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ENTERPRISE EXCELLENCE – CAPITAL

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REVISION DATE:

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PHILIP M. HRONAS

REVIEWED BY:

EVA ELLISON

APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER

TITLE: GLOBAL ONLINE AFE FREQUENTLY ASKED QUESTIONS

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AFE System Frequently Asked Questions

8/1/2013

Listing of Frequently Asked Questions (FAQ’s) related to the AFE system and JDE processing.


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APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 1 of 59

Table of Contents

AFE System Access: ................................................................................................................................. 3

AFE Training: .............................................................................................................................................. 4

Accounting, Charges & Expenses: .......................................................................................................... 5

General Ledger and Enode Accounting Codes: ................................................................................ 5

Fixed Asset Accounting: ........................................................................................................................ 6

Transfer of Assets from/to Non JDE locations ............................................................................... 7

Working Capital ...................................................................................................................................... 8

Encumbered Funds:............................................................................................................................... 9

Abatement: ............................................................................................................................................ 11

AFE Forecasts & Expenditures: ......................................................................................................... 13

Forecasts: .......................................................................................................................................... 13

Detail Line Item and Revenue Expense: ...................................................................................... 15

Expenditures: .................................................................................................................................... 15

AFE Entering and Related Functions: ................................................................................................... 19

Entering: ................................................................................................................................................ 19

Entering Direct Costs: ...................................................................................................................... 21

Routing: .................................................................................................................................................. 23

Notification: ............................................................................................................................................ 26

Status: .................................................................................................................................................... 26

Re-Opening: .......................................................................................................................................... 28

Cancel/Close/Delete: ........................................................................................................................... 30

Parent/Child/Supplemental AFEs: ......................................................................................................... 32

WFT Policy and Scope of AFEs: ........................................................................................................... 35


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APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 2 of 59

JDE CR/OR and Related Process: ........................................................................................................ 37

Item Reclass & Serial Numbers: ........................................................................................................ 45

Connectivity and System Errors:............................................................................................................ 54

General Facts: .......................................................................................................................................... 55

Definitions: ................................................................................................................................................. 57

Resources and Links: .............................................................................................................................. 58

Request Help: ........................................................................................................................................... 59


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APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 3 of 59

AFE System Access:

1. Can you please advise if I need to set up UAR's (User Authority Requests) in order for

individuals to access the new AFE database? A colleague tried to get into it yesterday but

she was able to get so far before she was advised that she did not have the rights to

access the page?

a. All WFT personnel with a Microsoft Outlook Address can access the AFE system.

b. All personnel who originate an AFE have access to the status and can view that AFE.

c. Personnel who have broader Regional GBU or Financial or Operations responsibilities

are provided additional security access and can view all AFEs.

d. Personnel who have been designated (by the Regional Controller) as “Accounting” can

view all AFEs and can access the Expenditure Page to “post” Actual and Forecast

Expenditures.

e. Not everyone has access to AFE details. You can search on all AFEs; however, you can

view the details only if you are:

i. The Originator

ii. AFE Owner

iii. Added as notification

iv. Have view access

v. Listed in the Routing History

2. What approvals are required for the AFE View, Accounting or ARC access in the AFE

System?

a. Users must complete a UAR with approvals.

i. Minimum is direct supervisor for Read-Only access.

ii. Go to the UAR system to request an AFE user profile: http://intranet/uar/

iii. Instructions on submitting a UAR located here: http://515ecm/dn/WFT234183

NOTE on Requested Authority

“Read-Only” users may view AFE details – making no changes.

o Requires a minimum; Direct Supervisor Approval.

“Accounting” users may modify Forecast, Spend and AFE status.

o Approval will come from a Regional Controller or designate.

“Asset Routing Coordinator” (ARC) users may update limited fields of an AFE including status

and have complete control over an AFE’s routing.

o Approval will come from a Regional Asset Manager or designate.

http://intranet/uar/

http://515ecm/dn/WFT234183


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APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


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AFE Training:

1. Is it mandatory that I go through training prior to using the AFE system?

a. It is not mandatory to receive training.

b. Published procedures on proper AFE management are available at the following

link/SharePoint Portal: Click Here.

c. UPK’s covering AFE system functionality via module learning are available at the

following link/SharePoint Portal: http://515upkweb/AFE_Management

d. Other Help documents are available at the Asset Management SharePoint Portal as well

as in the AFE and Capital Management Tool system.

2. How do I find the WFT Policy information?

a. Here are three useful references for AFE Application Users that can be found from the

WFT Intranet home page:

i. Frequently Asked Questions (FAQ) use quick search “Global Online AFE FAQ”.

ii. WFT GOA –Grant of Authority use quick search “WFT ops”.

iii. WFT Fixed Asset Policy use quick search “fixed assets policy”.

http://theportal/wms/am/SitePages/SYS-AFE.aspx

http://515upkweb/AFE_Management



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APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


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Accounting, Charges & Expenses:

1. Can you edit/change from expense to capital? That is when should we choose expense

and when should we choose capital?

a. Thus a Capital Requisition should not be used to purchase expense item (unless they are

part of capital AFE purchase). An OR should be used instead, with an expense account,

(not a capital account) and the Cost Object Type 1 field should be left blank.

2. Would it be possible to get an actual breakdown of charges that are applied to an AFE? I

would need dollar amount, PO number if possible, and vendor name and or description of

work performed.

a. Yes. Check the CapEx Stabilization Summary menu – the information is summarized

along with links to the detail data...

b. In some cases, the accountant may be able to assist depending on record keeping

practice. Refer to accountant where applicable.

3. Is it ok for the HelpDesk to update the region per a request? This AFE had the correct

enode but wrong region/country.

a. Not without approval from Sr. management. I suggest that the requestor seek the

approval from Sr. Mgt. as I don’t think we fully understand the possible implications of

making these changes.

General Ledger and Enode Accounting Codes:

1. Is there a list with the G/L accounting codes we can use or can we use our local

accounting locations/codes?

a. These are the Balance Sheet accounting codes (JDE, SAP, Other) that will be

recognized by your local purchasing and FA group. This is now a “free form” field.

b. Perhaps in the future it will be tied to a specific system(s) accounting code. (In the case

of IT related PC Expense AFEs this will be an expense accounting code.

2. I tried to enter my Enode in the field, but it was rejected as invalid, why?

a. The IT support group has advised that where the Enode validation table is only updated

once a month and cannot be updated more frequently than that.

b. So as not to delay the AFE issuance, the workaround for this situation is to enter a valid

enode from your area, and have the Regional ARC update this field later.

i. You might recall awhile back it was revealed in an email thread that the table

where the Enodes reside that the AFE Application validates against is only

updated once a month and cannot be updated more frequently than that.

3. I used to schedule the job that runs this update sequence but recently the responsibility of

scheduling that job has been handed over to Kenny Vernon’s group. What Enode should I

enter into the AFE header record?


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APPROVED BY:

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Page 6 of 59

a. As there are many Enodes in the Hyperion Accounting System, the Enode that should be

used is that of the Balance Sheet where the Asset will ultimately be recorded. (For

expense related IT AFEs this can be the Enode cost center.)

4. It is okay to have different enodes in HFM than AFE system as long as they are in the same

region and you can reconcile (just will need to add this to the reconciliation sent each

month). This was the case for many AFEs in 2012 as well due to the rigs.

a. However, going forward if you are able to do as you mentioned create a new AFE and

close AFE/abate spend/move the forecast from the original AFE that will help the

reconciliation process and make it easier to figure out what needs to be done to balance

the two.

b. Additionally, in the future for Rigs you can create a Global AFE using Global region and

Global AFE as the country. That way child AFEs can be created using the correct

enode/region/country.

Fixed Asset Accounting:

1. I need your guidance about Inter Company Transfer. When we transfer any asset to

intercompany outside region we charge $500 if the NBV is Zero or 10% of cost, where

should we report this gain in PPE Roll forward?

This is our understanding (Example):

The sending company is writing off a zero NBV asset (i.e. fully depreciated) by reducing Cost and A/D in equal amounts and charging 500 for the asset.

The receiving company is adding a 500 asset to PPE_ INTERTRANS.

The I/C PAYABLES and I/C RECEIVABLES offset at 500.

You do not specifically record the gain anywhere in the PPE Roll forward, but it is in your P&L as I/C Gain.

The amount of the gain will also be seen at Consolidation as the PPE_INTERTRANS will carry an excessive Debit balance of 500.

2. Who is the party to raise an AFE on cross border procurement of new assets?

a. The principle for most GBUs*** is that the WFT Unit that is requesting the asset raises

the AFE.

b. If a WFT procurement unit in another country happens to buy it for them, the asset is

recorded and capital expenditures (CAPEX) reported on the AFE record by the

requesting Unit.

c. Of course, there will be an intercompany charge from the procurement unit, but again the

AFE is raised by the requesting Unit. Except for the intercompany charge this is no

different than a cross border purchase order raised directly by the requesting unit to a

third party supplier.


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APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 7 of 59

***There is an exception for certain major “Global” AFEs that are raised for Wireline and Directional

Drilling Services. These AFEs are raised by the Global Management team, CAPEX expenditures are

recorded by the team, and assets are “transferred” by the Global group to the requesting User Unit. We

exported to another Region some equipment that we had been in our Fixed Asset Register recently. But

when we export them we had to charge some mark-up to our Net Book Value that is mandatory as per

local export laws. Consequently we registered the transfer out for the Net Book Value Amount and the

receiving Region registered it for the Invoice Amount (=NBV+Markup).

3. How should the Markup be registered by the receiving Region?

a. In JDE, the markup portion can be treated as a separate child asset on the book of the

receiving company. The markup is eliminated in consolidation i.e. I/C profit of sender, and

the markup asset value on receiving company.

b. As the asset is depreciated this elimination will eventually go away.

c. On the local receiving company book this markup is a valid amount paid, and should be

recorded.

4. How does the Accounting Upload Program work?

a. That standalone program uploads spend and forecast directly to the database without

going through the front-end system.

b. If spend values are uploaded using this program, then it may take up to 15 minutes for

the system to see the spend change and auto-adjust the forecast.

c. There could definitely be timing issues if someone uploads spend and then uploads a

new forecast without waiting 15 minutes – it may inadvertently reduce the forecast that

was just uploaded.

d. The program needs to be updated to (in progress as of 3/22/13):

i. Give the user the option of auto-adjustment just like the web-based screen

ii. Recalculate the forecast immediately if auto-adjust is true.

iii. Change to be a click-once web based program that self-updates rather than a

standalone program that has to be installed and can’t be updated.

Transfer of Assets from/to Non JDE locations

1. Colombia is transferring NP used equipment from Brazil - OR --> OF - No AFE. For

traceability purposes of the FA in transit they would like to use a CIP object account (CIP

127300) in an OR to OF. At this point the Detail line requires an AFE - then we have an

Error. Is there any chance to have any specific setting to have OR (to OP or OF) working

with CIP account? Or should be selected another kind of object account different from

12x.xxx for used machinery and equipment?

a. This scenario can best be described as Columbia "buying" an item that they want to

capitalize. It assumes that the item will be properly disposed of, off the Brazil books (a


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APPROVED BY:

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APPROVED BY:

TOM REDLINGER


Page 8 of 59

capital spends decrease equal to the NBV), and a new asset created on the books of

Columbia (a capital spends increase equal to the NBV plus taxes, duties,

transportation…….).

b. For PP&E:

i. The solution is to use an OF document, with an NP line, but the object code

should be 119900. This Object Code will not require the input of a valid AFE.

ii. Additionally, once the fixed asset has been set up manually, accounting must be

diligent in moving the receipt amount by a JE, very timely, after the PPE is

received, from this account, to the asset. This account should never have a

positive value more than a few days.

c. For RN/RP assets:

i. The AFE field is locked on the OF doc type therefore the user cannot enter an

AFE # directly into the AFE field.

ii. For rental or transfer of existing rental assets from a non-JDE location using an

OF, the user could enter OF’s with RN, RP’s and they will not update the AFE

tables.

iii. No account code is required for RN or RP lines as the automatic according

instructions will take care of that.

iv. If starting with an OR, no AFE # is required.

d. Our instruction need to be clear that when importing an existing asset of any type from a

branch not on JDE, then they must not put an AFE # in the AFE# field.

i. In this case, AFE # is only required on Capital Requisitions (CR’s).

e. Note that this process is only for special circumstances, and not to become common

knowledge or common practice for any other type of transaction, other than when items

being transferred are already capital equipment.

Working Capital

1. How is Working Capital defined in the AFE system?

a. In the AFE world, Working Capital represents part of “operating” capital available to a

business (GBU). AFEs are generated for a portion of the Working Capital as budgeted for

the business and can be designated (according to the Fixed Asset Policy) as a Capital

AFE, an Expense AFE, or split between Capital or Expense as necessitated by the

project proposal.

2. Can you help me with we need to do to complete Previous Working Capital under Header

Information?

a. The Previous Working Capital (PWC) Section is ONLY used in special circumstances.

Most of the time you can just ignore it. We normally just look at the New Capital Assets


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Page 9 of 59

and the New Working Capital (NWC). The NWC is always part of the Detail Page 2 of the

AFE.

b. (In a rare case, an isolated project with say, 5 units working may already be in place, and

we want to add say, 2 more units. The existing project will already have PWC to support

the Accounts Receivable and inventory, etc. The PWC is to enable the calculation of the

additional WC by subtracting the PWC from the NWC.)

3. How is Working Capital (WC) calculated in the AFE Application?

a. The major accounting components of WC are calculated based on the revenue estimate

and the DSO for the Unit for Accounts Payable, and the DPO Days Payables outstanding

for the unit based on the direct cost estimates. The WC represents additional cash

needed for the project and is used as a component of the financial measurement

calculations. Page one of the summary AFE shows the Working Capital along with the

tangible asset Capital requirements.

4. My Region has Value Added Tax system, i.e. you have to pay VAT on top of the principal;

this tax is further recoverable for you, so is ultimately not a cost but primarily a cash flow

issue: - is it correct to not record VAT in the AFE?

a. The VAT is not part of the Capital, but as you note, does impact the cash flow and

financial measurement performance.

b. It is better to treat the VAT as an additional Working Capital Inventory Item, and show the

recovery from customers as a reduction in the Working Capital during the respective

period.

c. This can be done in the Working Capital section by using the existing Inventory row, or

using the Add Row button and adding a separate VAT row. A VAT of 30 to be paid in the

first year and collected over 5 years might look like +30 -10 -15 -5 - 2 -3.

Encumbered Funds:

1. What are the fields Encumbered Funds on Purchase Orders and Encumbered Funds for

Reclassification and how are they different?

a. “Encumbered Funds on Purchase Orders” is all funds encumbered by purchase order to

external vendors, an OP, and transfer orders that create demand on mfg. centers (OT,

O2, OF). The encumbered funds are not distinguishable by order type in the AFE

system.


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REVISION DATE:

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REVIEWED BY:

EVA ELLISON

APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 10 of 59

b. “Encumbered Funds for Reclassification” is the amount of funds that is still encumbered,

but that is now in a received state (as opposed to just being on a PO) and thus is ready

for IF reclass (stock items on a transfer order marked for reclass later). This amount is

removed from the above amount when received on a transfer order. This allows tracking

of stock items that are ready to reclass i.e. on the shelf.

c. The two fields together represent the total amount of encumbered funds

2. In AFE#- - - - - - - $16.82M is appearing in Encumbered Fund on Purchase Orders. Is it

possible to find out order details against which this amount is coming? In the month of

January 2013 actual spent against AFE#- - - - - - - is $10M. When I try to update the manual

spend, the message appears that “Max spend ($115,335.5800) exceeded by $17,178.8655”.

Due to this I am not able to update the spend and causing a big variance between HFM &

AFE Application. How can I update the spend for the month of January 2013?

a. Generally speaking: “Encumbered Funds on Purchase Orders” are all funds encumbered

by purchase order to external vendors, an OP, and transfer orders that create demand on

mfg. centers (OT, O2, OF). The encumbered funds are not distinguishable by order type

in the AFE system. Since this AFE is over 6 months since creation (17-June-2009), a

new AFE should be created for new spend, as we have a new organizational structure,

and focus.

3. Can we get some help learning how to drill down into the encumbered funds amounts?

a. Yes. Check the CapEx Stabilization Summary menu – the information is summarized

along with links to the detail data...

4. Is the Encumbered Amount a cumulative figure or a Monthly / Quarterly figure?

a. Encumbered Amount is Cumulative.

5. Since forecast amounts will be automatically reduced with JDE spend, will encumbered

amounts be reduced also in order to ensure that JDE Spend Encumbered Amount +

Manual Spend < AFE Capital Total?

a. Yes, but there is an issue with users not using the IF Re-Class function correctly,

resulting in Encumbered For Reclass not being relieved correctly. We are making a

change to the system in the near future which will relieve this bucket automatically, but

for now, it can be out of balance.


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EVA ELLISON

APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 11 of 59

Abatement:

1. What is Abatement?

a. For the AFE System (Closed or Open AFE’s) Abatement takes any un-forecasted or

unspent capital and eliminates it for further spend.

b. Abatement reduces or eliminates available spend on Open AFE’s. For Open AFE’s the

Abatement amount can be reinstated.

c. Abatement also prevents further spend on Closed AFE’s; including adding additional

demand documents or manual spend.

Note: Encumberments will continue to occur as demand documents are created against available spend.

2. How does Abatement affect me as a Capital Owner?

a. Capital owners have the responsibility and power to decide what capital should be abated. Only AFE System Admins have the functionality to implement “Abatement”.

i. If any amount is entered in “Abatement”, then the amount cannot be used, and the forecast is adjusted accordingly.

ii. JDE will recognize that Capital Spend has been abated, and limit additional spend accordingly.

iii. The difference with marking an AFE “Complete” is that users can still add spend for a limited time, then remaining spend will be abated.

b. You cannot abate more than is remaining, so the system checks to ensure the entered “Abatement” amount does not exceed what’s remaining (approved capital – JDE Spend, JDE Encumbered, Manual Spend).

i. Variance calculations were also updated to account for “Abatement” so that the GBU is not penalized for discarding spend.

c. No manual spend will be allowed on Completed AFEs where remaining funds have been abated, without first creating a routing to seek GBU approval of the manual spend, and having abated amounts released for the specific manual spend intended.

d. Abating Capital Spend or reinstating abated funds on an AFE is at the discretion of the GBU management, and will be implemented by the AFE Admin group.

3. When shall we abate for an open AFE ?

a. That is at the discretion of the Capital owner. They have the responsibility and power to

decide what and when capital should be abated.

4. I know the reinstate is through the routing system, how about the abate, just by e-mail?

a. You will use the same routing request to re-open an AFE, but will provide additional

information in the notes to request the Abatement and Amount.

b. Please access the AFE Routing System from the following link:

http://515ecm/dn/WFT230992 to submit a routing to get an abatement amount reinstated.

5. Are the Capital owners referring to the AFE owners?

a. This is referring to the Budget Holder whether that is the Product Line VP, GM, Global PL

Manager, etc. Since the AFE “Owner” field is a required selectable field, I would think that

there would be times when one of these individuals could be the AFE owner.



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APPROVED BY:

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APPROVED BY:

TOM REDLINGER


Page 12 of 59

6. If JDE will recognize that Capital Spend has been abated and limit additional spend

accordingly, is it done at PO receiving level?

a. No Abatement is done only within the AFE system, by request, and only by AFE Admins.

b. It will affect the funds available at the PO creation stage, and IF reclass stage, not the PO

receiving stage.

7. Could ORs still be issued?

a. Yes, but not for capital spend. A CR must still be used for capital spend.

8. Is the abatement showing only in the Total box under Spend & Forecast tab?

a. As far as I know, yes it is showing only in the Totals box under Spend & Forecast.


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APPROVED BY:

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AFE Forecasts & Expenditures:

Forecasts:

1. Who Can Edit Forecasts?

a. On individual AFEs:

i. Originators

ii. Owners

iii. Approvers (Auto-Added only, appear with asterisk* on routing page)

iv. Forecast Responsibility- Delegate

b. For GBUs & Regions:

i. AFE Accounting-level users

2. When may AFE forecasts be changed?

a. At any time. Note that the act of adding manual spending (accounting-level users) will

reduce the earliest listed forecast by an equal amount.

b. NOTE: If Skip Economic Justification reflects “Yes”, then Forecasting will not be enabled.

3. How often should AFE forecasts be changed?

a. At a minimum – Quarterly. But this is a business decision and not application related.

b. This ensures that changes to the timing of capital projects are reflected in our projected

capital spending rate.

4. The Spend & Forecast menu item is not visible for me. Why can’t I see it?

a. The AFE in question is in “Under Review” status.

b. We now create forecast on submission of the AFE.

5. Who will be responsible for Forecasting -- calculating the % and entering this data?

a. Each unit/region/co has individuals designated as Accounting. They are the only ones

with access.

b. They can enter the Manual Spend and Forecast data.

i. They will estimate the timing based on the equipment required date.

c. For major expenditures they would get advice from purchasing and the GBU PL manager

responsible for the AFE.

6. Please advise how the Auto-Adjust Forecast on the AFE System works. (Example and

table below)

a. We have an AFE with a Capital Amount.

b. Someone creates a CR and issues a PO.

c. The PO amount goes into Encumbered Funds and the forecast (current quarter) is

reduced by the amount of the PO.

d. Once the PO is receipted, the amount goes out of encumbered funds and is deducted

from the Capital Amount as spend.


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7. Information on the Auto-Adjust functionality in the AFE System:

a. Encumbered Funds of any kind do not adjust forecast, the amounts have to actually

make it to the JDE Spend category before JDE data affects the forecast. There is no

need to try to make the system auto-adjust forecast. It happens as soon as spend is

entered and is reflected immediately on the screen after save is clicked on the individual

AFE screen as well as the Batch edit screen.

8. How are Forecasts affected by spend in the AFE System?

a. Whenever spend increases, forecast decreases (starting at the oldest quarter, not the

current quarter).

b. The system does not roll forecast forward in any way – it stays exactly where it is and is

just subtracted from.

c. With a perfect AFE the forecast doesn’t need to be manually changed. However, they

can have a variety of reasons for wanting to change forecast or move it forward to

another quarter, which is why the Yes/no question exists on the bottom of the batch edit

screen.

d. Also note that if an AFE runs out of forecast then it will obviously have nothing to subtract

from.

9. Forecast Responsibility Delegate: (Message)

a. The person filling this position will have the edit button on the Forecast line of the AFE

available.

b. This field will not be mandatory, and will be editable until Completed, by the originator,

owner, accounting role users, or any approver.

c. Users can reference WFT218181: AFE Procedures – AFE Forecast Update for

Requirements, Responsibility, and Accountability.

d. NOTE: AFE Admins will not be responsible for maintaining forecasts or designating

individuals for Forecast Responsibility.

10. My AFE has been cancelled but still has a Forecast. What do I do?

a. The forecast should be cleared.

b. AFE Admins can clear the forecast for a select few AFE from the Spend & Forecast

menu.

Forecast Q1 Q2 Q3 Q4 Total AFE Capital

Initial Forecast 50 50 50 50 200.00

CR to PO (Purchase or Reclass) 20 15 10 40 85.00 200.00 Encumbered Funds 20 15 10 40 85.00 200.00

New Forecast 30 35 40 10 115.00 200.00

PO Receipt (to Spend) 20 15 10 40 85.00 115.00

New Forecast 30 35 40 10 115.00

http://515ecm/stellent/groups/qhse/@oeps/documents/document/wft218181.pdf


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Detail Line Item and Revenue Expense:

1. Does Regional Allocation SG&A have to be included in other expenses? If so, there is no

room for them.

a. Yes, when applicable, there are DC rows and SGA rows that are added by the user

through the buttons in the detail form.

2. When entering Detail Line Items can I use units (whole $) or thousands ($000) of dollars?

a. On the Add Detail Line Items section, it is possible to enter in either whole dollars or

thousands.

i. Thousands is preferred. THIS IS ONLY FOR THE ADD DETAIL ITEM SECTION.

All the rest of the AFE is in thousands of dollars.

b. When a person adds a new line item, the Unit Cost Entered In radio buttons should be

selected. After entering the Unit Cost, they are prompted to select one of the options as a

required field.

c. As an this example if I am entering an item with a cost of $48 dollars, I would select USD

Whole Number. A pickup truck that cost $27,000 could be entered as 27000 with whole

dollars selected, or 27 with thousands of dollars selected.

d. Within the application, all values are stored in USD Thousands in the Database. To

prevent errors, a warning/ user confirm message will appear when an amount that is

calculated at over 1 million is recognized by the application.

3. I need to update the Year Cash Required on the “Details” page of an AFE. How do I do

that?

a. The AFE has to be in “Returned” status for that to happen.

b. Return the AFE to the originator who can then facilitate the updates.

Expenditures:

1. There are two types of spend:

a. System spend comes from JD Edwards based on activities in JD Edwards. It was

implemented on February 5th 2013. It cannot be modified. So when a PO (or other

Activity) is issued in JDE against a CR/AFE (after 2/5/13) it is updated in the

corresponding AFE

i. Prior to February 5th, PO spend will need to be entered manually.

b. Manual spend is manually entered (directly in the AFE) spend that occurs elsewhere but

for a specific AFE.

i. The person responsible to apply the Manual Spend to the AFE is a designated

person(s), nominated by the Regional Controller.

1. These are usually the Fixed Asset accountants and/or the persons who

report the Hyperion Capex.


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ii. These individuals are identified with Accounting access in the User authority

tables of the AFE System.

iii. Manual spend can also be entered by AFE Admins and Asset Routing

Coordinators (ARC).

2. Note that if an AFE is closed, it does not have to be re-opened to add manual spend. POs

that were already in the system and are now being received will be added to the JDE

Spend bucket of AFE automatically.

3. What currency format should be used for AFE Spend?

a. All spend in the AFE system should be USD (at the conversion rate at time of spend).

b. Manual spend should be corrected (as well as any other AFE) where you know the spend

was entered in another currency.

4. What about items requiring progress payments? We do this often for R&D purchasing & it

wreaks havoc on quarter of year required for cash.

a. If progress payments are booked to CIP, then that CIP is treated as an expenditure

against the AFE, in the expenditure portion.

b. In the Financial Reporting Hyperion system the CIP amounts are treated a Cash Adds

CAPEX in the period of expenditure. The AFE record for expenditures should be

consistent with the Financial reported amounts.

5. Who is the responsible person to apply the capital expenditure to the AFE?

a. A designated person(s) are nominated by the Regional Controller. These are usually the

Fixed Asset accountants and/or the persons who report the Hyperion Capex.

b. These individuals are identified with Accounting access in the User authority tables.

6. Other Users have access to the summary Forecast data through the Search (Financial)

Function and other developed reports. What will happen if they spend the funds before the

AFE gets approved (“After the Fact” AFEs)?

a. The Controller’s function will definitely see this as the “late“ AFE is entered. They will take

the corrective action. This is the same as we do today.

b. In addition in the JDE Application, Procurement function for Capital (i.e. the CR

Transaction) requires the entry of the supporting AFE number.

c. This is validated for AFE number and Approved status.

7. If actual expenditures will exceed 10% (or $100k) of the approved amount will a notification

be sent? Should we allow more spending against the AFE?

a. This functionality does not currently exist in the system. There is a secured option for

expenditure data in the search report, which includes the variance and % from approved

amount available to show the overrun.

b. When an AFE will exceed the lower of 10% or 100k a supplemental AFE should be

created. This supplement is for the additional amount. However, the approval routing

level will be based on the new total amount.


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8. Example – 1 x widget purchased costing $10K, but the spend was actually $12K.10%

tolerance would be $1K but the actual spend is $2K so as there is only a quantity of 1,

what AFE would be used for the reclass – main AFE or supplemental?

Approved amount $10.00

Spend to date $12.00

Balance -$2.00

Tolerance $1.00

a. When an AFE will exceed the lower of 10% or 100k a supplemental AFE should be

created. This supplement is for the additional amount. However, the approval routing

level will be based on the new total amount.

9. Do I have to report CAPEX for asset transfers?

a. No. An ASSET TRANSFER occurs when a WFT Unit that has a Capital Asset that has

previously been reported, transfers that asset to another unit.

b. The objective is that CASH_ADDS (i.e. new Capital) be reported only once within WFT.

In this case the period to period increase in PPE on the balance sheet is shown with the

Asset Transfer amount (Not as a CASH ADDS Capex amount).

10. Why can’t I enter expenses in an AFE I created?

a. This is related to ability to enter Manual Spend. As such, this ability requires AFE

Accounting or ARC authority which can be requested via the Routing System.

b. This routing is to seek approval for elevated permissions within the AFE system. Any

elevated authority must receive the approval of your immediate supervisor and the

Regional Controller.

11. Where can I see the Spend and Encumbered Funds under an AFE?

a. From a couple of places:

i. Within the AFE System, you can click on the Spend & Forecast menu item - or –

CapEx Stabilization Summary menu item (scroll down a bit on this one).

ii. Or running a search/report in the Capital Management Tool:

a. The columns for Encumbered can be un-hidden.

b. Clicking the “View” function under the AFE column heading will take the

user to the AFE system where the Spend & Forecast menu item - or –

CapEx Stabilization Summary menu item can be employed.

c. Clicking the “Linked” AFE number in the report will direct the user to the

CapEx Stabilization Summary page.

12. Who can enter Manual Spend?

a. Admins and those in the Accounting role.

13. When can Manual Spend be changed?

a. After the AFE has been approved, or closed.

14. Why is Manual Spend entered vs. System Spend?


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a. System spend comes from JD Edwards based on activities in JD Edwards. It cannot be

modified.

i. System spend is new and the functionality was just added in 2013.

b. Manual spend is spend that occurs elsewhere which may include SAP. It must match

what is in HFM.

15. We currently have an AFE which will be overspent very soon and I was told that we can

apply the additional spend to other AFE’s if approved? If yes, does this apply to Last

Year’s approved AFE’s?

a. The answer is “No” (usually).

b. Generally, AFEs are created and approved for a specific reason to obtain capital assets,

like a project, a contract, or a business opportunity, and all POs charged to an AFE

should be justifiable as spend to that AFE. The exception may be if an AFE is more

general in nature, like forecast of annual asset replacement.

c. If an AFE is near being spent, but there is still purchases needed to complete the original

intent of the AFE, then a Supplemental AFE should be created for the additional spend

(the PO total, not just what is lacking). Supplemental AFE must receive the same level of

approval as the total of both the original AFE and the Supplemental, as in reality, that is

the spend that is being sought.

16. W/ the new automation of the AFE system/JDE should accruals be keyed in the AFE

system or should this be a difference between HFM and the AFE tracking system until the

PO is received in JDE? Since the funds r encumbered now when the POs are keyed in

would reflect the accrual and not allow for that additional spend. Before if they did not key

in the accrual in the AFE system when the spend was not encumbered would look like

have more funds then available?

a. Accrued funds should not be entered into the AFE system, for the reason you put forward

(for JDE transactions). I guess it is still a good practice for non-JDE activity.

b. However, if we are talking about payment up front, then shouldn’t this amount have been

charged to a CIP account, and then zeroed when the asset is received?

c. I think I have seen field doing the same thing for staged prepayments also. We think a

prepayment is capital spend, and should be booked to the AFE when made.

d. Our idea of the best way to do this going forward, is each prepayment and the final

payment should be a separate line on the PO, and when received, JDE will capture that

prepayment (to a CIP account), and on the final payment, the CIP account is moved to

the asset.


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AFE Entering and Related Functions:

Entering:

1. If the originator made an error when entering information, can I correct it?

a. The ability exists when first creating an AFE to “Forward Draft Only” before the Approval

Routing is started. This allows the Originator to let others review and make changes in

Draft mode before the Approval Routing begins.

b. Once the Approval Routing begins, the AFE is locked from most changes.

i. Certain of the fields can be edited by the ARC-Asset Routing Coordinators that

are assigned for each Region.

ii. In addition attachments can be done until Final Approval.

2. Can the reviewers change anything on the AFE?

a. Once an AFE has been sent for (i.e. leaves Draft Status) approval, only limited fields may

be changed. These can be changed by the Regional ARC-AFE Routing Coordinator. For

other changes, the AFE must be “returned” to the Originator for change.

b. However an AFE can remain in draft status by having the originator “forward draft only” to

the next person. For example, when an originator and his manager are in different

locations, but want to work on the AFE before it is released or approval.

3. If any of the fields have been entered incorrectly, is it possible for any of the signatories to

make the change or does it always have to be sent back to the originator?

a. Changes can be made to limited fields of data once the AFE is in Routing.

b. The Edit function will record the person who made any changes and a related comment.

In addition, minor changes can be communicated through the comments field or

additional attachments.

c. For other changes the AFE will be returned to the Originator who will make the changes

then have to restart the approval process.

4. Can other WFT personnel add any Notes to the AFE?

a. Yes, there is a Note feature on the Routing page which enables personnel who are not

on the routing to add notes and comments. This will enable Notified Personnel or other

interested personnel with access to add their comments which can be seen by the routing

approvers.

5. Will a BP be required again for all AFE’s? We had this changed recently because of all the

AFE’s that the Global guys were doing that didn’t really belong to a BP. Instead it was

“either/or” between the BP and the BU.

a. According to the document “GL-WFT-AM-L4-03 Capital Management – Create AFE”,

Section 6.0 Procedures to Create an AFE – 6.14 states:

i. Branch Plant/Business Unit should be indicated for greater granularity in

reporting and tracking spend.



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ii. While the document does not state that Branch Plant/Business Unit is

mandatory, but it does help with tracking spend.

b. I would think that if either/or were entered than that would suffice.

c. From Jay Wright: There probably are some benefits to making a BU or BP a mandatory

field, but we have not started the evaluation on that, and all the impacts.

6. I went through the whole presentation yesterday, then went to an AFE form & looked

around…that’s when I noticed that myself and my two guys were NOT on any of the drop

downs as AFE originators.

a. Once you enter the AFE you ARE the ORIGINATOR. The drop down box is for OWNER,

which you just do a search for.

b. As an assist the last 6 Owners of AFEs that you created will appear as a starting point for

you.

c. Note that ANY WFT employee in the Microsoft Outlook mailbox can originate an AFE.

7. Can you please explain the budget tracking number field? How do I find the budget

tracking number for an AFE?

a. This is not a mandatory field and you can proceed w/out it. You can contact your local

Fixed Asset department to see if they have a budget number.

8. When we fill an AFE form, for an asset built from existing stock (field build), should we

treat them as new purchase (they are new additions to FA)?

a. Yes they would be treated as a new purchase since the components used are originally

in Inventory.

9. Should we complete the P/L information for assets built from existing stock (field build)?

a. Yes, enough to offer justification and convince the approvers that the spend is a good

business decision. Note: Ideally, an AFE would be done "before" starting the work.

10. Can we originate an AFE this year and related it to last year and put the amount against

last year?

a. NO, this is current year spend. We do not cross quarterly boundaries with spending

corrections.

b. The correct solution will be to complete a new AFE with spending reflected in the current

year/quarter it is expected to happen. Take a negative variance against the current year

plan.

i. If a negative variance in the current year is unacceptable, other approved

projects will need to be pushed into next year.

c. In the future, owners of capital should follow the proper process:

i. Get the AFE Approved.

ii. Create a CR or OR

iii. Issue the Purchase Order

iv. Receive Item and Record Capital Spending.


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Entering Direct Costs:

1. We have a couple of AFE’s that we are trying to submit, but we want to be sure we

understand the P&L portion of the AFE form. I entered the projected revenues and entered

an average 22% DC and let it automatically populate the fields in Red. However, the form

goes through and calculates a Gross Margin on the next page and the 22% doesn’t cover

inventory COS. Is that what the GM line is for? Should I raise my DC percentage to

include COS? That’s not really what it asks for.

a. Yes, External Inv COS should be included somewhere in the Direct Cost section. I would

assume this would be included in the % rate that would be in the calculated DC. I believe

there are other options in the workflow in which % rate can be used to calculate the DC

or users may itemize the DC.

b. By definition, Direct cost is labor, Supplies/consumables (gas, etc.), facilities, ongoing

repair and maintenance, depreciation, inventory/parts . If the direct cost are relatively

even spread and correlated with revenue/usage (thus more labor, consumables) than a

rate is probably easiest but if large infrequent or periodic cost are associated, the

itemized list would be best or combination of itemized list and DC % rate.

i. For example, based on service agreement, every other year consulting fees are

required for heavy testing of asset for service – then I would put this in the other

direct cost line and leave out of the % rate calculation that would be used for

labor, consumables, etc. .

ii. Labor, consumables if in the % rate- I would leave blank.

iii. Other direct cost are typically, outside service , installations (could be considered

startup), insurance, taxes/permits, etc. The gross margin formula in the AFE

system is Revenue minus direct cost, and you would want to include the COS

which will affect your Gross Margin.

iv. Additionally, these cost would directly be related to product/service and need to

be included making it a direct cost.

2. How we should fill out the field “direct cost rate” in the financial justification page of an

AFE? I see that the calculation is simply a percent of the revenue, and understand that the

declared revenue should be what is expected from only the assets that are in the AFE.

However, is the direct cost rate associated to just that fixed asset, or is it a general value

based on our real Direct Costs? For instance if we have an FOP of 30%, then my direct

cost rate would be 0.77 (1/1.3)? If this is true, then should all the other direct cost fields be

left in 0 as these are already included in the “global” direct cost assumption?

a. The direct cost is the cost that is for the asset purchased on the AFE. If you have a

Global parent AFE then the direct cost will include all the FOP from that project, however

on each AFE you do want to include the cost associated with the asset to determine the

direct cost associated with the asset.


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b. From all the financial information you provide on the AFE helps the approver determines

if the asset should be purchased or possibly look for an alternative.

c. The direct cost should represent the direct cost associated with acquiring, maintaining

and operating the asset being acquired—these cost are used to understand payback

periods and cash flow from operating the asset. If an estimated % is used then the

other fields should not be populated if the cost were assumed in the % calculation.

d. I see the options as:

i. Operating expense is related to usage and revenue rate does not fluctuate – use

DC % or;

ii. Operating expense are related flat but periodically there is an additional material

cost as license fee or testing- use DC rate for operating and then add within

OTHER DC a manual amount.

iii. Asset is mainly just improvement of existing – thus no additional ongoing

operating expenses but instead just upfront cost. Use individual itemized line

items and no % DC rate calculation.

e. The direct cost you should include all the cost that are associated with the production of

specific assets, some examples of direct cost are:

i. The materials, labor costs, and the expenses that are directly related to the

production of the product.

ii. The calculated DC is taking Revenue multiply the direct cost rate. The total direct

cost is Repairs &

Maintenance+Consumbles+Labor(costs)+other(depreciation)+other(DC)+depreci

ation+Start-up Expense+Calculated DC.

3. After entering a new AFE I cannot go back and change the details associated with the

direct cost. I see blank boxes that cannot be edited.

a. The reason the user cannot enter direct cost is because during AFE Header entry he

selected to SKIP Economic Justification. He will have to go back in to each AFE and for

that question select "NO" that way he will be able to enter the direct costs.


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Routing:

1. I need to change the routing of an AFE from one person to another. How do I do that?

a. The user is responsible for re-routing, thus the AFE should be returned to Originator, and

changed by them.

b. Those with “Admin” privileges can return it to them by clicking the routing button, then the

return to originator button.

c. Generally speaking, we should never change a routing, unless it comes from above.

2. Can I change the originator on an AFE? The originator is on vacation and her boss needs

to get the AFE routing updated.

a. In the AFE system go to the Admin tab > Change User Name>Export

b. Click Change Originator per AFE.

c. Enter the AFE Number

d. Enter the Network ID of the person to who it is being changed.

e. Click Submit.

f. In order for the new originator to make any detail updates the AFE will have to be

“Returned to Originator”.

NOTE: The “Change ALL” changes the username everywhere in every table. This function should never

be used unless a manager is terminated and another manager is taking over that role (Delegation should

preferably be used to provide access). There should be a big disclaimer message all over it!

3. I see there are automatic additions to the AFE routings now. It would be good if the system

also automatically added the Region Controller based on the “Region” and “Sub-Country”

combination. That would give the local regions the authority to block unwanted CAPEX

spend in their region systems.

a. We are working on some enhancements that add the requirements for roles, but it is

unlikely we will add names to the level you mention. Too hard to keep up with the org

changes that happen so frequent and irregularly.

b. If you have an AFE that is coded wrong, such as an incorrect E-node, let the HelpDesk

know. We may be able to fix it.

c. ADDENDUM: Jay Wright:

i. At the moment we can automatically add approvers on the following AFE details:

1. Operating Unit

2. GBU

3. Sub Product Line

4. Region

5. Expenditure Type

6. Asset Category


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ii. Note that once set up to be automatically added, an added approver cannot be

removed from an AFE without special dispensation.

iii. Also, note that usually, several categories should be selected per approver, such

as Operating Unit, GBU and Region for an approver.

iv. To set these up is somewhat tedious, so it is not something we want to do often,

but if you came up with a list, I (Jay) promise I would look at it (not promising I

will do it though, as not all combination of the above categories are viable yet).

4. Are there any instructions on how we can Automate Routings?

a. We do not have the functionality currently to automate routings.

b. Alternate Example but NOT standard procedure:

i. Pull a report of AFE’s which have been closed/cancelled (Link to SharePoint site

provided by Troy Hood) and send this to the Region Finance Groups and PL

Directors for Review.

ii. The Finance and PL groups would enter if the AFE has to be re-opened and the

reason why as well as when the spend will occur.

iii. File is then reviewed by the PL Directors to ensure the CAPX is in line with the

20## budget.

iv. Send a routing to have the AFE re-opened.

v. The IAM will ensure that the Country Fixed Asset person is copied so they can

go in and update spend & forecast.

vi. In some cases an IF will be completed.

5. Is a way to change the routing on Child AFE’s written against the Parent? The Parent has

already been approved at the highest level and when Child AFE’s are written against the

Parent, it goes to the same list of people. Why bother the people that already approved the

spend with another approval to consume pre-approved amounts?

a. The approvals don’t change. We’re not sophisticated enough right now to vary approval

routes by dollar value, but it’s where we’re going.

6. I am about to raise an AFE, and need your assistance in creating the correct routing for it.

My proposed routing would be as follows (A, B, C, D, E, etc.). Can you verify whether this

would be the correct routing, or if I need to set it up differently?

a. AFE’s must be approved by the necessary signatories of the appropriate business

function or product line and geographic hierarchies according to the GOA levels. . . .

Please find the document entitled Capital Management – AFE Routing that outlines the

Routing process, and requirements and will assist you with selecting the proper routings.

7. How can I amend after the first approver on the route has approved? The AFE has now

disappeared from the routing system and I cannot find who it is now sitting with to be

approved.



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a. The functionality of the AFE (and BSA) routing is that you can change the routing when it

is “your turn to review.” Your turn ends when you approve, until then you should be able

to change, add, delete the routings.

8. Is the Regional Controller required on every AFE?

a. One general guideline is that a Regional Controller be part of the routing of an AFE.

b. For example, an SLS AFE that is raised in the US should include Calvin Hamblin; one

that is raised in Canada should have Janalee Shutiak.

c. An exception is for Industrial Screens GBU and ICD GBU which have their own Global

Controllers. Currently (Allen D Gibson and Malcolm McLeod, respectively.

9. The job description as it appears in the Routing of the Routing & Notes section of the AFE

needs to be updated. Already it was found that the amendments are not from People soft

and must be performed on the basis of regional data. How can this be updated?

a. The AFE system uses MS Outlook as its system of record so if Outlook is not updated,

then it will not be reflected in the AFE system. Your Outlook profile requires an updated

title. You will want to make the update in the Global Address Book from the Weatherford

Exchange to include your title in the Outlook contact card.


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Notification:

1. I am not receiving any notification from the AFE system when the status of AFEs created

by me are being approved/sent back etc. Why am I not receiving notifications?

a. If you are not on the approval list or notification list, then you will not receive any email

notifications.

b. You can update your notification status in your profile. In most cases a user will be

notified upon the AFE reaching “approval” status or upon “Creation”.

c. Users will not receive notification every time the AFE is touched or the status changes.

2. Are slow approvers reminded via e-mail to approve an AFE?

a. Yes, each Friday a follow-up e-mail is sent to slow approvers.

3. I understand only the originator will get email notification of final AFE approval. Can Fixed

Assets or others also be notified?

a. Yes. There is a Notification functionality on the Routing Page. The Originator, Owner or

Approvers on the routing can include other personnel for Notification.

b. This Notification can be set to release at time of Initial Routing, Immediately, or upon

Approval, or a combination of times.

4. Is there a way for WFT staff who are not AFE approvers or added Notified persons, to add

comments to an AFE for the approvers to see?

a. Yes. There is a Note recording feature in the AFE Application.

b. Previously, only individuals on the AFE routing had the ability to add comments as they

reviewed the AFE for approval.

c. This new feature will allow others with View/Print access, and those who receive

Notifications, to go to the Routing and Notes page and add their own notes. These notes

will be seen by the approvers and others with View/Print access.

d. Along with this change, the Attachments will now be accessed on a separate

Attachments page as the Notes are included on the Routing and Notes page.

5. Per the Routing Approval (Section 7.0) in the AFE Procedure document WFT 218178 are

the automated reminders done manually or by the system?

a. The system automatically sends first-time notifications immediately and follow-up

reminders every Friday. The reminders are sent every Friday that the user has any AFEs

to disposition.

Status:

1. An AFE that I submitted is still in the draft stage and I was not clear on how to set the

routing for approval, can you assist?

a. Click on the Routing button on the Routing and Attachments page. You will get a pop-up

window that allows you to add people to the routing. Additionally, you will see some

Routing Instructions in blue that will tell you who to make sure you include in the routing



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that is dependent on the Region/Country/GBU and Asset Category chosen on the AFE

Header screen.

2. Why do I not see a Routing Button on the Attachments and Routing Screen when I am in

Draft mode?

a. The Yahoo Pop up Blocker has been turned on. You can turn it off by going to the Yahoo

on your toolbar and resetting to allow pop ups.

3. I could not find an AFE in table F5543AFE.

a. There can be several reasons for this:

i. The AFE must be at “Approved” status for it to show up in the table.

ii. AFEs with zero “Capital” are skipped and are not loaded in the JDE Header.


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Re-Opening:

1. Guidelines on Reopening an AFE:

In an effort to comply with our policies, AFEs may be re-opened or abated funds may be

adjusted if:

a) The request does not exceed the scope of the original AFE

b) There is sufficient capital available on the AFE to cover the new spending

c) A forecast is provided that includes expected spending rates over the next 4 quarters

d) Proper management approval has been obtained

e) The “original scheduled AFE completion date” is no more than 1 year prior to the

submission date of the re-open request

For Reference, the “original scheduled AFE completion date” is defined as the latter of:

a) The “Date Equip. Req’d” field on the AFE Summary Page

b) The latest date of the quarter specified in the “Spend Forecast Year / Qtr.” columns

on the AFE Detail Page

2. How do you re-open an AFE to review/edit it?

a. If the AFE is still in DRAFT status, the ORIGINATOR can continue to edit and change an

AFE (Edit this AFE button at bottom of AFE Summary screen).

b. Once the AFE has begun its routing it is "locked", unless someone in the routing chooses

to ‘Return’ or ‘Reject’ the AFE at which time it is routed back to the Originator and is

again in DRAFT status.

c. In DRAFT status the Originator can also use the “Forward Draft Only” option to allow

another person to edit the AFE before submitting for Approval Routing.

3. How can I re-open or un-cancel an AFE?

a. When the AFE is flagged “Completed”, users cannot complete the IF reclass, the AFE

must be at an “Approved” status.

b. Please access the AFE Routing Form from the following link:

http://515ecm/dn/WFT230992 to submit a routing to get it re-opened.

c. Alternatively, if not performing an IF reclass, access the AFE Routing System from the

following link: http://515ecm/dn/WFT230992 to submit a routing to get it re-opened.

d. Please keep in mind that the AFE is “stale” and several new approvers may now be

responsible for this capital spend. A new AFE should be sought with appropriate

approvals.

e. An “Approved” AFE should be taken to “Completed” status only, since there is always the

chance that funds have been encumbered that we do not know about (In SAP for

example).

4. What is the Process for Re-Opening an AFE (Troy Hood)




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a. User completes request, choosing one of 5 predefined routes:

i. Artificial Lift & Production: Hood, Dunn

ii. Formation Evaluation: Hood, Timmins

iii. Rigs: Hood, Schneider, Fontana

iv. Well Construction & Completion: Hood, Marklinger

v. Corporate, Manufacturing, R&D: Hood, Mehta

b. I review routing, correcting as necessary & adding PLVPs or GBUMs. I adjust the routing

so I’m last on the list & forward to approvers.

i. Time passes…

ii. When I receive the request back, I’ll re-open AFE, flag request as approved &

implemented.


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Cancel/Close/Delete:

1. Can the Helpdesk cancel an AFE?

a. The Helpdesk cannot cancel an AFE. The originator or owner of the AFE will have the

functionality available to “Cancel” in the floating menu bar within the Routing & Notes

section of the AFE.

2. Why was my AFE Closed?

a. It was closed at the direction of either senior management, or GBU management to

prevent additional spend, such as new POs.

b. As this AFE is over 6 months since creation, a new AFE should be created for new

spend, as we have a new organizational structure, and focus.

c. Note that you do not have re-open the AFE to add manual spend. POs that were already

in the system and are now being received will be added to the JDE Spend bucket of AFE

automatically.

3. When can I Cancel or Delete an AFE?

a. A Completed AFE should not be deleted it should remain in the system as a historical

document.

b. We may at some point move Completed AFEs to another database.

c. Deleted should only be done for AFEs that were never approved.

d. Cancelled should be used for AFEs that reached Approved status, but were never acted

on.

e. The Originator can Delete or Cancel and AFE from the Routing and Notes page.

4. AFEs with recorded expenditures (Manual spend or in future JDE system updates) should

not be cancelled.

a. In past AFEs are marked completed and no additional spend was allowed as AFEs had

to be reopened to add manual spend. I realize now that even as marked complete,

manual spend can be entered resulting in risk; - however, JDE generation of CR/PO

should not be allowed on completed AFEs (only approved with available funds).

5. Who can change an AFE status from Approved to Completed in effect, closing the AFE?

a. Only those with Accounting Access or Admin Access can Complete/Close an AFE.

b. As or 4/18/13, routing form is being developed for those who want to request that an AFE

be closed.

6. Who can change an AFE status from Completed to Approved in effect, reopening the AFE?

a. This is reserved for AFE Admins and must be requested via a routing request to have the

AFE reopened.

b. Please access the AFE Routing Form from the following link:

http://515ecm/dn/WFT230992 to submit a routing to get it re-opened.

7. Is delete option is still available for “Draft” AFE?



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a. Yes the “Delete” option is still available for “Draft” or “Returned” AFE’s. We just disabled

“Delete” on cancelled AFE’s so that they are not removed from the system and we can

keep an audit trail.

i. Note Completed AFE’s do not have the “Delete” function either.

8. Will the Delete option will not be applicable for “Under Review” or “Approve”? (i.e.

Originator can only cancel the AFE? Or Originator can still delete the AFE directly instead

of cancelled?)

a. The “Delete” option will still be applicable for AFE’s “Under Review” but is not applicable

for AFE’s that have been “Approved”.

i. Delete should only be used for AFEs that were never approved (i.e. in Draft or

Under Review status).

ii. Closed should be used for AFEs that reached Approved status, but were never

acted on. (This is done from the Spend & Forecast menu only by Accounting

Role or Admin users)

iii. Once and AFE is returned to the originator (if it is in Draft, or Under Review), The

Originator can Delete or Cancel and AFE from the Routing and Notes page.


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Parent/Child/Supplemental AFEs:

1. If the parent AFE is a global AFE then why wouldn’t a child AFE be Global as well?

a. Child AFEs are not global in nature. They are for specific spend needs, and we are

capturing spend against child AFEs.

b. You can no longer have spend against a Global AFE.

2. I am trying to create a child AFE against a global parent AFE. Usually I choose Global as

region and choose Global US as country. What should I be using now?

a. A child AFE should never be “Global”, as it is specific.

b. If the child is for US capital spend, then you should choose US as the region.

3. How can I tell if an AFE is a Parent or Child?

a. A child is created from the Parent AFE using the “Create Child AFE” button.

b. If the Parent/Child AFE Reference box (below) is not visible after the AFE is input, then it

is not a Child AFE as it was not created from the Parent.

4. Who can create a Child or Supplemental AFE?

a. Anyone can create a child or supplemental AFE as long as they have access to the

“Global” region for the product line.

b. Read-Only access will be a minimum requirement.

5. We have an issue whereby we have 2 x prototype tools which were ordered against an

AFE. The AFE is actually the parent and no child AFE was created. The tools sat in

inventory until there were some jobs run & now our colleagues have a job for them (boat

leaving this evening!!). We have tried to re-class but since the parent AFE is completed,

they have a problem. What is the process here?

a. Since the AFE is a Global/Global parent, you will need to create a Child AFE.

6. How are Child AFE’s tied to a Parent?

a. Child AFEs are created from the Parent, thus creating the relationship. If a mistake is

made and an AFE is not created from a parent, Admins have the capability to create the

relationship.

7. Are there limits or guidelines on the number of child AFE’s that are permitted?


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a. Only up to the point that the child AFEs consume all the approved capital of the parent.

8. Can Parent AFEs be Children of other Parent AFEs or just one level?

a. One level – No Grandparents.

9. How are Projects Tied to a Program, and can projects be moved from one Program to

another (If structure changes)?

a. With the parent representing the program, there is one or more child AFEs per related

project. There can be text description in the Notes of the AFE header to relate them.

b. There is also a field called Local AFE number that is free text entry that can be used to

related projects to a program.

c. There is also another one call “Budget Tracking” that can be used. Neither of these

create any hard coding connection though, but are searchable.

10. Can multiple AFE’s be tied to a single project?

a. Yes, but again, there is only a parent/child level. Many children can be created from a

parent.

11. Can reporting of the Child AFEs be consolidated by reporting on the Parent AFE?

a. Already a built in function.

b. For example, I want to know total cost / forecast for Project 1, which consists of

AFEs (11, 12, 13).

i. This is a Manual Calculation. You can filter on the Local AFE field and export to

Excel.

c. How would I get the total AFE costs for Program (ABC)) which consists of Parent

AFEs (10, 20) [Projects (1,2) and all Child AFEs (11,12,13,21)

i. Already a built in Function.

12. Where would forecasting be done Parent AFE or Child AFEs?

a. Both, but parent forecast do not get reported to management, only Child AFEs.

13. For Child AFE’s that roll up to a Parent AFE:

a. Can the Child AFE’s have different cost centers?

i. Yes.

b. Can the Child AFEs have different depreciation schedules?

i. Yes, but each child has one depreciation schedule. This is only for reporting and

approval though. Any asset bought or created under an AFE can have different

schedules according to the policy.

c. Can the Child AFEs have different Business Enodes?

i. Yes

14. What is the meaning of “AFE Life”?

a. I would define End Of Life (EOL) as the point the AFE is consumed, or it is “Completed”,

or Canceled, or one year after the Completion Date (the Completion Date is the last day


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of the last quarter of the original forecast. One year after the completion date, the AFE

will be closed, all remaining funds will be abated and will not be re-opened)

15. What status is required to make an AFE a ‘child’ of another AFE?

a. AFE cannot be in “Draft” status.

b. AFE must have the following status: “Under Review”, “Approved”, or “Completed”


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WFT Policy and Scope of AFEs: 1. What purchases are exempt from using the system?

a. With the exception of IT related items, the AFE system is to be used for Capital Acquired

items.

b. Per the WFT Fixed Asset Policy Capital Items this means items costing more than $2,000

with a life greater than 1 year.

2. Expense vs. Capital: Who decides whether an item is capitalized or not?

a. Expense vs. Capital is determined per WFT Fixed Asset Policy. This Policy can be found

on the WFT Intranet using quick search “Fixed Asset Policy”.

3. If it's within my GOA level, can I approve my own AFE? This is for IT-related stuff primarily.

a. No, you must have at least one other approver.

4. Does LIH (Lost In Hole) replacement equipment AFEs also have to be included in the

system?

a. Yes this is for ALL Weatherford AFEs.

5. In the part of AFE line items there is not an option for “rent” in a specific case we have to

rent software for the job, how do we have to proceed in this case?

a. AFEs are for Capital Items. Rent is an expense item through POs.

b. However, when there are required expense items as part of the AFE, they are included in

the AFE form as expense. This is to give the complete financial measurement picture

when evaluating the AFE.

6. Is the AFE Log intended for capital purchases only or all expenses?

a. Danielle Nicholas has advised that expense items (except for IT PC purchases at the

option of local Regions) should be ordered through POs. We do include expense items

along with AFEs to get accurate financial measurements of profitability.

7. How do we treat any required markup on transferred assets?

a. By the nature of the transfer, this is not an AFE related transaction, but rather an asset

transfer of previously reported CAPEX.

b. However, as regards the correct accounting, in JDE, the markup portion can be treated

as a separate child asset on the book of the receiving company.

c. The markup is eliminated in consolidation i.e. I/C profit of sender, markup asset value on

receiving company. As the asset is depreciated this elimination will eventually go away.

d. Since on the local company book this markup is a valid amount paid, it should be

recorded.

8. Do I need to raise an AFE for a purchase that will be manufactured by another WFT Unit?

a. Yes. If this is a Capital item, the order goes to the Manufacturing Unit that is producing

the Capital item for sale.

(Note that non-Capital purchases from a manufacturing plant do not require AFE’s. You could buy a

Rental Asset like a Drilling Jar from manufacturing that requires an AFE, but you may buy Drilling Jar




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repair parts that are inventory items and do not require an AFE. You have to look at what you are buying

and not just who you are buying it from. For the Capital items, the receiving unit Capitalizes that item

received. The receiving unit is increasing Capital, reporting CASH_ADDS_PPE CAPEX and should raise

the AFE.


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JDE CR/OR and Related Process:

1. I have just notice that there is a new requirement where AFE information is compulsory.

The AFE column does not allow the use of a “.” Dot symbol and there is no visual assist

available. What should the user put in that column if there is no AFE due to the value

being below USD 2,000?

a. Since the policy states that inventory less than $2000 does not need to be capitalized, no

depreciating asset recorded is needed, and no AFE is needed to book spend against

since it is not capital spend. Do not use the IF re-class application as this creates a

depreciating asset.

b. The procedure would be:

i. If the item was purchased on a PO as an NP line to an expense account, use the

IA reclass application to adjust it in to a RN part number. This will create a non-

financial asset that does not depreciate.

ii. If the item was in inventory, then an II reclass should be used to issue to an

expense account (revenue account that is going to get the revenue for its rental),

then as above, do an IA to create the non-depreciating asset.


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2. How does the new JDE/AFE process affect creation of a zero cost SR asset, by receipt of a

zero cost RN PO line?

3. How does the process affect creation of a zero SR cost asset, by fixed assets directly into

system?

4. How does the process affect the creation of a zero cost leased SR asset?

5. How does the process affect the creation of SR asset via an IA transaction?

a. If the item was purchased on a PO as an NP line to an expense account, use the IA

reclass application to adjust it in to a RN part number. This will create a non-financial

asset that does not depreciate.

b. If the item was in inventory, then an II reclass should be used to issue to an expense

account (revenue account that is going to get the revenue for its rental), then as above,

do an IA to create the non-depreciating asset.

6. How does the process affect the building of an asset though the EM module (Project WO

capturing costs into CIP through PO coded to WO)?

a. Pending – Len Houlston response.

7. How does the process affect building and purchasing of SR assets for international AFE?

a. No affect, same process.

8. Will the req. use the same approval routing as before? (Before CR/PO for builds for an AFE

were only routed to fixed assets to track spend on AFE, will this still be required?)

a. No change

9. Will PO coded to a WO still need a capital requisition first since the purpose of that

particular PO is not to directly purchase the capital but instead it’s merely a portion of the

whole?

a. Pending – Len Houston and Len & Richard … discussion needed

10. How do credits to PO affect the new process, will the credit apply close to real time as the

debit to the AFE spend?

a. Request to have AFE re-opened through Weatherford Routing System Request


11. What is the actual lag time meant by “close to real time”?

a. 15 minutes

12. Is there a process for Assets transfers from / to an intercompany? There are existing

assets owned by WFT which AFE has been spent, now if we need one of those assets

which is currently being depreciated, we locally need an authorization to have that asset

transferred, we used to issue a CR without being converted to a purchase order-transfer

and for the AFE field we used to put WFT OWN so we knew it was an intercompany

transfer of an existing asset, now it is not possible, how can we handle that?

a. The Capital Requisition cannot be used to as an approval mechanism for the

intercompany transfer of assets.



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b. A local routing should be created to accomplish this routine if one does not already exist.

c. Contact your local IT JDE Helpdesk.

13. Where can I find the QRC’s for the new AFE/CR requirements or any other AFE related

QRC?

14. Everything you need should be here: http://theportal/wms/am/SitePages/SYS-AFE.aspx

15. We have a problem with some PO were associated with incorrect AFE. How can we fix this

issue? I should correct the POs? Or just the correct manually the AFE System? JDE

migrates month information or cumulative?

a. This is a JDE Help Desk Issue. They should be able to correct the PO or have the

helpdesk cancel them and start over.

16. There is an AFE at “Under Review” status, with approval process in routing. Our customer

needs the equipment for urgent operations, but with the new system integration between

AFEs and JD Edwards, it is impossible to create a CR to purchase the necessary

equipment. Is there a way to bypass the routing to originate a CR on JD Edwards by

Contingency?

a. These checks were put into the AFE system to prevent such occurrences; there is no

way around this.

b. The AFE must first be approved before a Capital Requisition for a PO or WO can be

created.

c. You can however try contacting the routing list to try and expedite the AFE approval.

17. Can we purchase IT equipment through normal OR without the need to go through the

AFE process if each item value is less than USD 2000?

a. Yes. You only need to create an OR for approval if it is an expense item and not a capital

item.

NOTE: Until future notice, an AFE should be created for IT items, with the laptops being listed as

expense items. This AFE will not be useable on a CR, which is not required anyway but serves to seek

approval.

NOTE: From Tom Redlinger on behalf of Peter Fontana: - Many areas are now using a separate routing

for Expense Items. This is acceptable as long as it complies with local policy.

18. When I try to Enter/Chg Capital Req (CR)(NP) – w/Appr [Order Header] I get the error (for

example) that AFE # 81763 is invalid. What is happening?



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a. The Fixed Asset policy states that inventory less than $2000 does not need to be

capitalized, thus no depreciating asset recorded is needed, and no AFE is needed to

book spend against since it is not capital spend.

19. There is a JDE transaction “MA” that can perform this task. Some locations would also

use “II” transaction to expense the item, and then finance would pick it up and manually

update the fixed asset register to capitalize the inventory WAC to the parent asset. Is

there a standard method recommended by the JDE team to do this?

a. MA Charges to depreciation account and is a document type used in the S/R Issue to

Fixed Assets.

20. How can I still reference the AFE on non-stock purchases “expensed” through a Capital

Requisition? If an AFE is no longer required or usable on a CR for expensed Items, how

can I track PO’s related to a particular AFE?

a. Functionality currently does not exist to track AFE’s for OR’s.

b. The AFE would have to be referenced in the “Ref#/Delivery Ticket#” field of the OR. This

is the VR02 alias. However, it is not a controlled field and may not be searchable.


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21. In the new process for converting CR’s to S2 orders, does the AFE # from the CR now get

populated on the S2 automatically?

a. Yes it does. The AFE # entered in a CR, will be carried all the way to the receiving

document, and invoice, if the transfer is created by conversion from a CR.

22. It seems that the QRC “Converting SR Capital Req” refers to capital requisitions only.

What if portions of the AFE costs are to be expensed (not capitalized)? What is the

process around this?

a. A CR can have both items to be expensed and items to be capitalized. (A CR should not

be used if there are no items to be capitalized).

b. Presently, we are not tracking expense item purchases against an AFE, so you simply

use a normal OR/OP process.

23. For both IC and 3rd party CAPEX a Capital Requisition CR needs to be raised referring to

the AFE. When that’s approved, it can be converted to a PO (for 3rd party Vendors). Will

this PO automatically be approved when converted from a CR – as the CR has gone

through the approval route?

a. Yes, if CR is approved and then converted to PO (OP), the OP is automatically approved.

But it does not mean that we do not need approval route for OP, as approval routes from

requisition does not automatically get transferred to a purchase order. Incase if the OP

needs to be amended for some reason (requested date, object accounts…etc), then that

amendment needs to be approved hence OP approval route is needed.

24. User wants to change the vendor number on a PO and is getting the error “Error PO

Amount Exceeds Available Funds”. The AFE is approved and funds are available. Why is

this error occurring?

a. The reason for the error is that when you change the supplier, the currency code

changes from USD to GBP. So for example if the previous order total was 100 USD, now

its 100 GBP and the AFE only has 20 USD remaining and so when you click ok, it

converts the 100 GBP to USD and so the new order total is 153. So the difference in

order total is 153(new order total)-100(order total before) = 53 USD and the AFE only has

20 USD and so you get the error. (See Screenshot of this particular PO below).


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25. In reviewing the Transaction Detail for an AFE, I noticed that this has not populated even

though there have been receipts.

a. You have to look in the F5543AFS table to see the receipt transactions that show up as

JDE spend on an AFE. F5543AFD hold a list of stock items that are marked for re-class,

and make up the Encumbered for re-Class amount.


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26. I have an AFE for an approved amount but observe that there are several CR’s risen

against this AFE for an amount that exceeds the approved AFE. How is this possible that

the system would allow multiple CR’s with an excess amount?

a. You can raise as many CRs referencing an AFE, for any amount you want, but they will

not be allowed to be converted to a PO, if there are not enough funds left on the AFE

(definitely the case when the CR is for an amount greater than the AFE). CRs do not

create any encumbrance of funds on an AFE.


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Item Reclass & Serial Numbers:

1. Would you know if it is the Asset and Inventory team’s responsibility to physically stamp

the serial number on the Asset?

a. It is the responsibility of each Branch for S/R Receiving of assets. A Materials, Inventory

or Asset Coordinator/Supervisor/Manager should ultimately be responsible to ensure the

correct Serial Number is stamped on the asset prior to IF reclass. It is not a defined

process anywhere in Weatherford.

2. Is there a global standard for the serial numbers?

a. There is no direction or official requirement. Users creating S/R Serial Numbers have

one of the four options:

i. Next number sequence upon receipt (it can be forced through the Item/Branch

record changing Lot Process Type from 6 to 7 for an RN, Stock would be 2 to

3)

a. Materials, Inventory or Asset Coordinator/Supervisor/Manager creates serial number upon receipt

b. Ensure PO is correct … item number is the correct item on PO c. Serial Database is populated, user must go into the Serial Database

and populate fields with appropriate data (INVQRC_Work with Serial Database)

ii. Use existing Manufacturer’s Serial Number iii. Use existing Work Order number stamped on tool iv. If Consigned or Third Party Rental, add CON or TPR to the front of the existing

vendor’s serial number

In a perfect world (future Best Practice, IN MY OPINION):

Internally manufactured items would have the S/R Serial Number (with a Weatherford

logo stamped in front of the S/R SN) created and stamped on the tool along with the

Work Order and Manufacturer’s Serial Number prior to shipment and documented on

transfer orders. Purchased assets would have the serial number created at the time of

purchase and documented on the Purchase Order, vendors would be responsible for

etching serial numbers on the tools (Receiving to validate Serial Numbers or to etch it

upon receipt). Which would save people time and alleviate a lot of errors.

3. What is Manual vs. System Spend?

a. Spend (manual or system) is not when you buy a stock item, or transfer a stock item to

your inventory, but when you create an asset from a stock item?


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b. In other words, if you buy a widget and put it on the shelf, that does not constitute spend

that needs to be added as manual spend of the AFE. Only when you reclass the item to

an asset is AFE spend created.

c. If you buy a RN or RP item from an outside vendor, that IS spend that would apply to an

AFE, as they are bought in as an asset, and an asset record is created at receipt.

4. I am working in the S/R Reclass Inventory to Fixed Asset – [Item Reclassification] module

in JDE and getting an error: “Error PO Amount Exceeds Available Funds”. There was also

a manual spend in the AFE but we removed that to zero. What is causing the error?

a. The issue is not the spend, but the forecast. Forecast plus spend cannot exceed the

approved AFE amount.

Note: Never remove manual spend, as it was added by the accounting department for spend

that was recorded in Hyperion against that AFE and is necessary for reconciliation to HFM.

b. The system will automatically adjust the forecast with the new functionality we put in, but

there is still some older AFE’s out there that did not do the math before, where spend and

forecast exceeded the approved amount. This can be corrected by re-entering a manual

spend.

5. Is there any direction for operation wise, include BU and supply chain, to understand

when to use RP and RN, either via QRC Glossary, or the User documentation?

a. Not really, it is understood that if you need to keep serial track of something you need to

have a RN number, the problem lies with the fact that Windchill puts all Rental Items into

JDE as RN in Item Master and DIST and some users copy into their Branch and change

them to be RP to use, others dupe them into the Branch as RN but do nothing with them

subsequently so we have RPs as RN and RP mixed up but not necessarily transacting

with them.

6. This one can be related with #1, will WFT have a plan to standardize the line type for

certain rental items, which one go to RP and RN, include the DIST BP?

a. We generally know via the Windchill Team under Graeme whether or not an Item is to be

RP or RN.

7. Does corporate allow different region to decide their own whether to use SN on RP? Any

procedure for this? Traceability issue and/or control gap will be occurred for this situation

when one country/region use SN on RP and another party doesn’t use SN. The control gap

will be occurred.

a. Again it is understood that an Item should be RN or RP globally however certain regions

wanted to serialize RP so instead of them holding as RN we changer RP so they can

serialize and still keep as RP. Transferring Rental Assets as RP or RN to a Branch that

has it as the other line type causes problems for the Fixed Asset folk.


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8. Does the IF application now requires an AFE# and is this AFE field in the IF application

mandatory?

a. The IF application does require a valid AFE with available spend.

9. In a situation on an IF for equipment worth $100k, supporting by an original AFE of $80k

and supplementary AFE of $20k, which AFE should the user input when performing the

IF?

a. Best practice would be to create two IF transactions, but if that does not fit the case

where you have multiple “F” lines on the IF to create one “T” line exceeding a single AFE

available spend, you can put different AFE numbers on each “F” line.

10. The AFE # is required when converting from inventory to rental assets however JDE

receiving of purchase order converted from CR will also trigger an update in the AFE

system as spent. Therefore will there be a duplication of update when the purchase of

inventory from WFT MFG plant is first received and subsequently convert to rental assets?

a. Only receipt of a PO (OP) to an external vendor for assets, or reclass of inventory with

the IF application will create spend. Receipt of an ST/OT, S2/O2, or OF does not create

spend.

11. Will the IF reclassification system function in the case for only 1 equipment but using 2

AFE# (original AFE and supplementary AFE)? There is insufficient balance on the original

AFE thus a supplementary AFE is required therefore should the user insert only the

supplementary AFE#? Or is the user able to insert both AFE# in the single field?

a. The user can use only one AFE #. In the near future, the case described will not be an

issue, as we are going to change the system to allow all supplements to be used on the

original AFE.

12. Can I still do inventory adjustments for a repair/maintenance?

a. Completing an AFE means no new spend.

b. This does not mean that old spend authorized by the AFE cannot be added as manual

spend to the AFE, but it needs to already be documented by a document like a JE, or IF

reclass, or transfer order receipt or something else that is reflected in the GL.

13. I’ve tried to IA for re-class inventory to fixed asset. But I’m getting an error stating :

“Ownership Value is in Error”. How can I fix this?

a. Refer user to the JDE/IT Helpdesk as this has nothing to do with AFE’s.

14. I understand that for items less than $2K, we should expense it and adjust it back as a

rental item. Should we adjust back the item at the original purchase price as the NBV or

should we adjust back the item at zero NBV?

a. By policy, only items that cost over $2000 or have a life greater than one year are to be

classified as assets (with the exception of RN and RP line type serialized service items).

b. Thus if they are buying an item that does not meet the above criteria, it will be expensed,

and will never be re-classed to a depreciating asset.


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c. If it is going to be a depreciating asset as a serialized RN or RP, so that it can be put on a

delivery ticket as a rental item, then it should be received into inventory, then re-classed

with the system weighted average cost as the Gross Book Value, utilizing a valid AFE on

the re-class application.

15. For assets below $2K we should expense first then adjust back as assets. In this case,

there will be no AFE, should we adjust back as the original weighted average cost?

a. If a manufacturing location, adjust back at Standard Cost. All other locations will adjust

back at Weighted Average Cost (WAC).

16. If the inventory items were below $2K, do we need to raise an AFE? Do we capitalize the

WAC of the item directly to the parent asset without an AFE, or should we just expense the

item?

a. Tangible items costing 2,000 USD or less are not considered fixed assets and do not

require an AFE.

b. But if the items in combination (creating an asset out of individual inventory items)

product an asset greater than 2,000 USD then an AFE IS required.

i. The AFE will be a Capital AFE in this case and capitalized via WAC; unless at a

mfg. facility then it would be capitalized at Standard Cost.

17. BU Managers are asking whether JDE system is able to remove the link between AFE

number and IF function for items with values less than $2,000 that is in accordance with

the company policy?

a. No, the requirement to use an AFE on an IF reclass will not be removed.

b. BU managers need to use the proper procedure to create a non-financial asset for items

that were expensed due to the value being less than $2000.

c. They should not be using an IF reclass function. They should use an II to expense the

stock item, and an IA to create the asset.

18. We have an issue whereby we have 2 x prototype tools which were ordered against an

AFE. The AFE is actually the parent and no child AFE was created. The tools sat in

inventory until there were some jobs run & now our colleagues have a job for them (boat

leaving this evening!!). We have tried to re-class but since the parent AFE is completed,

they have a problem. What is the process here?

a. Since the AFE is a Global/Global parent, you will need to create a Child AFE.

19. We convert stock to fixed assets at our CW which are then shipped to people ordering

from the CW as an asset. Will the QRC – MFG Converting CR to Transfer Orders S2/O2 and

ST/OT allow me to do both the transfer and the IF at the same time?

a. The normal process is:

i. Location that needs creates an AFE.

ii. Location that needs creates a CR (for stock items)


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iii. Location that needs converts CR to a transfer order creating demand on

manufacturing (encumbrance created against the AFE)

iv. Manufacturing fulfills transfer order and ship confirms to location that needs

v. Location that needs receives the S*/O* order for stock items (encumbrance

moved from PO bucket to “to be re-classed” bucket)

vi. Location re-classes stock items to assets with IF re-class application.

(encumbrance relieved, spend created)

b. This can vary slightly:



iii. Manufacturing converts CR to a transfer order creating demand on

manufacturing (encumbrance crated against the AFE)

iv. Manufacturing fulfills transfer order and ship confirms to location that needs

v. Location that needs receives the S*/O* order for stock items (encumbrance


vi. Location re-classes stock items to assets with IF re-class application.

(encumbrance relieved, spend created

c. Lastly, there is one other current Scenario:



iii. Location that needs converts CR to a transfer order creating demand on Central

Warehouse (encumbrance crated against the AFE)

iv. Central Warehouse creates a transfer order creating demand on

Manufacturing(ST/OT if in same company, S2/O2 if different companies)

(encumbrance crated against the AFE)

v. Manufacturing fulfills transfer order and ship confirms to Central Warehouse

vi. Central Warehouse fulfills transfer order and ship confirms to location that needs

vii. Location that needs receives the S*/O* order for stock items (encumbrance


viii. Location re-classes stock items to assets with IF re-class application.


d. When Wireline comes on board, there will be a new one:

i. Central Warehouse creates an AFE.

ii. Central Warehouse creates a CR (for stock items)

iii. Central Warehouse converts CR to a transfer order creating demand on

Manufacturing (encumbrance crated against the AFE)

iv. Manufacturing fulfills transfer order and ship confirms to Central Warehouse


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v. Central Warehouse received transfer order (encumbrance moved from PO

bucket to “to be re-classed” bucket)

vi. Central Warehouse re-classes stock items to assets with IF re-class application.


vii. Location that needs creates a S9/O9 transfer order

viii. Central Warehouse fulfills transfer order and ship confirms to location that needs

20. Is it possible to create one new AFE and reclassify all the items from Inventory to Fixed

Assets? As there are a lot of such items in our Inventory (different Product Lines). And

other case just for example two mills after redressing came back as S type (stock items,

Inventory) and I couldn’t find any records for old mills in our FA register. So should we

create separate AFE for these two mills? Or we may proceed with one AFE for

reclassification?

a. As long as all of the items from Inventory are from the same JDE BU, Product Line, Etc. .

. , then yes you can put as many items in the AFE as required. Then when doing the

Reclassification you can include all of these items in the reclass.

b. If the inventory items are from Different Product lines, then a separate AFE would need to

be done for each.

21. Why do we want to control the Reclassification of Inventory to a Fixed Asset with an AFE?

a. Conversion of an Inventory item to a Fixed Asset represents Capital Spend. The AFE

system is used as the authority document for capital expenditures, and a valid AFE must

be linked to all new capital.

b. Using an AFE will:

i. Allow our fixed asset and accounting team to conform to our reporting

requirements.

ii. Improve our ability to control inventory purchases that are converted to fixed

assets. This ensures items that should have required an AFE but were

expensed get the management approval prior to conversion to an asset.

iii. Allow Corporate, Regional, and Product Line leadership to have visibility and

manage capital within Capex Targets.

22. How is Item Reclassification Treated from an Accounting Perspective?

a. Reclassification is a normal ERP process that changes an inventory item to a Fixed Asset

in Asset System and Inventory System.

b. In the case of conversion of inventory to fixed assets, the cost of inventory is charged to a

depreciation account, an asset is created with a link to the item a serial number, and fixed

asset coordinators are informed of the transaction using JDE workflow to track

depreciation by fixed asset records.

c. Rental assets are part numbered, serialized, and tracked in transfers, delivery ticket

rentals, maintenance, physical counts, and disposal using inventory at zero cost.


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d. Net Book Value is tracked by Asset Management.

23. How does IF Item Reclassification link into other controls with inventory, orders, etc.?

a. Rental Items are assigned a RN or RP “line type” that clearly identifies the item as a

rental asset.

b. Processes use numerous editing rules throughout JDE to insure that rentals and

inventory are property channeled thru the type of documents able to track statuses and

interface with our customers.

24. We are on SAP and have identified capital items in inventory which need to be reclassified

as assets. Do we have to create an AFE since we’re not on JDE?

a. The system does not matter. If the original inventory items were not purchased under the

approval of an AFE with the intent to make assets from them, then a new AFE is

required.

b. If they were originally ordered under an approved AFE, then that AFE should be used,

assuming it is still open and funds remain. If it is an old AFE (before 1/1/2013) and it has

been closed, then a new “fresh” AFE should be completed, to get current approvers

review.

c. In the case where you are on some other system then JDE, there will never be any

encumbrance, and the spend will have to be entered manually against the AFE on

conversion to assets.


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25. Shouldn’t I be able to see AFE Number in the S/R Reclass Inventory to Fixed Asset when

checking past reclasses?

a. There is a fix for this and it is a bit technical.

b. The reclassification transaction, as with all inventory transactions, has a defined set of

fields that are copied to a permanent file for access when you display the transaction by

document number. In order to add to that set, it would be necessary to create a tag file

and further complicate (although it looks very simple) a transaction with many working

parts. This was discussed and ruled out when the AFE tracking was implemented.

c. Since then, we have developed an AFE audit file (F5542AFS) that will link the reclassified

stock item with an AFE. If the need is big enough that we should pursue tracking this

audit file if it is necessary to know the AFE number belonging to reclassification of

inventory to FA.


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26. Do we need an AFE every time a kit is built?

a. Any time inventory is re-classed to an asset, an AFE is required. Instead of a Field Build,

they can use the IF to re-class the inventory parts to an asset, which will require an AFE.

If they continue to use the field build, it will create a new inventory item (the kit), which will

then be re-classed to an asset (again requiring an AFE).

27. We have a bunch of knives which are serialized, each less than $2k, but they add up to a

significant amount of money. We would like to depreciate them accordingly since they

have a lifetime of more than 1 year. The question is, do we need AFEs and do proper ‘IF’

reclassifications or can we simply do the ‘II’ and ‘IA’ then get the finance accountant to

adjust the cost back in so that it will depreciate?

a. By policy, only items that cost over $2000 or have a life greater than one year are to be

classified as assets (with the exception of RN and RP line type serialized service items).

b. So in answer to your question, an AFE will be required because: 1) the knives are

serialized and have a life > 1 year; and 2) the items in combination total greater than

$2000.

c. Since you would like to depreciate the knives accordingly, you would do a proper “IF”

reclassification (using an AFE) as it creates a depreciating asset; whereas the “II” and

“IA” create non-depreciating assets.


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AFE FAQ - HELP

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MAR-1-2013

REVISION DATE:

AUG-1-2013

PREPARED BY:

PHILIP M. HRONAS

REVIEWED BY:

EVA ELLISON

APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 54 of 59

Connectivity and System Errors:

1. How can I access the AFE Application when I am away from a WFT Facility?

a. Since the Application is Web based you can access it from any location where there is an

internet connection (Home, Hotels, Airports, Coffee Shops, etc.).

b. From your internet browser you will need to connect to myweatherford.com.

c. There is an option on the myweatherford.com home page called Network Connect.

d. This is the only way you can use this application through the web.

e. All you have to do is click on the Network Connect button and once connected you can

open a new browser window and go directly to http://intranet/afe and access the

application.

2. Why did the new AFE I was building not advance to the next page after I completed the

first page Header record?

a. The most common reason is that one or more of the required fields (those with the red

dot) was either missing or entered incorrectly. The application will show you these with a

yellow triangle.

b. If you do not have any yellow triangles, then this is a connectivity issue. The root cause of

these cases are always the same, something is interfering with the JavaScript. Normally,

it is because they are using the MyWeatherford.com VPN and not opening a new

window.

c. Another possibility is that the pop up blocker is on. Also try to remove the tool bar and try

again.

3. I have preselected all AFE's within capital in my area to be searched for a drilldown on a

list, then I got a Microsoft Internet Explorer Message that the “Operation was Aborted.”

Why did I get this message?

a. More than likely it is an issue with distance from the server and the large amount of

JavaScript this page creates.

b. We recommend trying a more restrictive search (e.g. use a date range to split the

retrieved records from the search) and seeing if that works.


MANAGEMENT

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AFE FAQ - HELP

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MAR-1-2013

REVISION DATE:

AUG-1-2013

PREPARED BY:

PHILIP M. HRONAS

REVIEWED BY:

EVA ELLISON

APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 55 of 59

General Facts:

1. What is Manual vs. System Spend?

a. Spend (manual or system) is not when you buy a stock item, or transfer a stock item to

your inventory, but when you create an asset from a stock item?

b. In other words, if you buy a widget and put it on the shelf, that does not constitute spend

that needs to be added as manual spend of the AFE. Only when you reclass the item to

an asset is AFE spend created.

c. If you buy a RN or RP item from an outside vendor, that IS spend that would apply to an

AFE, as they are bought in as an asset, and an asset record is created at receipt.

2. Joint Venture AFE’s will only have Michael Strauss (Board of Directors for the JV) as an

auto add approver.

3. How is Working Capital (WC) calculated in the AFE Application?

a. The major accounting components of WC are calculated based on the revenue estimate

and the DSO for the Unit for Accounts Payable, and the DPO Days Payables outstanding

for the unit based on the direct cost estimates.

b. The WC represents additional cash needed for the project and is used as a component of

the financial measurement calculations. Page one of the summary AFE shows the

Working Capital along with the tangible asset Capital requirements.

4. An AFE is always required to procure new (to WFT) assets, regardless if the source is WFT

on JDE, WFT not on JDE or an external vendor. If this is in regards to existing WFT

assets, then no, an AFE is not required. A simple asset transfer order is created.

5. An AFE is incorrectly labeled as Operating Unit- Manufacturing. This AFE should be

Operations. Could you please correct this?

a. According to Corporate Accounting; while the Operating Unit reflects "Manufacturing” (In

Error) the enode referenced for the spend is an "Operations" enode and so charges will

not be booked to manufacturing.

b. At this point, it would be difficult to make changes to the AFE header which is where the

Operating Unit field is input. I as an AFE Admin cannot even change it so it would require

developmental support.

6. Can an AFE be changed from Expense to Capital?

a. Yes. If an AFE (based on amount) was set up incorrectly, it can be changed from an

Expense to a Capital designation.

b. Users can do one of two things:

i. Request that the AFE be closed (this can be done by the accountant) and

create/submit a new AFE with the proper designation as “Capital”.


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AFE FAQ - HELP

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MAR-1-2013

REVISION DATE:

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PHILIP M. HRONAS

REVIEWED BY:

EVA ELLISON

APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 56 of 59

ii. Request that the AFE be changed from an Expense to a Capital AFE (Admin can

do this for you), but will need to have approval of the AFE Originator, AFE

Owner, Region, and GBU.

iii. Approval is required since the AFE was approved under the impression that

items would be expensed. With the change to “Capital”, charges will be handled

differently from an accounting perspective and a Capital AFE will need to have

forecast actively updated and maintained.


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AFE FAQ - HELP

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MAR-1-2013

REVISION DATE:

AUG-1-2013

PREPARED BY:

PHILIP M. HRONAS

REVIEWED BY:

EVA ELLISON

APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 57 of 59

Definitions: AFE – Authorization for Expenditure

AFE Originator – The individual who is responsible for initiating and completing the AFE form, setting its

initial routing & making any revisions requested by approvers.

AFE Owner – Where applicable, this is the regional/GBU fixed asset manager. Otherwise, this is the

individual who owns the budget that will eventually pay for the fixed asset.

Capital AFE – A Capital AFE is defined as an AFE where at least one detail item is intended to be

capitalized and is marked as such. It can contain additional item that are intended to be expensed.

Child AFE – An AFE related to a Parent AFE, representing specific expenditure plans, based on Region

or Product Line business needs previously approved by the Parent AFE. Child AFEs require GOA

approval to the Region VP Level.

Expense AFE – An Expense AFE is defined as an AFE that is only for expensed items, as such all detail

items will be noted to be expensed.

Fixed Assets – tangible or intangible items that meet the requirements of the Fixed Asset Policy FA-1.06

referenced above.

Parent AFE – Parent AFEs are intended to be used to seek approval for product line forecast. Spending

will not be recorded against Parent AFEs. Spending will be recorded against Child AFEs for specific

requirements.

Routing – The consecutive hierarchical movement of an AFE through an approval process. Approvers

may be selected at-large, or determined by the content of the AFE and the approver’s organizational role.

Standard AFE – A Standard AFE is for business requirements not related to Parent AFEs. A Standard

AFE cannot have child AFEs, but can have Supplemental AFEs.

Supplemental AFE – A Supplement AFE may be required if the original amount requested on a

Standard AFE is insufficient for the needs, or the scope of the original Standard AFE has increased and

additional funds are required. A Supplement AFE requires individual approvals according to the GOA.


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AFE FAQ - HELP

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MAR-1-2013

REVISION DATE:

AUG-1-2013

PREPARED BY:

PHILIP M. HRONAS

REVIEWED BY:

EVA ELLISON

APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 58 of 59

Resources and Links:

1. Link to AFE System: http://intranet/AFE/(S(ag1wrp45jak430jczlmsjiby))/default.aspx

2. AFE Procedures: Reference documents for the user community.

3. Routing System: http://intranet/routingsystem/

4. UAR System: http://intranet/uar/

5. AFE Tracking System Reference Documents: (Including AFE UPK)

6. Capital Management Tool: http://515wbams/CapitalManagement/Default.aspx

a. Help Document Work Instruction

http://intranet/AFE/(S(ag1wrp45jak430jczlmsjiby))/default.aspx

http://515ecm/stellent/idcplg?IdcService=GET_SEARCH_RESULTS&QueryText=dDocTitle+%3Cstarts%3E+%60GL-WFT-AM%60&SearchQueryFormat=UNIVERSAL&SearchProviders=MASTER_ECM%2C&ftx=&AdvSearch=True&folderChildren=&ResultCount=20&SortField=dInDate&SortOrder=Desc

http://intranet/routingsystem/

http://intranet/uar/


http://515wbams/CapitalManagement/Default.aspx


MANAGEMENT

FILE NAME:

AFE FAQ - HELP

REV:

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PAGE:

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LEVEL:

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MAR-1-2013

REVISION DATE:

AUG-1-2013

PREPARED BY:

PHILIP M. HRONAS

REVIEWED BY:

EVA ELLISON

APPROVED BY:

JAY WRIGHT

APPROVED BY:

TOM REDLINGER


Page 59 of 59

Request Help:

Via the Help Desk Help Desk Portal

By sending an email to [email protected]

Or by calling 1-800-435-7178

http://helpdesk.weatherford.com/

mailto:[email protected]?subject=AFE%20System%20Issue

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