor expenditure cost rates. You can print a listing for one or all expenditurecategories, one or all expenditure types, or for a specified effective date. If an effectivedate is specified for the report, then the report lists only expenditure cost rates that areactive as of the date you enter.

• IMP: Non-Labor Resources by Organization - Use the IMP: Non-Labor Resources byOrganization listing to review all non-labor resources associated with a particularorganization, expenditure category, or expenditure type. For each organization listed, this

report displays the organization’s non-labor resources and the corresponding expendituretypes and expenditure categories.





Quiz

Answer: a, c





Quiz

Answer: b





Summary




Implementing Labor CostingChapter 9 - Page 1

Implementing Labor Costing

Chapter 9





Implementing Labor Costing





Objectives





Agenda





Labor Costing Implementation Steps

Labor Costing Implementation Steps

When you import or enter labor costs into Oracle Project Costing as a quantity of hours, thecost distribution program determines how to calculate the raw cost of the labor. To accomplishthis, within Oracle Project Costing you can maintain labor cost rate schedules by employee or by job or use a labor costing extension to calculate the cost. You also have the option ofoverriding labor cost rates for individual employees. When you run the program PRC:Distribute Labor Costs or the program PRC: Distribute Labor Costs for a Range of Projects,the program uses the cost rates to determine the raw cost for each uncosted labor expenditureitem. You can also define a method for calculating overtime cost.





Define Labor Costing Multipliers

Define Labor Costing Multipliers

A labor costing multiplier is a value by which Oracle Project Costing multiplies an employee’slabor cost rate to calculate the employee’s overtime premium cost rate:

• Labor Cost Rate * Labor Cost Multiplier = Overtime Premium Labor Cost Rate

Oracle Project Costing then multiplies this overtime premium labor cost rate by the number ofovertime hours an employee works to calculate the overtime premium for that employee:

• Overtime Premium Labor Cost Rate * OT Hours = Overtime Premium

You define a labor cost multiplier for each kind of overtime your business uses, such as doubletime, or time and a half. For example, if you pay an employee double time for all overtimehours, then define a labor cost multiplier of 1.0. You multiply the employee’s labor cost rate by1.0 to calculate the employee’s overtime premium labor cost rate. If you pay an employee timeand a half for all overtime hours, then define a labor cost multiplier of 0.5 to calculate theemployee’s overtime premium labor cost rate. An employee’s total labor cost is the overtime premium plus the total number of hours that employee worked multiplied by the employee’slabor cost rate:

• Overtime Premium + (Total Hours x Labor Cost Rate) = Total Labor Cost





Quiz

Answer: a





Labor Costing Rules

Labor Costing Rules

You define a labor costing rule for each pay type your business uses. For example, you candefine a labor costing rule for pay types such as exempt, non-exempt, uncompensated,compensated, or hourly. When an employee charges time to a project, Oracle Project Costing processes the labor hours according to the employee’s labor costing rule.

To define a labor costing rule:

1. Enter a unique rule name and select a costing method.

- Costing methods determine how Oracle Project Costing calculates labor costs:

- Rates: When you select Rates, Oracle Project Costing calculates the labor costsfor entered hours using hourly cost rates.

- Extension: When you select Extension, labor costs are calculated by the laborcosting extension. When you use this option, you are not required to maintain

hourly cost rates in Oracle Project Costing.

2. If the overtime calculation extension creates overtime hours, then you can select theOvertime Trans Defaults button and specify a default project and task by operating unitfor system-generated expenditure items.





3. Enter the Effective Dates during which the labor costing rule is valid.

4. Assign cost multipliers to overtime expenditure types.

- Enter this information if your employees enter overtime hours manually. When youselect a costing method of Rates and a transaction is charged to an expenditure typethat has an assigned multiplier, then the distribution program applies the multiplier asit calculates labor costs.





Quiz

Answer: b, c





Rate Schedules

Rate Schedules

You can define rate schedules for both billing and costing. A cost rate schedule maintainshourly cost rates for employees or jobs. No system attribute exists to distinguish between a billrate schedule and a cost rate schedule.

For labor cost rate schedules, specify one of the following schedule types for each rateschedule you define:

• Employee

- Use this type of rate schedule to define standard hourly rates or percentage markupsfor billing by employee.

• Job

- Use this type of rate schedule to define standard hourly rates by job title. When youenter a job-based rate schedule, you enter a job group to indicate which jobs are usedto determine rates. When a project uses a job-based bill rate schedule, the job groupon the schedule must match the project’s billing job group.

In a multi-organization environment, you can share rate schedules across different operatingunits, or have different rates for the same resource in different operating units.





To define a rate schedule:

1. Specify the operating unit to which your organization and rate schedule belongs. Whenyou have access to only one operating unit, that operating unit appears as a default valuein this field.

2. Specify the organization that maintains the schedule.

- The organization you enter can be any organization from your organization hierarchy,

regardless of whether the organization has the Expenditure Organizationclassification, and regardless of the start and end dates for the organization.

3. In the Rate Schedules window, enter a schedule name and a description of the schedule.

4. Specify a currency for the schedule.

5. Optionally, enable the Share Across Operating Units check box.

- This optional enables other operating units to use this schedule.

6. Select a schedule type.

7. Specify rates or markups for employees or for job titles.





Assign Costing Rules and Rate Schedules

Assign Costing Rules and Rate Schedules

Use the Organization Labor Costing Rules window to:

• Assign costing rules and rate schedules to operating units, parent organizations, andspecific expenditure organizations. The costing rule and rate schedules assigned to anorganization apply to all employees in the organization.

• Specify currency rate attributes to calculate labor costs if the currency of the cost rateschedule is different from the currency of the operating unit in which the timecard isentered.

• Define default overtime projects and tasks for organizations using the overtime calculationextension to generate overtime transactions.

When you assign a costing rule and a rate schedule to an organization, Oracle Project Costingapplies the following rules in the order presented to determine the costing rule for eachtransaction:

• If an assignment exists for the transaction expenditure organization, then thecorresponding costing rule and rate schedule are used to calculate labor costs.

• If an assignment does not exist for the expenditure organization, Oracle Project Costinguses the Expenditure Organization Hierarchy and searches for an assignment for the parent





organization that owns the expenditure organization. If an organization has multiple parents and a rule is assigned to each, then the rule assigned to the lowest level parentorganization is applied.

• If an assignment does not exist for a parent organization, then Oracle Project Costingsearches for an assignment for the expenditure-operating unit.

To assign costing rules and rate schedules:

1. Select an Operating Unit, Organization or both.

- If you do not select an operating unit, then Oracle Project Costing displays allorganizations that are part of any Expenditure/Event Organization Hierarchy.

- If you select an operating unit, then Oracle Project Costing displays only thoseorganizations that are in the Expenditure/Event Organization Hierarchy for theselected operating unit. An organization does not have to be classified as Project

Expenditure/ Event Organization to appear on the list.

2. Select a labor costing rule.

- If the labor costing rule has a costing method of Rates, then select the cost rateschedule that defines the hourly cost rates for employees in the selected organization.

- If you assign an organization labor costing rule to an organization that is notclassified as a Project Expenditure/Event Organization, then the rule applies toorganizations that are below it in the hierarchy, unless you assign a rule to anorganization at a lower level in the hierarchy. For example, a hierarchy has threeorganizations: Organization 1, Organization 11, and Organization 111. Organization 1is the parent of Organization 11. Organization 11 is the parent of Organization 111.Organization 111 is the only Project Expenditure/Event Organization. If you assignorganization labor costing rules only to Organization 1 and Organization 11, then therule that you assign to Organization 11 takes precedence for Organization 111.

3. Enter a default job rate schedule.

- This schedule is used to forecast costs for unstaffed positions.4. Enter the effective dates.

5. Optionally, enter a default project and task for system-generated transactions.

- Enter this information if you use the overtime calculation extension,

6. Enter the currency conversion attributes in the Currency Conversion Attributes region.

- Enter this information if your cost rate schedule currency is different from youroperating unit currency.

- If you do not specify currency attributes, then Oracle Project Costing applies the rateattributes defined in the Implementation Options window.





Labor Costing Overrides

Labor Costing Overrides

For individual employees, you can enter labor costing overrides. You can override the assignedcosting rule, override the assigned cost rate schedule, or enter an overriding cost rate.

To override labor costing:

1. In the Labor Costing Overrides window, find any existing labor costing overrides.

- Select either the Employee Name or Employee Number from the list of values.

- Select the operating unit from the list of values.

- Select the Find button.

2. Optionally, select a labor costing rule.

3. Choose an override type to specify whether to override the assigned rate schedule or enteran overriding cost rate:

- Schedule - Enter the overriding rate schedule in the Cost Rate Schedule field.

- Rate - Enter an overriding rate. Optionally, select a new currency code and definecurrency conversion attributes.

4. Enter effective dates.





Labor Costing Extension

Labor Costing Extension

Use the labor costing extension to implement a unique costing method for labor transactions.The standard method calculates raw cost using the number of hours multiplied by theemployee’s hourly cost rate. The labor costing extension enables you to derive raw costamounts for individual labor transactions. Examples uses of the extension include:

• Standard cost rate by job

• Capped labor cost rates

• Multiple cost rates per employee

You can use the labor costing extension to implement unique costing methods other than thestandard method, which calculates raw cost using the number of hours multiplied by theemployee’s hourly cost rate.

Processing

Oracle Project Costing processes the labor costing extension during labor cost distribution before calculating standard raw cost amounts. If Oracle Project Costing encounters a laborcosting extension that derives the raw cost amount of a labor transaction, then it skips thestandard raw cost calculation section for that transaction.





Labor Transaction Extension

Labor Transaction Extension

The labor transaction extension enables you to create additional transactions for individuallabor items charged to projects:

• Create overtime premium transactions for overtime hours based on company overtime policies.

• Create fringe benefit transactions that are charged to the same project as the source labor.

• Create additional transactions for hazardous work performed for every labor transactioncharged to certain projects.

You can create additional transactions for straight time labor transactions and overtime labortransactions. You create additional labor transactions based on the source labor transactionsthat you enter on timecards.

Related Transactions

Additional transactions created for labor transactions are referred to as related transactions. Allrelated transactions are associated with a source transaction and are attached to the expenditureitem ID of the source transaction. You can identify and process the related transactions byreferring to the expenditure item ID of the source transaction.





You create related transactions to process a raw cost amount separately than the sourcetransaction raw cost amount. Related transactions can be burdened, billed, and accounted forindependently of the source transaction.

Processing

Oracle Project Costing processes the labor transaction extension during labor cost distribution.When you distribute labor costs, the program processes the labor transaction extension after it

calculates the raw cost of the source transactions. This sequence enables you to derive the costof the related transaction from the cost of the source transaction. You also use the labortransaction extension to calculate new cost amounts for related transactions if the sourcetransaction is recosted.





Implement Overtime Processing

Implement Overtime Processing

Complete the following steps to implement an indirect project to collect overtime premiumcosts:

• Implement the Oracle Project Costing Overtime Calculation extension.

• Define overtime expenditure types.

• Define labor cost multipliers.

- For each type of overtime your business uses, define a corresponding labor costmultiplier. You assign the appropriate labor cost multiplier to each overtime task.

• Enter an overtime project.

- You can define one indirect project to hold all of your company’s overtime costs, oryou can define many indirect projects to make it easier to enter and report overtime by group or office.

- If you decide to use more than one indirect project to hold your company’s overtimecosts and you are using automatic overtime calculation, then you must include logicin your Overtime Calculation extension to charge the overtime hours to theappropriate overtime project.





• Define overtime tasks.

- For each overtime project, you must define a task for each type of overtime your business uses. Different types of overtime use different labor cost multipliers tocalculate overtime costs.

- If you are using automatic overtime calculation, then you must include the logic inyour Overtime Calculation extension to charge overtime hours to the appropriate

overtime task.• Define labor costing rules.

- If you charge overtime costs to an indirect project, then you can use Oracle ProjectCosting to record the premium your business pays employees for overtime hours theywork.

• Assign a labor cost multiplier for each overtime task.

• Implement AutoAccounting.

For additional discussion regarding how to implement overtime calculations, see the Oracle Projects Implementation Guide.





Overtime Calculation Extension

Overtime Calculation Extension

You can specify how to use the Overtime Calculation extension in the Implementation Optionswindow.

The overtime calculation extension enables you to define your own rules to implementcompany-specific overtime calculation policies. The extension calculates overtime costs andcharges them to an indirect project other than the project where the labor was charged.

To charge overtime to the project where the labor was charged, consider creating items via thelabor transaction extension.

Oracle Project Costing provides a template Overtime Calculation extension. You can use thetemplate to understand the extension, and then make appropriate changes to meet your business

needs.

If you use both the Labor Transaction Extension and the Overtime Calculation program, thenyou must define conditions so that only one of these options processes each transaction.





Quiz

Answer: a





Agenda





Listings

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, joblevel, job discipline, or labor costing rule. For each employee listed, this report displaysthe employee’s 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 andtheir cost rates, job level, job discipline, or labor costing rule. This report starts at aspecified organization and reports down the organization hierarchy listing employees andtheir 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.





Summary




Implementing Burden CostingChapter 10 - Page 1

Implementing BurdenCosting

Chapter 10





Implementing Burden Costing





Objectives





Agenda





Overview of Burdening

Overview of Burdening

Burdening, also known as cost plus processing, is a method of applying one or more burdencost components to the raw cost amount of each individual transaction to calculate burdencosts. You can choose to account for the individual burden cost components to either track theoverhead absorption or to account for the total burdened costs. You can write custom reportsusing 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 youcan 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 usesto calculate the cost. Oracle Project Costing performs the buildup for each detailed transaction.





Burden Costing Terminology

Burden Costing Terminology

• Burden Cost Code - An implementation-defined classification of overhead costs thatrepresents the type of burden cost to apply to raw cost.

• Burden Costs - Legitimate costs of doing business that support raw costs and cannot bedirectly attributed to work performed.

• Burden Multiplier - A numeric multiplier associated with an organization for burdenschedule revisions, or with burden cost codes for projects or tasks.

• Burden Schedule - An implementation-defined set of burden multipliers that youmaintain to use across projects.

• Burden Structure - Determines how cost bases are grouped and what types of burdencosts are applied to the cost bases. A burden structure defines relationships between cost bases and burden cost codes and between cost bases and expenditure types.

• Burdened Cost - The cost of an expenditure item, including raw cost and burden costs.

• Cost Base - The grouping of raw costs to which burden costs are applied.

• Raw Costs - Costs that are directly attributable to work performed. Examples of raw costsare salaries and travel expenses.





Storing Burden Cost Calculations

Storing Burden Cost Calculations

Storing Burden Cost on the Same Expenditure Item

You can choose to store the total burdened cost as a value along with the raw cost on eachexpenditure item. You can view the total burdened cost and the raw cost of each item. OracleProject Costing displays the raw and burdened costs on windows and reports.

Storing Burden Costs as a Separate Expenditure Item on the Same Project or on a

Separate Project

You can choose to hold the burden cost components as separate expenditure items on the same project. Alternatively, you can show burden cost as summarized expenditures on a separate project that you assign in the Project Types window. The expenditure items storing the burden

cost components have a different expenditure type that is classified by the expenditure typeclass Burden Transaction. Oracle Project Costing summarizes the burden cost components tocreate the burden transactions. The summarization is by project, lowest task, expenditureorganization, expenditure classification, supplier, PA period, and burden cost code. You canalso use the Burden Resource Extension to specify the attributes that Oracle Project Costinguses when it groups summary burden transactions. The link to the original expenditure item ismaintained, but is not visible when you look at the summarized expenditures.





Accounting for Burden Costs

Accounting for Burden Costs

Accounting for Burden Costs by Burden Cost Component

You can account for the individual burden cost components when you want to track the burdening in Oracle Subledger Accounting and Oracle General Ledger. The program PRC:

Create and Distribute Burden Transactions summarizes the burden costs and creates theexpenditure items for the burden transactions. You can create the burden transactions on thesame project as the raw cost transactions or on a separate project.


You may choose to account for the total burdened cost of the items, without distinguishing theamounts by burden cost components. You can use this approach to track the total burdened

cost in a cost asset or cost WIP (work in process) account. This method is also sometimesreferred to as project inventory.

Storing Burden Costs with No Accounting Impact

You can choose to calculate the burden costs for project transactions for management reportingwithout an accounting impact. If you store burden costs as a value on the expenditure item,then you have no extra setup to perform and no accounting programs to run on the burdencosts, as long as you do not enable Total Burdened Accounting for any project types.





If you store burden costs as separate, summarized expenditure items and perform theaccounting in Oracle Project Costing (rather than importing the accounting), then you must setup AutoAccounting to derive the same default GL account for both the debit and the creditaccount. You must generate cost accounting events for the cost distribution lines for theseexpenditure items, create the final accounting in Oracle Subledger Accounting, and transfer thesubledger accounting to Oracle General Ledger.





Project Types and Burdening

Project Types and Burdening

Use the Costing Information tab on the Project Types window to define default settings for burdening and processing for projects:

• Burdened - Indicates whether to burden raw costs charged to projects using this projecttype.

• Schedule - The burden schedule to use as the default cost burden schedule. You enter aschedule only if the project type is burdened. If the project type is burdened, then this fieldis required.

• Allow Schedule Override - Indicates whether you can override the default cost burdenschedule when entering and maintaining projects and tasks. Deselect the check box if you

want to ensure that all projects of a project type use the same schedule. Check the box toallow updates to the cost burden schedule on the projects and tasks. You can enter thisonly if you enabled the Burdened check box.

• Burden Cost on same expenditure item - Select if you want to store the burden amountin the same expenditure item, and then optionally select a project and task to account forthe expenditure item.





• Account for Burden Cost components: Select this option to store the burden amount inthe same expenditure item, and additionally to show the burden cost on separate,summarized expenditures on a separate project. Select a project and (optional) task thataccounts for the expenditure item.

• Burden Cost as separate expenditure item - Select this option to account for burdenamounts as a separate expenditure item.

• Enable Accounting for Total Burdened Costs - Select this option to generate accountingfor the total burdened cost.

- Note: If you store burden costs as a value on the same expenditure item for reporting purposes only, and you do not want to generate accounting for total burdened cost,then do not enable this option.





Quiz

Answer: b





Agenda





Burden Costing Implementation Steps

Burden Costing Implementation Steps

Complete the setup steps listed on the slide to implement burden costing.





Cost Bases and Cost Base Types

Cost Bases and Cost Base Types

Cost bases refer to groups of raw costs that you use for applying burden costs. You assign cost bases to burden structures, and then specify the types of raw costs that are included in the cost base along with the types of burden costs that are applied to the cost base.

Cost base types refer to the use of cost bases. Oracle Project Costing predefines the cost basetypes Burden Cost and Other . You use cost bases with the type Burden Cost in burdencalculations. Oracle Project Costing does not include cost bases with a type other than BurdenCost in burden calculations. You use these cost bases for grouping expenditure types fordifferent purposes, such as for billing extension calculations.





Burden Cost Codes

Burden Cost Codes

Burden cost codes represent the types of costs to allocate to raw costs. You can use burden costcodes for costing, revenue generation, and billing. You can also use burden cost codes to reportand account for on burden cost recovery components in Oracle Project Costing.

Define an expenditure type for burden cost codes that Oracle Project Costing processes asseparate, summarized burden transactions. You must assign the Burden Transaction expenditure type class to the expenditure type.





Burden Structures

Burden Structures

You define the cost buildup using a burden structure. A burden structure determines how yougroup cost bases and establishes the method of applying burden costs to raw costs. Expendituretypes classify raw costs and burden cost codes classify burden costs. The relationship betweenexpenditure types and burden cost codes within each cost base determines what burden costsOracle Project Costing applies to specific raw costs, and the order in which Oracle ProjectCosting applies the burden costs.

Each expenditure type can belong to only one cost base having a type of Burden Cost withineach burden structure. This setup ensures that Oracle Project Costing does not burden anexpenditure 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 equalsthe 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.





- Is assigned the burden cost codes Fringe, Overhead, and General and Administrative(G&A).

• Material

- Includes the expenditure types Supplies and Construction Materials.

- Is assigned the burden cost codes Handling and General and Administrative (G&A).

• Expense

- Includes the expenditure types Travel, Meals, and Airfare.

- Is assigned the burden cost code General and Administrative (G&A).

Copying Burden Structures

When you copy a burden structure, Oracle Project Costing copies the following assignmentsfrom the existing (From) structure to the new (To) structure:

• Cost base assignments

• Burden cost codes

• Expenditure types

To copy an existing burden structure to a new burden structure, first enter header information

for the new burden structure.





Burden Structures

Burden Structures

Create an Additive burden structure to apply each burden cost code assigned to a cost baseusing 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

Burden Structures

Create a Precedence burden structure to specify the order in which each burden cost code in acost base is applied to raw costs. Enter the precedence in which you want to apply each burdencost code to raw costs within the cost base.





Burden Schedule Types and Burden Schedules

Burden Schedule Types and Burden Schedules

Two types of burden schedules exist that you can use in Oracle Project Costing:

• Firm - Use firm schedules if you do not expect your multipliers to change. Generally, youuse firm schedules for costing or commercial billing schedules. Firm schedules can havemultiple versions, but never more than one version for an effective date range.

• Provisional - Because you do not always know burden multipliers at the time that youcalculate total burdened costs, you can use provisional multipliers. Provisional multipliersare generally estimates based on a company’s forecast budget for the year. When youdetermine the actual multipliers that apply to costs, then you replace the provisionalmultipliers with the actual multipliers. Oracle Project Costing processes the adjustments

from provisional to actual changes for costing, revenue, and billing.You define schedule versions for a burden schedule to record the date range within whichmultipliers are effective. You can have an unlimited number of versions for each burdenschedule, but you can have only one active version at a given point in time.

The profile option PA: Default Burden Schedule Type indicates the default burden scheduletype when entering a standard burden schedule using the Burden Schedules window.





Assigning Burden Multipliers

Assigning Burden Multipliers

When you create burden schedules, you assign a multiplier to an organization and burden costcode. The multiplier specifies the amount by which Oracle Project Costing multiplies the rawcost to obtain the burden cost amount. When you cost the expenditure items, Oracle ProjectCosting looks at the expenditure organization on the expenditure item to determine whatmultiplier to use for burden calculation.

Burden Multiplier Hierarchy

Effective multipliers cascade down the Project Burdening Hierarchy, starting with the parentorganization. If Oracle Project Costing finds a level in the hierarchy that does not have amultiplier defined, then it uses the multipliers entered for the parent organization. Therefore, an

organization multiplier schedule hierarchy is really a hierarchy of exceptions. You define themultipliers for an organization only to override the multipliers of its parent organization.

Suggestion for Organizations that Have No Burden

You can set up special procedures for organizations that have no burden. For example, yourcompany can use contractors that do not have a particular type of burden cost (such as fringe)applied to their raw cost. To implement this scenario, first set up a new expenditureorganization for contractors. Then, assign that organization to the burden schedule and use a





multiplier of zero for the burden cost of Fringe to create a zero burden cost amount. Each timethat burden cost for Fringe is calculated for the contractor’s organization, Oracle ProjectCosting multiplies the contractor’s raw cost multiplier by zero, resulting in a burden costamount of zero, which reflects the true representation of the raw cost and burden multipliers.

Adding a New Organization

If you add a new expenditure organization after you have compiled schedule revisions, you

must ensure that the new organization is included in the schedules:• If the organization has its own multipliers, then add multipliers to appropriate schedule

revisions and recompile.

• If the organization uses parent organization multipliers, then run the concurrent program PRC: Add New Organization Burden Compiled Multipliers.





Defining Burden Schedules

Defining Burden Schedules

• In the Burden Schedules window, enter the name and description of the burden scheduleyou are defining.

• Enter the default burden structure for this schedule. You can see the structure of a particular revision when you review revision details. You can change the default structureof the schedule at any time. Oracle Project Costing uses the new default structure for anynew revisions that you create. You can update the default structure to create revisions thatuse a different burden structure for a given burden schedule.

• Choose the burdening hierarchy for this schedule.

- The burden hierarchy you enter for the burden schedule is the default hierarchy for

the latest version. The burden hierarchy information is displayed in the BurdenSchedule Version Details window and can be overridden at this level.

• Choose the Type of schedule, either Firm or Provisional.

Versions

• In the Versions region, define revisions. You can have many different revisions of a particular schedule. For example, you can have a schedule revision for each quarter in





your fiscal year. You also create schedule revisions when you want to use a new burdenstructure, enter new burden multipliers, or apply actual rates to provisional multipliers.

• The start and end dates for revisions in a provisional schedule must match GL periods. Forfirm schedules, Oracle Project Costing provides you with the flexibility to use any date asthe start or end date.

• Whenever you create a new schedule revision, Oracle Project Costing automatically closes

the previous open revision. The end date defaults to the date preceding the start date of thenew revision.

• Enable the Hold check box to hold this schedule revision from compiling.

• Choose the Details button to review the details of a particular revision.

• Choose Actual if you want to apply actual multipliers to provisional revisions.

Multipliers

• In the Multipliers region, enter multipliers for a schedule revision.

• You also use this region to compile burden multipliers.

• Choose the Copy button to copy multipliers from one schedule revision to a new revision.You must create and save the Copy To revision before you can copy multipliers to the newrevision. If you have a responsibility with the Project Burden Schedule Copy functionassigned to it, then you can copy multipliers across schedules and schedule revisions.Otherwise, you can only copy multipliers between revisions that use the same burdenstructure.

• When you modify the multipliers on a burden schedule and recompile, Oracle ProjectCosting identifies the existing expenditure items affected by the changes and marks theitems for retroactive reprocessing. If you want to change the multipliers and only use themfor expenditure items moving forward, then end date the current version of the scheduleand create a new version with the revised multipliers. Oracle Project Costing uses the newversion to calculate burden amounts for expenditure items with expenditure item dates that

fall within the dates for the new burden schedule version.Compiling

• After you have completed entry of all multipliers and saved your work, choose theCompile button to compile new multipliers. When you compile a schedule, Oracle ProjectCosting automatically submits PRC: Compile All Burden Schedule Revisions.

• You can also run PRC: Compile All Burden Schedule Revisions to compile multipleschedules at one time.





Assigning Burden Schedules

Assigning Burden Schedules

You can assign burden schedules to project types, projects, and tasks. When you assignschedules to a project type, the schedules are the default schedules for projects and tasks thatuse the project type. Assigning burden schedules to project types allows you to implementcompany policies. For example, you can implement a policy that requires all projects of a particular project type to maintain the same multipliers for costing purposes. You can changethe default schedule for a project or task. You can use burden schedule overrides to overridedefault schedules at the project and task levels. Burden schedule overrides generally reflectmultipliers that have been negotiated specifically for a particular project or task.

You can change the default burden schedules for a project or task. If you change the burden

schedule for a lowest level task that has items processed, then Oracle Project Costing does notautomatically mark the items for reprocessing. Only new items that you charge to the task usethe new burden schedule. You can mark the items for recalculation in the Expenditure Inquirywindow. Marking the items causes Oracle Project Costing to use the new burden scheduleassigned to the task to reprocess the items.

Once you assign a burden schedule to a project, you can use the View Burdened Costs windowto test your burden structure and burden schedule implementation.





Burden Costing Extension

Burden Costing Extension

Use the Burden Costing client extension to override the burden schedule ID and assign adifferent burden schedule to an expenditure item. Oracle Project Costing calls the BurdenCosting extension during cost distribution processing. You can modify the extension to satisfyyour business rules for assigning burden schedules. For additional information, see the Oracle Projects APIs, Client Extensions, and Open Interfaces Reference.





Reporting Separate Burden Transactions with Source Resources

Reporting Separate Burden Transactions with Source Resources

You can set the PA: Report Separate Burden Transactions with Source Resources profileoption to have Oracle Project Costing assign summary burden transaction expenditure items tothe same resource class as their source raw cost expenditure items. This option enables you toassign both burden costs and their source raw costs to the same resource class for reporting purposes.

For example, for timecards, if you set the profile option to Yes, then Oracle Project Costingassigns both the labor raw cost expenditure items and the related summarized burdentransaction expenditure items to the People resource class. Alternatively, if you set this profileoption to No, then Oracle Project Costing assigns the raw cost expenditure items to the People

resource class and the related summarized burden transaction expenditure items to the Financial Elements resource class. These assignments takes place because labor raw costexpenditure items have an expenditure type class of Straight Time and burden transactionexpenditure items have an expenditure type class of Burden Transaction.

This profile option only affects transactions charged to projects where the Burden Cost asSeparate Expenditure Item option is enabled for the project type.





Burden Resource Extension

If you set this profile option to Yes, then you must modify the Burden Resource Extension tospecify the attributes that Oracle Project Costing uses when it groups summary burdentransactions. For additional information about this extension, see Burden Resource Extension,Oracle Projects APIs, Client Extensions, and Open Interfaces Reference.





Accounting for Cost Adjustments Resulting from Burden ScheduleRevisions

Accounting for Cost Adjustments Resulting from Burden Schedule Revisions

When you modify burden schedules and recompile burden multipliers, Oracle Project Costingidentifies the existing transactions affected by the changes and marks the items forreprocessing. When accounting for the adjusted cost, you can choose to reverse the originalaccounting entries and generate new ones for the adjusted cost, or you can choose to generatenew accounting lines for the difference between the original and new burden cost amounts. Toselect the accounting option that best fits your business needs, enable or disable the profileoption PA: Create Incremental Transactions for Cost Adjustments Resulting from a Burden

Schedule Recompilation. See the following pages for examples of how this profile option

affects adjustment accounting.Adjustments from the Expenditure Inquiry Window

Setting the profile option to Yes does not affect raw and burden cost recalculation adjustmentsthat you make from the Expenditure Inquiry window. Although burden cost recalculation doesnot affect raw cost amounts and accounts, Oracle Project Costing always accounts for burdencost recalculation adjustments from this window with a full reversing and rebookingaccounting entry that includes both the raw cost and burden cost amounts.





Accounting for Cost Adjustments Example 1: Total BurdenedCosts without Incremental Transactions

Accounting for Cost Adjustments Example 1: Total Burdened Costs withoutIncremental Transactions

When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from aBurden Schedule Recompilation profile option to No, Oracle Project Costing reverses theoriginal accounting entries and creates new entries for the adjusted cost amounts. OracleProject Costing reverses the raw accounting lines and generates new adjusted lines even thoughthe raw cost amount does not change.

Accounting Example 1 Assumptions

The following assumptions are made in this accounting example:

• Transaction Raw Cost = $100

• Original Total Burdened Cost = $300

• Adjusted Total Burdened Cost = $400





Accounting for Cost Adjustments Example 1: Total BurdenedCosts without Incremental Transactions





Accounting for Cost Adjustments Example 2: Total BurdenedCosts with Incremental Transactions

Accounting for Cost Adjustments Example 2: Total Burdened Costs withIncremental Transactions

When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from aBurden Schedule Recompilation profile option to Yes, Oracle Project Costing does not reversethe original accounting entries. Instead, Oracle Project Costing creates new accounting entriesfor the difference between the original and new burden cost amounts.



• Transaction Raw Cost = $100• Original Total Burdened Cost = $300






Accounting for Cost Adjustments Example 2: Total BurdenedCosts with Incremental Transactions





Accounting for Cost Adjustments Example 3: Summarized BurdenCost Components without Incremental Transactions

Accounting for Cost Adjustments Example 3: Summarized Burden CostComponents without Incremental Transactions

When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from aBurden Schedule Recompilation profile option to No, Oracle Project Costing reverses theoriginal accounting entries for the raw cost. Oracle Project Costing then creates new raw costentries and burden entries for the difference between the original and new burden costamounts.



• Transaction Raw Cost = $100

• Original Total Burdened Cost = $300






Accounting for Cost Adjustments Example 3: Summarized BurdenCost Components without Incremental Transactions





Accounting for Cost Adjustments Example 4: Summarized BurdenCost Components with Incremental Transactions

Accounting for Cost Adjustments Example 4: Summarized Burden CostComponents with Incremental Transactions

When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from aBurden Schedule Recompilation profile option to Yes, Oracle Project Costing does not reversethe original accounting entries. Instead, Oracle Project Costing creates new burden entries forthe difference between the original and new burden cost amounts.



• Transaction Raw Cost = $100• Original Total Burdened Cost = $300






Accounting for Cost Adjustments Example 4: Summarized BurdenCost Components with Incremental Transactions





Quiz

Answer: b





Quiz

Answer: a





Quiz

Answer: a, b, d





Agenda





Burden Calculation in Costing Programs


The calculation of burden cost includes the following processing logic and calculations:

1. The program selects expenditure items with a raw cost amount for processing.

2. The program determines whether the related project type of the expenditure item isdefined for burdening.

- If Yes (the project type is defined for burdening), then the program determines which burden schedule to use.

- If No (the project type is not defined for burdening), then the program does not burden the item. The program assumes the burden multiplier is zero (burden cost iszero, thus burdened cost equals raw cost).







3. To determine which burden multiplier to use, the program determines if there is a burdenschedule override for the expenditure:

- The program uses the task burden schedule override on the associated task, if suchan override exists.

- If no task burden schedule override exists on the associated task, then the programuses the project burden schedule override on the associated project.

4. If no burden schedule override exists, then the program determines which standard burden schedule to use for burden cost calculations in the following order:

1. Standard task burden schedule

2. Standard project burden schedule







5. After the program determines which schedule to use, it verifies whether the expenditureitem’s expenditure type is found in any of the cost bases of the selected burden schedulerevision.

- If an expenditure type is excluded from all cost bases in the burden structure, thenthe program does not burden the expenditure items that use that expenditure type(burden cost equals zero, thus burdened cost equals raw cost).

- Otherwise, the program uses burden multipliers from the appropriate burdenschedule revision. If a schedule ID override exists, then the program uses thatrevision.

6. The program calculates burden cost and total burdened cost amounts according to thefollowing calculation formulas:

- Burden cost equals raw cost multiplied by a burden multiplier

- Total burdened cost equals the sum of raw cost and burden cost





Concurrent Programs: Total Burdened Cost Accounting

Concurrent Programs: Total Burdened Cost Accounting

1. PRC: Distribute Total Burdened Costs - Creates the total burdened cost distributionlines for all transactions charged to burdened projects, even if the transaction is not burdened, to account for the total project costs in the cost WIP account.

2. PRC: Generate Cost Accounting Events - Generates accounting events for total burdened cost distribution lines. If you select Total Burdened Cost for the ProcessCategory parameter, then the program generates accounting events only for total burdened costs.

3. PRC: Create Accounting - Creates draft or final accounting entries in Oracle SubledgerAccounting for the accounting events. When you run the program in final mode, you can

optionally choose to automatically transfer the final accounting to Oracle General Ledger,initiate the journal import program, and post the journal entries in Oracle General Ledger.If you select Total Burdened Cost for the Process Category parameter, then the programcreates accounting only for total burdened cost accounting events.





Concurrent Programs: Account for Summarized Burden CostComponents

Concurrent Programs: Account for Summarized Burden Cost Components

1. PRC: Create and Distribute Burden Transactions - Summarizes the burden costs,creates the expenditure items for the burden transactions, and runs the distribution program. The burden transactions are created on different projects depending on themethod you use to store burden costs.

2. PRC: Generate Cost Accounting Events - Generates accounting events for burdentransactions. If you select Burden Cost for the Process Category parameter, then the program generates accounting events only for burden costs.

3. PRC: Create Accounting - Creates draft or final accounting entries in Oracle SubledgerAccounting for the accounting events. When you run the program in final mode, you canoptionally choose to automatically transfer the final accounting to Oracle General Ledger,initiate the journal import program, and post the journal entries in Oracle General Ledger.If you select Burden Cost for the Process Category parameter, then the program createsaccounting only for burden cost accounting events.





Maintenance Concurrent Programs

Maintenance Concurrent Programs

• PRC: Add New Organization Compiled Burden Multipliers - Adds burden multipliersto burden schedules for an organization when you add a new organization to yourorganization hierarchy. If you do not add the organization to a specific schedule revision,then this program compiles rates for the organization in all burden schedule revisionsusing the rates of the parent organization as defined in the organization hierarchy. A burden schedule revision must already be compiled for this program to add theorganization rate. Run this program after you create the organization and before youcharge transactions using this organization as the expenditure organization.

Note: Run this program for the parent organization before you run it for the child

organization.• PRC: Compile All Burden Schedule Revisions - Compiles all burden schedule revisions

that are not compiled and are not on hold.





Quiz

Answer: a, c





Summary




Performing Cost AdjustmentsChapter 11 - Page 1

Performing Cost Adjustments

Chapter 11





Performing Cost Adjustments





Objectives





Agenda





Adjusting Expenditure Items

Adjusting Expenditure Items

Oracle Project Costing provides powerful features that allow you to:

• Adjust expenditure items on your projects

• Report the audit trail of the adjustments

See also:

• For discussion regarding Cross Charge related adjustments, see the lesson titled “CrossCharge.”

• For discussion regarding adjustments to supplier costs, see the lesson titled "Integrationwith Oracle Purchasing and Oracle Payables."

• For discussion regarding Capital Project specific adjustments, see the lesson titled “AssetCapitalization.”

• For discussion regarding Contract Project specific adjustments, see the course titled“R12.x Project Billing Fundamentals.”





Adjustments to Imported Transactions

Adjustments to Imported Transactions

The Allow Adjustments option for a transaction source controls what types of adjustments youcan make to expenditure items associated with the transaction source.

Al low Adjustments Option - Enabled

If you enable this option, then you can adjust imported transactions in Oracle Project Costingafter you load them via Transaction Import. Enabling this option enables you to makeadjustments and changes that can result in a new GL account or cost amounts for an item. Forexample, you can make the following types of adjustments:

• Transfer an item to another project or task

• Split an item into two or more items

• Recalculate raw and burden costs (Raw cost values for transactions that were alreadycosted when loaded into Oracle Project Costing are not changed if you mark the item forcost recalculation.)

• Reclassify an item as billable or nonbillable

• Reclassify an item as capitalizable or noncapitalizable

• Change the work type of an item





Note: If you enable this option, Oracle Project Costing allows adjustments even if you disablethe Interface Costs to GL options in the Implementation Options.

Note: If Burden Transaction is the default expenditure type class for a transaction source, thenyou cannot enable the Allow Adjustments option for the transaction source.

Important: If you enable the Allow Adjustments option for a predefined transaction source forsupplier costs, you must complete at least one of the following setup steps:

• Specify the default supplier cost credit account for supplier cost adjustments in theImplementation Options for each operating unit.

• Define a rule in Oracle Subledger Accounting to determine the supplier cost creditaccount.

This setup is required for the program PRC: Create Accounting to successfully createaccounting for supplier cost adjustments.

Al low Adjustments Option - Disabled

If the option is disabled, then you can still perform the following adjustments:

• Apply a billing hold

• Apply a one-time billing hold

• Release billing hold

• Recalculate burden cost - You can recalculate burden costs only if the Import Burdened

Amounts transaction source option is not enabled.

• Recalculate revenue

• Change comment

• Reprocess cross charge

• Mark for no cross charge processing

• Change transfer price currency attributes

• Change the work type (only if the change does not affect the billable status or capitalizable

status of the expenditure item)

- Note: The profile option PA: Transaction Billability derived from Work Type controlswhether the work type determines the billable status of an expenditure item.

If you do not allow users to adjust imported transactions in Oracle Project Costing, then youcan adjust the transactions in the originating external system. After you adjust the transactions,you import adjustments into Oracle Project Costing.





Project Status and Adjustments

Project Status and Adjustments

To adjust the expenditure items for a project, the project status must allow adjustments. Youuse the Status Controls region of the Statuses window to define actions that are allowed orrestricted for each project status. Enable the Adjust Transactions status control to allowadjustments for projects with that status.





Recalculate Burden Cost

Recalculate Burden Cost

You can recalculate the burden cost of an expenditure item if you find that the burdened costamount is incorrect. To produce correct recalculation results, you must correct the source of the problem before redistributing the items.

• When you select Recalculate Burden Cost for a burden transaction, no recalculation of the burden amount takes place.

• You can recalculate the burden cost of an invoice line.

To Recalculate Burden Costs:

• Make the appropriate changes by either selecting another burden cost schedule orchanging the AutoAccounting setup.

• Identify and mark appropriate items for burden cost recalculation.

• Oracle Project Costing reprocesses the items the next time that you run the costing programs.





Recalculate Raw Cost

Recalculate Raw Cost

You can recalculate the raw cost of an expenditure item if you find that the raw cost amount isincorrect. To produce correct recalculation results, you must correct the source of the problem before redistributing the item. For imported expenditure items, you can recalculate raw costonly if the Allow Adjustments transaction source option is enabled on the transaction sourcethat is associated with the expenditure item.

Note: You can recalculate the raw cost of expenditure items imported as costed to generate anew debit account; however, the cost amount does not change.

To Recalculate Raw Costs:

• Make the appropriate changes to the rates or AutoAccounting.

• Identify and mark appropriate items for raw cost recalculation.

• Oracle Project Costing reprocesses the items with new rates and accounting rules the nexttime that you run the costing programs.





Change Work Type

Change Work Type

You can change the work type of an item. You can use this adjustment to reclassify an item forreporting and billing purposes.

Note: To change the work type, you must set the profile option PA: Require Work Type Entryfor Expenditures to Yes.

Note: If you set the profile option PA: Transaction Billability Derived from Work Type to Yes,then changes to the work type can affect whether a transaction is billable and therefore followthe same rules as changes to the billable status for an expenditure item.

For imported expenditure items, you can change the work type if the Allow Adjustmentstransaction source option is enabled on the transaction source that is associated with the

expenditure item. If the Allow Adjustments transaction source option is not enabled, then youcan change the work type only if the change does not affect the billable status or capitalizablestatus of the expenditure item.





Change Comment

Change Comment

You can edit the expenditure comment of an item. You can use this adjustment to make theexpenditure comment clearer if you are including the comment on an invoice backup report.





Split Item

Split Item

You can split an item into two items so that you can process the two resulting split itemsdifferently. The resulting split items are charged to the same project and task as the originalitem. When you split an expenditure item charged to a contract project, you can select whethereach 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 associatedwith the expenditure item.





Transfer 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 cantransfer to projects to which they are assigned. Oracle Project Costing performs a standardvalidation on all transferred items.

• Oracle Project Costing also ensures that you only transfer items which pass the chargecontrols of the project and task to which you are transferring. If the items you aretransferring do not pass the new project and task's charge controls, then you cannottransfer the item.

• For imported expenditure items, you can transfer an item only if the Allow Adjustmentstransaction source option is enabled on the transaction source that is associated with theexpenditure item.





Change Currency Attributes

Change Currency Attributes

You can change the functional or project currency attributes of multi-currency transactions.When you select Change Functional Currency Attributes or Change Project CurrencyAttributes from the Reports menu, Oracle Project Costing displays a window where you canenter changes in the following fields: Rate Type, Rate Date, and Exchange Rate.

• The window displays the project or functional currency, depending on which currency youhave selected, as well as the transaction currency.

• You can also change currency attributes for expenditure items using the MassAdjustments feature.

• If the project currency and the functional currency for an expenditure item are the same,

then you can select only the Functional Currency Attributes option. Oracle Project Costingcopies any changes you make to the functional currency attribute to the project currencyattributes.





Adjustments to Multi-Currency Transactions

Adjustments to Multi-Currency Transactions

When you adjust multi-currency transactions, Oracle Project Costing must determine currencyattributes for the transactions that result. The following rules apply:

• The original expenditure item is reversed, with all the same amounts and currencyattributes as the original item.

• The new expenditure items are created and treated as new transactions, following thestandard default logic for currency attributes.

• For reversals and splits, the reversing and new items have the same currency attributes asthe original transaction.

• For a transfer, the reversing item has the same currency attributes as the originaltransaction. For the new item, the cost distribution program uses the conversion rules for anew transaction, taking the default currency attributes from the destination project.





Adjustments to Supplier Costs

Adjustments to Supplier Costs

You can make adjustments to supplier costs in Oracle Project Costing, Oracle Purchasing, andOracle Payables.

In Oracle Project Costing, you can make the following adjustments to supplier cost andexpense report cost expenditure items:

• Transfer an expenditure item to another project or task

• Split an expenditure item

• Reclassify the billable or capitalizable status

• Place a billing hold or one-time hold

• Release a billing hold• Recalculate burden costs

• Recalculate raw costs

- Note: For supplier costs, Oracle Project Costing does not recalculate the cost amount.It only re-derives the default debit account.

• Recalculate revenue

• Change comment





• Change project functional currency attributes

• Reprocess cross charge transactions

• Mark for no cross charge processing

• Change transfer price currency attributes

In Oracle Purchasing and Oracle Payables, you can adjust the project-related information suchas the invoice amount, supplier, project, task, expenditure type, expenditure organization andexpenditure item date.

Restrictions to Supplier Cost Adjustments

Oracle Project Costing restricts the types of adjustments that you can make to supplier costexpenditure items in Oracle Project Costing. The restrictions apply to supplier costs interfacedto Oracle Project Costing from Oracle Purchasing and Oracle Payables, and to expense reportcosts interfaced from Oracle Payables. For a discussion of these restrictions, see the lessontitled “Integration with Oracle Purchasing and Oracle Payables.”





Mass Adjustments

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 itemsfor a single project across operating units. The expenditure items that you adjust can crossoperating units, but you must have security access to an operating unit to view and adjust thoseexpenditure items. For example, a project has expenditure items associated with operating unitsA, B, C, and D. If your responsibility only gives you access to operating units B and C, thenyou 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 thatoperating is the default value. Oracle Project Costing adjust only the expenditure items thatcorrespond to the current operating unit.

To perform mass adjustment of expenditures:

1. Navigate to the Find Project Expenditure Items or Find Expenditure Items window.





2. Enter your search criteria.

3. Choose Mass Adjust .

4. From the Mass Adjust list, select the adjustment to perform on the selected expenditures.

5. Choose the processing method for the adjustments. You can choose to either processadjustments online or submit a concurrent program to process the adjustments. If youchoose to submit the concurrent program to process the adjustments, then Oracle Project

Costing submits the PRC: Adjust Expenditure Items concurrent program.

6. Review the results. When you process adjustments online, Oracle Project Costing displaysa message when the adjustment program is complete. If you process adjustments using aconcurrent program, you can review the output report when the program is complete.





Correct Approved Expenditure Items

Correct Approved Expenditure Items

When correcting approved expenditure items:

• Reverse the original item and then create a new item using the correct information.

• You can also select the Transfer adjustment action to change the project and taskassignment of an expenditure item.

• For supplier cost expenditure items, you cannot correct the amount, expenditure type, orsupplier in Oracle Project Costing. You must correct these attributes in the sourceapplication: Oracle Payables or Oracle Purchasing. You can use the Review Transactionswindow to update the expenditure item date in Oracle Project Costing only if the date failsvalidation when you run the program PRC: Interface Supplier Costs.

• You must correct expenditure items imported from Oracle Inventory or OracleManufacturing in their respective systems except for the transactions with transactionsource Inventory Misc. You cannot reverse or correct expenditure items from theseapplications in Oracle Project Costing.

To correct an approved expenditure item:

1. Create a new batch for the correction items.





- The Expenditure Ending date must match the week that includes the expenditure itemyou are reversing.

- Optionally check the All Negative Transactions Entered As Unmatched check box ifyou want to enter transactions with negative amounts and do not want Oracle ProjectCosting 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 inthe Quantity field. Precede negative amounts with a minus (–) sign. If the All Negative Transactions Entered as Unmatched check box is not enabled, then OracleProject Costing searches for a matching expenditure item and alerts you if it is unableto 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.





Processing Adjustments

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 theadjustments. For example, if you adjust timecard expenditure items on a project that usestotal burdened accounting, then you run PRC: Distribute Labor Costs and PRC: DistributeTotal Burdened Costs.

2. Generate Accounting Events - Next, run PRC: Generate Cost Accounting Events toderive the default credit accounts as needed and generate accounting events for theadjustments in Oracle Subledger Accounting. You can either run the program separatelyfor 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 theTransfer to General Ledger parameter to Yes to enable the program to automaticallytransfer 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





successfully imported journal entries in Oracle General Ledger. Otherwise, you can run PRC: Transfer Journal Entries to GL to transfer the final subledger journal entries fromOracle Subledger Accounting to Oracle General Ledger. You can either run the programsseparately for each type of cost (select appropriate process category) or once for allunprocessed cost distribution lines (leave the Process Category parameter blank).

Alternatively, you can also choose the Run Request button on the Expenditure Items window or

Project Expenditure Items window to initiate a streamline process. In addition, you can submit project and interface streamline processes from the Submit Request window.





Results of Adjustment Processing

Results of Adjustment Processing

After you run the appropriate programs to recalculate the adjusted expenditure items, you canreview the results of the adjustments. When you process an adjustment, a cost adjustmentresults if one or more of the following attributes is different from the original value:

• Raw cost amount

• Burden cost amount

• Account to which the cost is charged

• Billable/Capitalizable status of the item

Corrections to Pre-Approved Expenditure Items, Transfers, and Splits

When processing a reversing item which resulted from a correction of a pre-approvedexpenditure item, a transfer, or a split, the cost distribution programs use the same cost rate asthe original item to ensure that the cost nets to zero for the original and reversing item. The program charges the reversing item to an account based on the original distribution line. The program processes the new positive item resulting from a transfer just as a new expenditureitem is processed. To process new items for a split the same way that a new expenditure item is processed, you must mark the item for recalculation.





Accounting for Cost Adjustments

When a cost distribution program encounters an item that requires a cost adjustment, the program updates the expenditure item with the new raw and burden cost rates and amounts,and creates new cost distribution lines. The program creates a reversing cost distribution lineand a new cost distribution line. These lines form the audit trail of cost adjustments.

As a result of adjustment processing, the following two different sets of account code

combinations exist:• The original cost account code combination and original cost clearing account code

combination.

• The adjustment cost account code combination and adjustment cost clearing account codecombination.

Oracle Project Costing copies the account code combination IDs (CCIDs) from the originaltransaction to the reversing transaction and assigns the cost adjustment lines to the earliestopen or future GL period. For additional information, see the Oracle Project Costing User

Guide.





Quiz

Answer: a





Quiz

Answer: c





Quiz

Answer: b





Quiz

Answer: a





Agenda





Audit Reporting for Expenditure Adjustments

Audit Reporting for Expenditure Adjustments

Oracle Project Costing provides an audit trail of all adjustments performed on an expenditureitem. The audit trail records the following information about the adjustment:

• The name of the user who performed the adjustment.

• The type of adjustment action performed.

• The date and time that the adjustment was performed.

• The window from which the adjustment action was performed.

Run audit report concurrent programs to produce reports for review:

• AUD: Project Expenditure Adjustment Activity - Use this report to review all

adjustments users made to expenditure items of a particular project. Your accountingdepartment can submit this report regularly to audit the kinds of expenditure adjustments being made for a project. For example, they can use this report to identify any expenditureadjustments that are unauthorized or against company policy.

• AUD: Supplier Cost Audit Report - Use this report to audit transactions between OracleProject Costing, Oracle Purchasing, Oracle Payables, Oracle Subledger Accounting, andOracle General Ledger. This report lists all supplier cost transactions in Oracle Project





Costing for a selected operating unit. When you run the report, you can specify anadjustment type to limit the transactions that you want to include in the report.

• MGT: Transfer Activity - Use this report to review the expenditure item transfers intoand out of a particular project. You can use this report as an audit tool to control projectcosts by identifying incorrect or unauthorized transfers for a project. You can also use thisreport to verify any expenditure item transfers that you perform. For each specified

project, this report shows you the expenditure items transferring into or out of the projectand the transfer history of each of these expenditure items. For each expenditure itemlisted, this report displays the item’s cost amount, its quantity, and either the destination project and task numbers or the originating project and task numbers, depending on theexpenditure item’s transfer direction.



Summary

Project Costing Fundamentals 1 - Instructors Guide

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