R12 Project Costing

Fundamentals
Student Guide

D47868GC10
Edition 1.0
February 2007
D49395
Copyright © 2007, Oracle. All rights reserved.

This document contains proprietary information and is protected by copyright and other intellectual property laws. You may copy and
print this document solely for your own use in an Oracle training course. The document may not be modified or altered in any way.
Except where your use constitutes "fair use" under copyright law, you may not use, share, download, upload, copy, print, display,
perform, reproduce, publish, license, post, transmit, or distribute this document in whole or in part without the express authorization
of Oracle.

The information contained in this document is subject to change without notice. If you find any problems in the document, please
report them in writing to: Oracle University, 500 Oracle Parkway, Redwood Shores, California 94065 USA. This document is not
warranted to be error-free.

If this documentation is delivered to the United States Government or anyone using the documentation on behalf of the United
States Government, the following notice is applicable:

U.S. GOVERNMENT RIGHTS

The U.S. Government’s rights to use, modify, reproduce, release, perform, display, or disclose these training materials are restricted
by the terms of the applicable Oracle license agreement and/or the applicable U.S. Government contract.

Oracle, JD Edwards, PeopleSoft, and Siebel are registered trademarks of Oracle Corporation and/or its affiliates. Other names may
be trademarks of their respective owners.

Author

Jeffrey Colvard, Ph.D.

Technical Contributors and Reviewers

Ed Artiga, Prithi Bandla, Janet Buchbinder, Jean-Francois Chalmers, Sarita Chebbi, Ivy Farren,
Barbara Fox, Steven A. Gordon, Debbie Hendrix, Biju Kattuparambil, Ruth Kukla, Martha
McKillip, Thierry Javelle, David Millin, Tanya Poindexter, Suet Ching Siew, Lata Sundar, Juli
Anne Tolley, Gajjala Prashanti

This book was published using: oracletutor

 Table of Contents

Overview of Oracle Project Costing...............................................................................................................1-1

Overview of Oracle Project Costing..............................................................................................................1-3
Objectives ......................................................................................................................................................1-4
Agenda...........................................................................................................................................................1-5
Oracle Enterprise Project Management Solution...........................................................................................1-6
Oracle Project Costing and Integration..........................................................................................................1-7
Agenda...........................................................................................................................................................1-11
Oracle Project Costing and Project Classes ...................................................................................................1-12
Overview of Resources In Oracle Projects ....................................................................................................1-13
Costing Flow .................................................................................................................................................1-15
Collect and Manage All Costs .......................................................................................................................1-17
Manage Costs ................................................................................................................................................1-18
View Accounting: Transaction Details..........................................................................................................1-20
View Accounting: Final Subledger Accounting Entries................................................................................1-21
View Expenditure Item Details .....................................................................................................................1-22
Summary........................................................................................................................................................1-23
Defining Projects for Costing .........................................................................................................................2-1
Defining Projects for Costing ........................................................................................................................2-3
Objectives ......................................................................................................................................................2-4
Agenda...........................................................................................................................................................2-5
Overview of Projects and Tasks ....................................................................................................................2-6
Project Classes and Project Types .................................................................................................................2-7
Overview of Project Templates .....................................................................................................................2-8
Organizing a Project Structure.......................................................................................................................2-9
Basic Project Information ..............................................................................................................................2-10
Agenda...........................................................................................................................................................2-12
Burden Schedules for Costing .......................................................................................................................2-13
Organization Overrides..................................................................................................................................2-14
Project Currency ............................................................................................................................................2-15
Currencies and Expenditures .........................................................................................................................2-16
Costing Currency Options .............................................................................................................................2-17
Practice - Create a Project..........................................................................................................................2-18
Solution - Create a Project.........................................................................................................................2-19
Agenda...........................................................................................................................................................2-23
Controlling Expenditures Overview ..............................................................................................................2-24
Project Statuses..............................................................................................................................................2-25
Task Chargeable Status .................................................................................................................................2-26
Transaction Dates ..........................................................................................................................................2-27
Transaction Controls......................................................................................................................................2-28
Exclusive and Inclusive Transaction Controls...............................................................................................2-30
Allowable Charges for Each Transaction Control .........................................................................................2-31
Determining if an Item is Chargeable............................................................................................................2-32
Practice - Define Transaction Controls......................................................................................................2-33
Solution - Define Transaction Controls .....................................................................................................2-34
Summary........................................................................................................................................................2-36
Entering Expenditures ....................................................................................................................................3-1
Entering Expenditures ...................................................................................................................................3-3
Objectives ......................................................................................................................................................3-4
Agenda...........................................................................................................................................................3-5
Costing Flow: Enter Expenditures.................................................................................................................3-6
Expenditures Overview .................................................................................................................................3-7

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

i
 Multiple Organization Access Control (MOAC)...........................................................................................3-8
Expenditures Overview .................................................................................................................................3-9
Currency Fields for Expenditures ..................................................................................................................3-11
Pre-Approved Batch Expenditure Entry Flow Overview ..............................................................................3-12
Statuses for Pre-Approved Expenditure Batches...........................................................................................3-13
Enter Pre-Approved Batches .........................................................................................................................3-14
Submitting an Expenditure Batch ..................................................................................................................3-16
Practice - Enter an Expenditure Batch .......................................................................................................3-17
Solution - Enter an Expenditure Batch ......................................................................................................3-19
Reversing an Expenditure Batch ...................................................................................................................3-24
Correcting Expenditure Batches ....................................................................................................................3-25
Copying an Expenditure Batch......................................................................................................................3-27
Reviewing Project Expenditures....................................................................................................................3-28
Viewing Accounting Lines ............................................................................................................................3-31
Practice - Use Expenditure Inquiry............................................................................................................3-32
Solution - Use Expenditure Inquiry ...........................................................................................................3-33
Agenda...........................................................................................................................................................3-40
Automatically Reversing Expenditure Batches .............................................................................................3-41
Releasing the Batch .......................................................................................................................................3-42
GL Periods for the Expenditure Items ...........................................................................................................3-43
Guided Demonstration - Enter an Automatically Reversing Batch ...........................................................3-44
Agenda...........................................................................................................................................................3-46
Upload Expenditure Batches from Microsoft Excel......................................................................................3-47
Upload Contingent Worker Timecards..........................................................................................................3-49
Agenda...........................................................................................................................................................3-51
Expenditure Batch Reports ............................................................................................................................3-52
Agenda...........................................................................................................................................................3-53
Costing Flow: Import Transactions ...............................................................................................................3-54
Overview of Transaction Sources..................................................................................................................3-55
Overview of Transaction Import ...................................................................................................................3-56
Resolving Import Exceptions ........................................................................................................................3-57
Correcting Rejected Transactions within Oracle Project Costing..................................................................3-58
Summary........................................................................................................................................................3-60
Implementing Expenditures ...........................................................................................................................4-1
Implementing Expenditures...........................................................................................................................4-3
Objectives ......................................................................................................................................................4-4
Expenditures Implementation Steps ..............................................................................................................4-5
Agenda...........................................................................................................................................................4-6
Expenditure Categories..................................................................................................................................4-7
Define Revenue Categories ...........................................................................................................................4-8
Define Units...................................................................................................................................................4-9
Expenditure Type Classes..............................................................................................................................4-10
Define Expenditure Types .............................................................................................................................4-12
Multiple Expenditure Type Classes Per Expenditure Type ...........................................................................4-14
Practice - Define an Expenditure Type......................................................................................................4-15
Solution - Define an Expenditure Type .....................................................................................................4-16
Agenda...........................................................................................................................................................4-19
Transaction Control Extension ......................................................................................................................4-20
AutoApproval Extension ...............................................................................................................................4-21
Agenda...........................................................................................................................................................4-22
Define Transaction Sources...........................................................................................................................4-23
Example Predefined Transaction Sources .....................................................................................................4-24
Example Predefined Transaction Sources: Manufacturing and Inventory.....................................................4-25
Agenda...........................................................................................................................................................4-27
Listings ..........................................................................................................................................................4-28
Summary........................................................................................................................................................4-29

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

ii
Performing Cost Processing............................................................................................................................5-1
Performing Cost Processing ..........................................................................................................................5-3
Objectives ......................................................................................................................................................5-4
Agenda...........................................................................................................................................................5-5
Overview of Costing......................................................................................................................................5-6
Costing Concepts...........................................................................................................................................5-9
Overview of Encumbrance Accounting.........................................................................................................5-10
Agenda...........................................................................................................................................................5-12
Costing Flow: Distribute Costs......................................................................................................................5-13
Cost Distribution Processing Flow ................................................................................................................5-14
Determining Costs .........................................................................................................................................5-15
Burden Cost Calculations ..............................................................................................................................5-17
AutoAccounting: Distribution Programs .......................................................................................................5-18
Cost Distribution Concurrent Programs ........................................................................................................5-19
Agenda...........................................................................................................................................................5-21
Costing Flow: Create Accounting .................................................................................................................5-22
Integration with Oracle Subledger Accounting .............................................................................................5-23
Generating Cost Accounting Events..............................................................................................................5-24
AutoAccounting: Generate Accounting Events.............................................................................................5-25
Creating and Transferring Accounting ..........................................................................................................5-26
Oracle General Ledger Journal Import ..........................................................................................................5-27
Agenda...........................................................................................................................................................5-28
Streamline Processes .....................................................................................................................................5-29
Submitting Streamline Processes...................................................................................................................5-31
Practice - Distribute Costs .........................................................................................................................5-32
Solution - Distribute Costs.........................................................................................................................5-33
Guided Demonstration - Create Accounting for Costs ..............................................................................5-37
Agenda...........................................................................................................................................................5-40
Overview of Period Processing .....................................................................................................................5-41
Control of GL Period Statuses for Project Transactions................................................................................5-42
Transaction Accounting Methods..................................................................................................................5-43
Period End Date Accounting .........................................................................................................................5-44
Expenditure Item Date Accounting ...............................................................................................................5-46
Expenditure Item Date Accounting with Common Accounting Periods .......................................................5-48
Sweeping Transaction Accounting Events ....................................................................................................5-50
Summary........................................................................................................................................................5-52
Accounting for Costs .......................................................................................................................................6-1
Accounting for Costs .....................................................................................................................................6-3
Objectives ......................................................................................................................................................6-4
Agenda...........................................................................................................................................................6-5
Overview of Accounting for Costs ................................................................................................................6-6
AutoAccounting ............................................................................................................................................6-7
AutoAccounting Rules ..................................................................................................................................6-8
AutoAccounting Rule Mapping.....................................................................................................................6-9
Constant Value ..............................................................................................................................................6-10
Parameter Value ............................................................................................................................................6-11
SQL Select Statement Value .........................................................................................................................6-12
Lookup Sets ...................................................................................................................................................6-13
Selecting a Segment Value Source ................................................................................................................6-15
Assign Rules..................................................................................................................................................6-16
Guided Demonstration - Define a Lookup Set...........................................................................................6-18
Guided Demonstration - Define an AutoAccounting Rule ........................................................................6-19
Practice - Define an AutoAccounting Rule ...............................................................................................6-20
Solution - Define an AutoAccounting Rule...............................................................................................6-21
Guided Demonstration - Assign AutoAccounting Rules ...........................................................................6-23
Agenda...........................................................................................................................................................6-24

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

iii
 AutoAccounting for Costs Implementation Steps .........................................................................................6-25
Accounting for Labor Costs...........................................................................................................................6-26
Accounting for Expense Report Costs...........................................................................................................6-27
Accounting for Usage Costs ..........................................................................................................................6-28
Accounting for Miscellaneous Costs .............................................................................................................6-29
Accounting for Burden Transactions.............................................................................................................6-30
Accounting for Total Burdened Cost.............................................................................................................6-31
Accounting for WIP and Inventory Costs......................................................................................................6-32
Accounting for Supplier Cost Adjustments ...................................................................................................6-34
Listings ..........................................................................................................................................................6-36
Agenda...........................................................................................................................................................6-37
Account Generator.........................................................................................................................................6-38
Account Generator Terminology ...................................................................................................................6-40
Implementing Accounting for Project-Related Supplier Costs and Expense Reports ...................................6-41
Agenda...........................................................................................................................................................6-43
Encumbrance Accounting and Project Budgets.............................................................................................6-44
Project Budget Account Generation Workflow.............................................................................................6-45
Agenda...........................................................................................................................................................6-46
Overview of Oracle Subledger Accounting...................................................................................................6-47
Integration with Oracle Subledger Accounting .............................................................................................6-48
Accounting Event Model Overview ..............................................................................................................6-49
Agenda...........................................................................................................................................................6-51
Oracle Subledger Accounting for Costs Implementation Steps.....................................................................6-52
Oracle Subledger Accounting for Costs Implementation Steps (continued) .................................................6-53
Sources and Custom Sources.........................................................................................................................6-54
Journal Entry Methods and Definitions .........................................................................................................6-55
Associating Subledger Accounting Methods and Ledgers ............................................................................6-57
Post-Accounting Programs ............................................................................................................................6-58
Cross-Entity Balancing Rules........................................................................................................................6-60
Oracle Subledger Accounting Inquiries.........................................................................................................6-61
Audit Reports.................................................................................................................................................6-62
Summary........................................................................................................................................................6-63
Implementing Non-Labor Costing .................................................................................................................7-1
Implementing Non-Labor Costing.................................................................................................................7-3
Objectives ......................................................................................................................................................7-4
Agenda...........................................................................................................................................................7-5
Implementing Non-Labor Costing.................................................................................................................7-6
Non-Labor Costing Implementation Steps ....................................................................................................7-7
Defining Non-Labor Resources.....................................................................................................................7-8
Non-Labor Cost Rates ...................................................................................................................................7-9
Non-Labor Cost Rate Overrides ....................................................................................................................7-10
Practice - Define Non-Labor Resources ....................................................................................................7-11
Solution - Define Non-Labor Resources....................................................................................................7-12
Practice - Test Your Non-Labor Resources ...............................................................................................7-16
Solution - Test Your Non-Labor Resources ..............................................................................................7-18
Agenda...........................................................................................................................................................7-24
Listings ..........................................................................................................................................................7-25
Summary........................................................................................................................................................7-26
Implementing Labor Costing..........................................................................................................................8-1
Implementing Labor Costing.........................................................................................................................8-3
Objectives ......................................................................................................................................................8-4
Agenda...........................................................................................................................................................8-5
Labor Costing Implementation Steps ............................................................................................................8-6
Define Labor Costing Multipliers..................................................................................................................8-7
Labor Costing Rules ......................................................................................................................................8-8
Rate Schedules...............................................................................................................................................8-10

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

iv
 Practice - Define a Rate Schedule..............................................................................................................8-12
Solution - Define a Rate Schedule.............................................................................................................8-13
Assign Costing Rules and Rate Schedules ....................................................................................................8-15
Guided Demonstration - Define an Organization Labor Costing Rule......................................................8-17
Labor Costing Overrides ...............................................................................................................................8-18
Guided Demonstration - Define a Labor Costing Override .......................................................................8-19
Labor Costing Extension ...............................................................................................................................8-20
Labor Transaction Extension.........................................................................................................................8-21
Implement Overtime Processing....................................................................................................................8-23
Overtime Calculation Extension....................................................................................................................8-25
Agenda...........................................................................................................................................................8-26
Listings ..........................................................................................................................................................8-27
Summary........................................................................................................................................................8-28
Implementing Burden Costing .......................................................................................................................9-1
Implementing Burden Costing.......................................................................................................................9-3
Objectives ......................................................................................................................................................9-4
Agenda...........................................................................................................................................................9-5
Overview of Burdening .................................................................................................................................9-6
Burden Costing Terminology ........................................................................................................................9-7
Storing Burden Cost Calculations .................................................................................................................9-8
Accounting for Burden Costs ........................................................................................................................9-9
Project Types and Burdening.........................................................................................................................9-11
Agenda...........................................................................................................................................................9-13
Burden Costing Implementation Steps ..........................................................................................................9-14
Cost Bases and Cost Base Types ...................................................................................................................9-15
Burden Cost Codes ........................................................................................................................................9-16
Burden Structures ..........................................................................................................................................9-17
Practice - Define a Burden Structure .........................................................................................................9-21
Solution - Define a Burden Structure ........................................................................................................9-22
Burden Schedule Types and Burden Schedules.............................................................................................9-25
Assigning Burden Multipliers........................................................................................................................9-26
Defining Burden Schedules ...........................................................................................................................9-28
Practice - Define a Burden Schedule .........................................................................................................9-30
Solution - Define a Burden Schedule ........................................................................................................9-32
Assigning Burden Schedules .........................................................................................................................9-36
Burden Costing Extension .............................................................................................................................9-37
Reporting Separate Burden Transactions with Source Resources .................................................................9-38
Accounting for Cost Adjustments Resulting from Burden Schedule Revisions............................................9-40
Accounting for Cost Adjustments Example 1: Total Burdened Costs without Incremental Transactions ....9-41
Accounting for Cost Adjustments Example 2: Total Burdened Costs with Incremental Transactions .........9-43
Accounting for Cost Adjustments Example 3: Summarized Burden Cost Components without Incremental
Transactions...................................................................................................................................................9-45
Accounting for Cost Adjustments Example 4: Summarized Burden Cost Components with Incremental
Transactions...................................................................................................................................................9-47
Agenda...........................................................................................................................................................9-49
Burden Calculation in Costing Programs ......................................................................................................9-50
Concurrent Programs: Total Burdened Cost Accounting ..............................................................................9-53
Practice - Distribute Total Burdened Costs ...............................................................................................9-54
Solution - Distribute Total Burdened Costs...............................................................................................9-56
Concurrent Programs: Account for Summarized Burden Cost Components.................................................9-60
Maintenance Concurrent Programs ...............................................................................................................9-61
Summary........................................................................................................................................................9-62
Performing Cost Adjustments ........................................................................................................................10-1
Performing Cost Adjustments........................................................................................................................10-3
Objectives ......................................................................................................................................................10-4
Agenda...........................................................................................................................................................10-5

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

v
 Adjusting Expenditure Items .........................................................................................................................10-6
Adjustments to Imported Transactions ..........................................................................................................10-7
Project Status and Adjustments .....................................................................................................................10-9
Recalculate Burden Cost................................................................................................................................10-10
Recalculate Raw Cost....................................................................................................................................10-11
Change Work Type........................................................................................................................................10-12
Change Comment ..........................................................................................................................................10-13
Split Item .......................................................................................................................................................10-14
Transfer Item .................................................................................................................................................10-15
Practice - Perform a Split and a Transfer...................................................................................................10-16
Solution - Perform a Split and a Transfer ..................................................................................................10-17
Change Currency Attributes ..........................................................................................................................10-24
Adjustments to Multi-Currency Transactions................................................................................................10-25
Adjustments to Supplier Costs.......................................................................................................................10-26
Mass Adjustments..........................................................................................................................................10-28
Correct Approved Expenditure Items ............................................................................................................10-30
Practice - Correct an Approved Expenditure Item.....................................................................................10-32
Solution - Correct an Approved Expenditure Item ....................................................................................10-33
Processing Adjustments.................................................................................................................................10-38
Results of Adjustment Processing .................................................................................................................10-40
Agenda...........................................................................................................................................................10-42
Audit Reporting for Expenditure Adjustments ..............................................................................................10-43
Summary........................................................................................................................................................10-45
Integration with Oracle Purchasing and Oracle Payables...........................................................................11-1
Integration with Oracle Purchasing and Oracle Payables..............................................................................11-3
Objectives ......................................................................................................................................................11-4
Agenda...........................................................................................................................................................11-5
Overview of Supplier Costs...........................................................................................................................11-6
Oracle Purchasing and Oracle Payables (Accrual) ........................................................................................11-7
Oracle Purchasing and Oracle Payables (Cash).............................................................................................11-9
Agenda...........................................................................................................................................................11-11
Entering Project-Related Information............................................................................................................11-12
Validating Project Information ......................................................................................................................11-14
Budgetary Control Activation........................................................................................................................11-15
Commitment Reporting .................................................................................................................................11-16
Guided Demonstration - Review Committed Costs...................................................................................11-18
Accounting Transactions ...............................................................................................................................11-19
Agenda...........................................................................................................................................................11-21
Integration with Oracle Purchasing ...............................................................................................................11-22
Documents in Oracle Purchasing...................................................................................................................11-24
Practice - Enter a Project-Related Requisition...........................................................................................11-25
Solution - Enter a Project-Related Requisition ..........................................................................................11-27
Practice - AutoCreate a Project-Related Purchase Order...........................................................................11-32
Solution - AutoCreate a Project-Related Purchase Order ..........................................................................11-34
Agenda...........................................................................................................................................................11-42
Supplier Costs and Accounting Methods.......................................................................................................11-43
Integration with Oracle Payables (Accrual)...................................................................................................11-44
Integration with Oracle Payables (Cash) .......................................................................................................11-46
Invoices in Oracle Payables...........................................................................................................................11-47
Practice - Create a Project-Related Supplier Invoice.................................................................................11-48
Solution - Create a Project-Related Supplier Invoice ................................................................................11-50
Agenda...........................................................................................................................................................11-55
Interfacing Supplier Costs .............................................................................................................................11-56
Predefined Transaction Sources ....................................................................................................................11-58
Predefined Transaction Sources (continued) .................................................................................................11-59
Practice - Interface Supplier Costs.............................................................................................................11-60

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

vi
 Solution - Interface Supplier Costs............................................................................................................11-61
Supplier Cost Audit Report ...........................................................................................................................11-65
Expenditure Inquiry.......................................................................................................................................11-66
Viewing Project Adjustments from the Invoice Workbench .........................................................................11-67
Agenda...........................................................................................................................................................11-68
Managing Subcontractor Payments ...............................................................................................................11-69
Managing Financing and Advances...............................................................................................................11-71
Managing Retainage ......................................................................................................................................11-72
Agenda...........................................................................................................................................................11-74
Supplier Cost Adjustments Overview............................................................................................................11-75
Restrictions to Supplier Cost Adjustments in Oracle Project Costing ...........................................................11-77
Guided Demonstration - Allow Adjustments for a Supplier Cost Transaction Source..............................11-79
Adjusting Project-Related Documents in Oracle Purchasing ........................................................................11-80
Writing Off Receipt Accruals in Oracle Purchasing......................................................................................11-82
Adjusting Project-Related Documents in Oracle Payables............................................................................11-83
Adjusting Supplier Costs for Non-Capital Assets .........................................................................................11-85
Manually Adjusting Unmatched Reversing Expenditure Items.....................................................................11-86
Processing Adjustments.................................................................................................................................11-87
Prioritizing Supplier Costs Adjustments........................................................................................................11-89
Accounting for Supplier Cost Adjustments ...................................................................................................11-94
Practice - Adjust Supplier Costs ................................................................................................................11-99
Solution - Adjust Supplier Costs ...............................................................................................................11-101
Agenda...........................................................................................................................................................11-112
Oracle Purchasing and Oracle Payables Integration Implementation Steps ..................................................11-113
Implementing Oracle Purchasing and Oracle Payables Integration...............................................................11-115
Set Profile Options for Project-Related Documents ......................................................................................11-116
Define the Supplier Invoice Account Generator............................................................................................11-118
Defining a Project-Related Purchasing Transactions Account Generator .....................................................11-119
Specify a Default Supplier Cost Credit Account ...........................................................................................11-120
Guided Demonstration - Specify a Default Supplier Cost Credit Account................................................11-121
Define Project-Related Distribution Sets.......................................................................................................11-122
Define Oracle Payables Descriptive Flexfields and Related Profiles ............................................................11-123
Summary........................................................................................................................................................11-124
Integration with Oracle Internet Expenses ...................................................................................................12-1
Integration with Oracle Internet Expenses.....................................................................................................12-3
Objectives ......................................................................................................................................................12-4
Agenda...........................................................................................................................................................12-5
Oracle Internet Expenses ...............................................................................................................................12-6
Expense Report Flow.....................................................................................................................................12-7
Deriving Project Data from Expense Reports................................................................................................12-9
Disconnected Expense Reporting Process.....................................................................................................12-10
Adjusting Expense Reports............................................................................................................................12-11
Practice - Enter and Approve an Expense Report......................................................................................12-12
Solution - Enter and Approve an Expense Report .....................................................................................12-14
Guided Demonstration - Run Expense Report Export...............................................................................12-19
Practice - Interface Expense Report Costs.................................................................................................12-20
Solution - Interface Expense Report Costs ................................................................................................12-21
Agenda...........................................................................................................................................................12-27
Integration with Oracle Internet Expenses Implementation Steps.................................................................12-28
Install and Implement Oracle Internet Expenses ...........................................................................................12-29
Set Profile Options for Project-Related Expense Report Entry .....................................................................12-30
Set Profile Options for Project-Related Expense Report Approval ...............................................................12-31
Define the Project Expense Report Account Generator.................................................................................12-33
Define a Project-Related Expense Report Template .....................................................................................12-34
Summary........................................................................................................................................................12-35
Integration with Oracle Time and Labor ......................................................................................................13-1

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

vii
 Integration with Oracle Time and Labor .......................................................................................................13-3
Objectives ......................................................................................................................................................13-4
Agenda...........................................................................................................................................................13-5
Oracle Time & Labor Overview....................................................................................................................13-6
Disconnected Time Entry ..............................................................................................................................13-7
Collecting and Processing Project-Related Timecards ..................................................................................13-8
Guided Demonstration - Set Timecard Approval Style .............................................................................13-10
Practice - Enter and Approve a Timecard..................................................................................................13-12
Solution - Enter and Approve a Timecard .................................................................................................13-14
Guided Demonstration - Import Timecard Costs.......................................................................................13-19
Editing Timecards in Oracle Time & Labor ..................................................................................................13-21
Contingent Worker Timecards with PO Integration ......................................................................................13-22
Agenda...........................................................................................................................................................13-24
Integration with Oracle Time & Labor Implementation Steps ......................................................................13-25
Install and Implement Oracle Time & Labor.................................................................................................13-26
Set Profile Options for Project-Related Timecards .......................................................................................13-27
Implement Client Extensions to Route and Approve Timecards...................................................................13-28
Summary........................................................................................................................................................13-29
Allocations and AutoAllocations ....................................................................................................................14-1
Allocations and AutoAllocations...................................................................................................................14-3
Objectives ......................................................................................................................................................14-4
Agenda...........................................................................................................................................................14-5
Overview of Allocations................................................................................................................................14-6
Allocation Terminology ................................................................................................................................14-7
Difference between Allocation and Burdening..............................................................................................14-9
Allocation Rules Implementation Steps ........................................................................................................14-10
Allocation Rules ............................................................................................................................................14-11
Basis Method .................................................................................................................................................14-12
Basis Method - Spread Evenly ......................................................................................................................14-13
Basis Method - Target Percent and Spread Evenly .......................................................................................14-14
Basis Method - Prorate ..................................................................................................................................14-15
Basis Method - Target Percentage and Prorate..............................................................................................14-16
Allocation Rule Definition ............................................................................................................................14-17
Source Definition...........................................................................................................................................14-19
Target Definition ...........................................................................................................................................14-21
Offset Definition............................................................................................................................................14-23
Prorated Basis Method Definition .................................................................................................................14-25
Copy Allocation Rules...................................................................................................................................14-26
Deleting or Modifying Allocation Rules .......................................................................................................14-27
Practice - Define an Allocation Rule .........................................................................................................14-28
Solution - Define an Allocation Rule ........................................................................................................14-30
Client Extensions for Allocations..................................................................................................................14-36
Agenda...........................................................................................................................................................14-38
Allocating Costs ............................................................................................................................................14-39
Creating Allocation Runs ..............................................................................................................................14-40
Allocation Run Statuses.................................................................................................................................14-41
Deleting Allocation Runs ..............................................................................................................................14-42
Releasing Allocation Runs ............................................................................................................................14-43
Reversing Allocation Runs ............................................................................................................................14-44
Practice - Process an Allocation Rule........................................................................................................14-45
Solution - Process an Allocation Rule .......................................................................................................14-47
Agenda...........................................................................................................................................................14-57
Overview of AutoAllocations........................................................................................................................14-58
AutoAllocation Rules Implementation Steps.................................................................................................14-61
AutoAllocation Set Definition.......................................................................................................................14-62
Implementing Workflow and Client Extensions for AutoAllocations...........................................................14-64

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

viii
 Guided Demonstration - Review an AutoAllocation Set...........................................................................14-65
Agenda...........................................................................................................................................................14-67
Submitting an AutoAllocation Set.................................................................................................................14-68
Viewing the Status of AutoAllocation Sets ...................................................................................................14-69
Summary........................................................................................................................................................14-70
Asset Capitalization.........................................................................................................................................15-1
Asset Capitalization.......................................................................................................................................15-3
Objectives ......................................................................................................................................................15-4
Agenda...........................................................................................................................................................15-5
Overview of Asset Capitalization..................................................................................................................15-6
Project-Related Asset Processing Flow .........................................................................................................15-9
Accounting Example .....................................................................................................................................15-10
Agenda...........................................................................................................................................................15-16
Project Types for Asset Capitalization ..........................................................................................................15-17
Agenda...........................................................................................................................................................15-19
Asset Processing Flow...................................................................................................................................15-20
Specifying Costs ............................................................................................................................................15-22
Defining Assets for Capital Projects..............................................................................................................15-24
Streamlining Asset Creation ..........................................................................................................................15-26
Asset Grouping Levels ..................................................................................................................................15-27
Asset Cost Allocation Methods .....................................................................................................................15-28
Practice - Define and Assign Assets ..........................................................................................................15-29
Solution - Define and Assign Assets .........................................................................................................15-32
Specifying an Actual Date in Service or a Retirement Date..........................................................................15-45
Capital Events................................................................................................................................................15-46
Generating Summary Asset Lines .................................................................................................................15-48
Assigning Asset Lines ...................................................................................................................................15-50
Sending Asset Lines to Oracle Assets ...........................................................................................................15-51
Guided Demonstration - Create Final Subledger Accounting for Costs....................................................15-53
Practice - Capitalize Assets .......................................................................................................................15-56
Solution - Capitalize Assets.......................................................................................................................15-58
Agenda...........................................................................................................................................................15-70
Adjusting Capital Project Costs.....................................................................................................................15-71
Reversing Capitalization of Assets in Oracle Project Costing.......................................................................15-72
Abandoning a Capital Asset in Oracle Project Costing .................................................................................15-74
Agenda...........................................................................................................................................................15-75
Asset Capitalization Implementation Steps ...................................................................................................15-76
Implement Asset Extensions..........................................................................................................................15-77
Define Standard Unit Costs for Asset Cost Allocations ................................................................................15-79
Guided Demonstration - Define Standard Unit Costs for Asset Cost Allocations.....................................15-80
Enable Retirement Cost Processing...............................................................................................................15-81
Define Proceeds of Sale Expenditure Types..................................................................................................15-82
Practice - Define a Proceeds of Sale Expenditure Type ............................................................................15-83
Solution - Define a Proceeds of Sale Expenditure Type............................................................................15-84
Summary........................................................................................................................................................15-85
Asset Capitalization: Capitalizing Interest....................................................................................................16-1
Asset Capitalization: Capitalizing Interest ....................................................................................................16-3
Objectives ......................................................................................................................................................16-4
Agenda...........................................................................................................................................................16-5
Overview of Capitalized Interest ...................................................................................................................16-6
Setting Up Capital Projects for Capitalized Interest ......................................................................................16-8
Generating Capitalized Interest Expenditure Batches ...................................................................................16-9
Reviewing Capitalized Interest Expenditure Batches....................................................................................16-10
Inactive Capital Projects Report ....................................................................................................................16-11
Agenda...........................................................................................................................................................16-12
Capitalized Interest Implementation Steps ....................................................................................................16-13

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

ix
 Defining Capitalized Interest Rate Names.....................................................................................................16-14
Practice - Define a Capitalized Interest Rate Name...................................................................................16-17
Solution - Define a Capitalized Interest Rate Name ..................................................................................16-18
Defining Capitalized Interest Rate Schedules................................................................................................16-21
Practice - Define a Capitalized Interest Rate Schedule..............................................................................16-23
Solution - Define a Capitalized Interest Rate Schedule .............................................................................16-24
Specifying Capitalized Interest Rate Schedules for Project Types................................................................16-27
Guided Demonstration - Specify a Capitalized Interest Rate Schedule for a Capital Project Type...........16-28
Practice - Assign a Capitalized Rate Schedule to a Project .......................................................................16-29
Solution - Assign a Capitalized Rate Schedule to a Project.......................................................................16-30
Setting Project Status Controls for Capitalized Interest.................................................................................16-33
Guided Demonstration - Set the Project Status Control for Capitalized Interest.......................................16-34
Implementing the Capitalized Interest Extension ..........................................................................................16-35
Summary........................................................................................................................................................16-36
Cross Charge....................................................................................................................................................17-1
Cross Charge .................................................................................................................................................17-3
Objectives ......................................................................................................................................................17-4
Agenda...........................................................................................................................................................17-5
Overview of Cross Charge.............................................................................................................................17-6
Cross Charge Terminology............................................................................................................................17-7
Cross Charge Types Example........................................................................................................................17-9
Processing Methods.......................................................................................................................................17-10
Agenda...........................................................................................................................................................17-11
Borrowed and Lent Processing......................................................................................................................17-12
Project and Task Setup ..................................................................................................................................17-13
Subledger Accounting Process Flow: Cross Charge .....................................................................................17-15
Borrowed and Lent Accounting.....................................................................................................................17-17
Cross Charge Adjustments ............................................................................................................................17-18
Processing Cross Charge Adjustments ..........................................................................................................17-20
Practice - Set Cross Charge Attributes for a Project..................................................................................17-22
Solution - Set Cross Charge Attributes for a Project .................................................................................17-23
Practice - Create and Process Cross Charges.............................................................................................17-27
Solution - Create and Process Cross Charges ............................................................................................17-29
Guided Demonstration - Complete Cross Charge Processing ...................................................................17-37
Practice - Review Cross Charges...............................................................................................................17-40
Solution - Review Cross Charges ..............................................................................................................17-41
Agenda...........................................................................................................................................................17-44
Borrowed and Lent Cross Charge Processing Implementation Steps............................................................17-45
Transfer Price Rules ......................................................................................................................................17-46
Practice - Define Transfer Price Rules.......................................................................................................17-48
Solution - Define Transfer Price Rules......................................................................................................17-49
Transfer Price Schedule.................................................................................................................................17-52
Practice - Define a Transfer Price Schedule ..............................................................................................17-54
Solution - Define a Transfer Price Schedule..............................................................................................17-55
Cross Charge Implementation Options..........................................................................................................17-57
Provider and Receiver Controls for Borrowed and Lent Accounting............................................................17-58
AutoAccounting Rules for Borrowed and Lent Transactions........................................................................17-59
Implement Cross Charge Extensions.............................................................................................................17-60
Summary........................................................................................................................................................17-61
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking ..............18-1
Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking .....................18-3
Objectives ......................................................................................................................................................18-4
Agenda...........................................................................................................................................................18-5
Integration with Oracle Inventory..................................................................................................................18-6
Integration with Oracle Inventory Flow ........................................................................................................18-7
Miscellaneous Transactions...........................................................................................................................18-8

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

x
 Practice - Enter a Miscellaneous Transaction ............................................................................................18-9
Solution - Enter a Miscellaneous Transaction ...........................................................................................18-10
Launching Transaction Managers..................................................................................................................18-13
Transfer and Import .......................................................................................................................................18-14
Guided Demonstration - Process Miscellaneous Transactions ..................................................................18-15
Practice - View Inventory Expenditure Items............................................................................................18-18
Solution - View Inventory Expenditure Items ...........................................................................................18-19
Agenda...........................................................................................................................................................18-21
Oracle Inventory Integration Implementation Steps......................................................................................18-22
Install and Implement Oracle Inventory ........................................................................................................18-23
Enable Project Cost Collection......................................................................................................................18-24
Create a Project-Enabled Transaction Type ..................................................................................................18-25
Guided Demonstration - Create a Project-Enabled Transaction Type.......................................................18-27
Create an Inventory Expenditure Type..........................................................................................................18-28
Set Expenditure Type Profile Option.............................................................................................................18-29
Agenda...........................................................................................................................................................18-31
Integration with Oracle Project Manufacturing .............................................................................................18-32
Importing Project Manufacturing Costs ........................................................................................................18-33
Transaction Sources.......................................................................................................................................18-34
Transaction Sources (continued) ...................................................................................................................18-35
Agenda...........................................................................................................................................................18-36
Integration with Oracle Asset Tracking.........................................................................................................18-37
How Purchase Order Receipts Flow into Project-Related Transactions........................................................18-39
Importing Oracle Asset Tracking Cost ..........................................................................................................18-41
Summary........................................................................................................................................................18-42
Appendix B: Budgetary Controls and Budget Integration ..........................................................................19-1
Appendix B: Budgetary Controls and Budget Integration.............................................................................19-3
Objectives ......................................................................................................................................................19-4
Agenda...........................................................................................................................................................19-5
Overview of Budgetary Controls...................................................................................................................19-6
Budgetary Control Settings: Time Intervals ..................................................................................................19-7
Budgetary Control Settings: Control Levels..................................................................................................19-9
Example: Budgetary Control Rollup .............................................................................................................19-10
Entering Budget Amounts for Controlled Budgets........................................................................................19-11
Budget Definition Strategies..........................................................................................................................19-13
Transaction Processing with Controlled Budgets ..........................................................................................19-14
Overview of the Budgetary Control Process Flow ........................................................................................19-16
Viewing Budgetary Control Results ..............................................................................................................19-18
Maintaining Budgetary Control Balances......................................................................................................19-19
Budgetary Controls Cross Charge Restriction...............................................................................................19-20
Agenda...........................................................................................................................................................19-21
Overview of Budget Integration ....................................................................................................................19-22
Generating Accounting for Integrated Budgets .............................................................................................19-23
Accounting Event Model Overview ..............................................................................................................19-25
Budget Check Funds Processing Overview...................................................................................................19-28
Creating a Baseline for an Integrated Budget ................................................................................................19-30
Budget Integration Workflow........................................................................................................................19-32
Reviewing and Overriding Budget Account Details......................................................................................19-33
Viewing Encumbrance and Budget Subledger Accounting...........................................................................19-34
Agenda...........................................................................................................................................................19-35
Top-Down Budget Integration.......................................................................................................................19-36
Top-Down Budget Integration Procedures ....................................................................................................19-37
Encumbrance Accounting Example...............................................................................................................19-39
Creating Project Budgets for Top-Down Budget Integration ........................................................................19-42
Maintaining the Project Budget .....................................................................................................................19-43
Year-End Processing .....................................................................................................................................19-45

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

xi
 Agenda...........................................................................................................................................................19-46
Bottom-Up Budget Integration ......................................................................................................................19-47
Bottom-Up Budget Integration Procedures ...................................................................................................19-48
Agenda...........................................................................................................................................................19-50
Non-Integrated Budgets with Budgetary Controls Procedures......................................................................19-51
Agenda...........................................................................................................................................................19-52
Budgeting Implementation Steps...................................................................................................................19-53
Define Additional Core Budgeting Setup......................................................................................................19-54
Implementing Budgetary Controls ................................................................................................................19-55
Budgetary Controls: Enable Budgetary Controls and Encumbrance Accounting .........................................19-56
Budgetary Controls: Define Profile Options..................................................................................................19-57
Budgetary Controls: Define Control Levels and the Time Interval...............................................................19-58
Budgetary Controls: Create an Initial Budget................................................................................................19-60
Budgetary Controls: Adjust Default Control Levels .....................................................................................19-61
Implementing Budget Integration..................................................................................................................19-63
Budget Integration: Define the Project Budget Account Generation Workflow ...........................................19-64
Budget Integration: Define Profile Options...................................................................................................19-66
Budget Integration: Implement Top-Down Integration .................................................................................19-67
Budget Integration: Implement Bottom-Up Integration ................................................................................19-69
Practice - Create a Bottom-Up Integrated Budget .....................................................................................19-70
Solution - Create a Bottom-Up Integrated Budget.....................................................................................19-72
Guided Demonstration - Transfer Budget Journal Entries to GL ..............................................................19-81
Summary........................................................................................................................................................19-83
Summary of R12 Project Costing Fundamentals .........................................................................................20-1
Summary of R12 Project Costing Fundamentals...........................................................................................20-3
Objectives ......................................................................................................................................................20-4
Agenda...........................................................................................................................................................20-5
Defining Projects for Costing ........................................................................................................................20-6
Expenditures ..................................................................................................................................................20-7
Performing Cost Processing ..........................................................................................................................20-8
Accounting for Costs .....................................................................................................................................20-11
Burden Costing..............................................................................................................................................20-12
Integration with Oracle Purchasing and Oracle Payables..............................................................................20-13
Integration with Oracle Internet Expenses.....................................................................................................20-14
Integration with Oracle Time & Labor ..........................................................................................................20-15
Integration with Other Applications ..............................................................................................................20-16
Allocations and AutoAllocations...................................................................................................................20-17
Asset Capitalization.......................................................................................................................................20-18
Asset Capitalization: Capitalized Interest......................................................................................................20-19
Cross Charge .................................................................................................................................................20-20
Budgetary Controls and Budget Integration ..................................................................................................20-21
Agenda...........................................................................................................................................................20-22
Oracle Projects Fundamentals Learning Path ................................................................................................20-23
Summary........................................................................................................................................................20-24

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

xii
Preface
Profile
Before You Begin This Course

• Working experience with project management and project accounting

Prerequisites

• R12 eBusiness Essentials for Implementers

• R12 Project Foundation Fundamentals

How This Course Is Organized

This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations
and written practice sessions reinforce the concepts and skills introduced.

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

xiii
Related Publications
Oracle Publications
Title Part Number
Oracle Project Costing User Guide B25618-02
Oracle Projects Implementation Guide B25623-02
Oracle Projects Fundamentals B25617-02
Oracle Projects APIs, Client Extensions, and Open Interfaces B25624-02
Reference

Additional Publications

• System release bulletins

• Installation and user’s guides

• Read-me files

• International Oracle User’s Group (IOUG) articles

• Oracle Magazine

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

xiv
Typographic Conventions
Typographic Conventions in Text
Convention Element Example
Bold italic Glossary term (if The algorithm inserts the new key.
there is a glossary)
Caps and Buttons, Click the Executable button.
lowercase check boxes, Select the Can’t Delete Card check box.
triggers, Assign a When-Validate-Item trigger to the ORD block.
windows Open the Master Schedule window.
Courier new, Code output, Code output: debug.set (‘I”, 300);
case sensitive directory names, Directory: bin (DOS), $FMHOME (UNIX)
(default is filenames, Filename: Locate the init.ora file.
lowercase) passwords, Password: User tiger as your password.
pathnames, Pathname: Open c:\my_docs\projects
URLs, URL: Go to http://www.oracle.com
user input,
User input: Enter 300
usernames
Username: Log on as scott
Initial cap Graphics labels Customer address (but Oracle Payables)
(unless the term is a
proper noun)
Italic Emphasized words Do not save changes to the database.
and phrases, For further information, see Oracle7 Server SQL Language
titles of books and Reference Manual.
courses, Enter user_id@us.oracle.com, where user_id is the
variables name of the user.
Quotation Interface elements Select “Include a reusable module component” and click Finish.
marks with long names
that have only This subject is covered in Unit II, Lesson 3, “Working with
initial caps; Objects.”
lesson and chapter
titles in cross-
references
Uppercase SQL column Use the SELECT command to view information stored in the
names, commands, LAST_NAME
functions, schemas, column of the EMP table.
table names
Arrow Menu paths Select File > Save.
Brackets Key names Press [Enter].
Commas Key sequences Press and release keys one at a time:
[Alternate], [F], [D]
Plus signs Key combinations Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

xv
Typographic Conventions in Code
Convention Element Example
Caps and Oracle Forms When-Validate-Item
lowercase triggers
Lowercase Column names, SELECT last_name
table names FROM s_emp;

Passwords DROP USER scott

IDENTIFIED BY tiger;
PL/SQL objects OG_ACTIVATE_LAYER
(OG_GET_LAYER (‘prod_pie_layer’))

Lowercase Syntax variables CREATE ROLE role

italic
Uppercase SQL commands and SELECT userid
functions FROM emp;

Typographic Conventions in Oracle Application Navigation Paths

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

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

This simplified path translates to the following:

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

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

3. (B) Click the Approve button.

Notations:

(N) = Navigator

(M) = Menu

(T) = Tab

(B) = Button

(I) = Icon

(H) = Hyperlink

(ST) = Sub Tab

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

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

The following help navigation path, for example—

(Help) General Ledger > Journals > Enter Journals

—represents the following sequence of actions:

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

2. Under the General Ledger entry, expand Journals.

3. Under Journals, select Enter Journals.

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

Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

xvii
 Copyright © 2007, Oracle. All rights reserved.

R12 Project Costing Fundamentals Table of Contents

xviii
 Overview of Oracle Project
Costing
Chapter 1

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 2
Overview of Oracle Project Costing

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 5
Oracle Enterprise Project Management Solution

Oracle Enterprise Project Management Solution

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

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 6
Oracle Project Costing and Integration

Oracle Project Costing and Integration

Oracle Project Costing imports data from these applications:
• Oracle Asset Tracking - Oracle Asset Tracking enables you to provide users with access
to tracking information, without allowing them access to sensitive processes related to
assets and purchasing. You can also track inventory items after you have installed them
and link financial transactions to the physical movement of equipment. Oracle Asset
Tracking enables you to create assets upon receipt in Oracle Purchasing. After you create
the asset, Oracle Asset Tracking performs the changes in the background for any further
physical movement. For example, if you move the asset from one location to the other,
then Oracle Asset Tracking performs the asset cost, distribution, and unit changes without
manual intervention. Oracle Asset Tracking integrates with Oracle Inventory, Oracle
Purchasing, Oracle Project Costing, Oracle Assets, and Oracle Payables, and stores
information collected from them.
• Oracle Internet Expenses - Oracle Internet Expenses enables you to enter project-
related expense reports. Once approved, the expense reports are imported into Oracle
Payables. Oracle Payables creates invoices from the expense reports, maintains
payments, and creates subledger accounting entries. In Oracle Project Costing, expense
reports are interfaced as actual costs from Oracle Payables.
Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 7
 • Oracle Inventory - You can implement Oracle Inventory to Oracle Project Costing
integration, enabling you to interface costs from Oracle Inventory to Oracle Project
Costing, without installing Oracle Project Manufacturing. When you enter project–related
transactions in Oracle Inventory, you enter the project information on the source
transaction. Oracle Inventory and Oracle Project Costing carry the project information
through from the Issue To or Receipt From transaction in Oracle Inventory to the project
expenditure in Oracle Project Costing.
• Oracle iProcurement - You can enter project-related purchase requisitions using Oracle
iProcurement. After requisition approval, you can AutoCreate a purchase order in Oracle
Purchasing. Oracle Purchasing copies the project information to the purchase order.
• Oracle Payables - In Oracle Payables, you can match a supplier invoice to an existing
purchase order or receiving transaction. Oracle Payables automatically copies the project
information from the purchase order distribution lines when you perform the match. You
can also create non-matched supplier invoices in Oracle Payables and enter invoice
distributions to charge invoice costs to projects. You can use both Oracle Purchasing and
Oracle Payables, or just Oracle Payables. You can set up Oracle Payables to apply
discounts to payments. After you enter a payment with discounts, you interface the
discounts to Oracle Project Costing. Oracle Payables creates subledger accounting entries
for project-related supplier costs.
• Oracle Purchasing - When you enter project-related transactions in Oracle Purchasing,
you only need to enter project information on the source document; either the requisition
or the purchase order. The Account Generator automatically creates the account
information, based on the project-related information you enter. You can also use the
Buyer WorkCenter in Oracle Purchasing to enter project-related purchase orders. When a
purchase order shipment is flagged to accrue at receipt and the purchased goods are
delivered to an expense destination, you enter a receiving transaction for the purchase
order in Oracle Purchasing and create subledger accounting for the receiving transaction
in final mode. Next, you interface receipt accruals to Oracle Project Costing.
• Oracle Project Manufacturing - Oracle Project Costing acts as a cost repository for
manufacturing-related activities from other products in the Oracle Project Manufacturing
suite. Oracle Project Manufacturing is a type of manufacturing environment where large
projects drive production requirements. You define the Work Breakdown Structure for a
manufacturing project in Oracle Project Costing. You track manufacturing costs by
project and task and use Transaction Import to import them into Oracle Project Costing.
• Oracle Time & Labor - Oracle Time & Labor integrates with Oracle Project Costing to
enable employees and contingent workers to enter and submit project-related timecards.
Employees and contingent workers enter their own time, which you can subject to an
approval process according to your business rules. You can transfer approved timecards
to Oracle Project Costing, Oracle Payroll, and Oracle Human Resources. After you
import the timecards into Oracle Project Costing, you cost the timecards and derive the
default accounting using AutoAccounting. During cost processing, the raw cost and any
additional burden cost is calculated. Finally, you generate cost accounting events and
create accounting for the timecards in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 8
Oracle Project Costing and Integration

Oracle Project Costing and Integration

Oracle Project Costing sends data to these applications:
– Oracle Assets - Using asset capitalization functionality, you can define capital assets and
capture construction–in–process (CIP) and expense costs for assets you are creating.
When you are ready to place assets in service, you can generate asset lines from the CIP
costs and send the lines to Oracle Assets for posting as fixed assets. You can also define
retirement adjustment assets and capture cost of removal and proceeds of sale amounts
(collectively referred to as retirement costs, retirement work–in–process, or RWIP) for
assets you are retiring that are part of a group asset in Oracle Assets. When your
retirement activities are complete, you can generate asset lines for the RWIP amounts and
send the lines to Oracle Assets for posting as adjustments to the accumulated depreciation
accounts for the group asset that corresponds to each asset.
– Oracle General Ledger - Oracle Project Costing integrates with Oracle General Ledger
via Oracle Subledger Accounting so that you can update your general ledger with Oracle
Project Costing activity. You use Oracle Project Costing to collect project cost detail
transactions, and then to generate accounting events that Oracle Subledger Accounting
uses to create the accounting. Oracle Subledger Accounting transfers the final accounting
entries to Oracle General Ledger.
Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 9
 – Oracle Subledger Accounting - Oracle Subledger Accounting is an intermediate step
between each of the subledger applications and Oracle General Ledger. Oracle Subledger
Accounting stores a complete and balanced subledger journal entry in a common data
model. Oracle Project Costing uses AutoAccounting, or the Project Budget Account
Generation workflow for integrated budgets, to derive default accounts for transactions.
You submit concurrent programs in Oracle Project Costing to generate accounting events
and create accounting entries in Oracle Subledger Accounting. Oracle Project Costing
predefines setup in Oracle Subledger Accounting so that it accepts the default accounts
that Oracle Project Costing derives without change. Oracle Subledger Accounting
transfers the final accounting to Oracle General Ledger. If you define your own detailed
accounting rules in Oracle Subledger Accounting, then Oracle Subledger Accounting
overwrites default accounts, or individual segments of accounts, that Oracle Project
Costing derives using AutoAccounting.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 10
Agenda

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 11
Oracle Project Costing and Project Classes

Oracle Project Costing and Project Classes

You can use Oracle Project Costing to collect costs associated with all of your project
activities.
For example, you can use indirect projects to track costs associated with research and
development, non-billable sales proposal activities, or general overhead operational costs for
departments such as purchasing or human resources. Capital projects enable you to capture
construction-in-process (CIP) costs for assets you are creating. You can also use capital
projects to capture the cost of removal and proceeds of sale amounts (RWIP) for assets you are
retiring. You also can track costs associated with contract projects. In conjunction with Oracle
Project Billing, you can generate revenue and customer invoices for contract projects. This
enables you to report on both project costs and revenue.
For additional discussion regarding contract projects, see the course titled “R12 Project Billing
Fundamentals.”

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 12
Overview of Resources In Oracle Projects

Overview of Resources in Oracle Projects

Oracle Projects provides a centralized resource pool as part of the core foundation in which
employees and contingent workers are identified as resources. Each of the applications in the
Oracle Projects suite utilizes this resource pool differently:
• Oracle Project Costing: Collects project-related timecard and expense report costs for
resources. Provides resource cost controls and cross-charging for shared resources.
• Oracle Project Billing: Generates revenue and invoices by billing labor hours on a
project.
• Oracle Project Management: Creates a budget for labor costs to plan and manage the
financial performance of projects throughout the project lifecycle.
• Oracle Project Collaboration: Allows resources to participate as team members for
communicating progress against assigned tasks by directly accessing the published
workplan, and assigns actions to fellow team members so that the ownership and steps to
resolution are communicated clearly and consistently.
• Oracle Project Resource Management: Locates the appropriate resources to staff project
requirements based on competencies and availability. As a resource, you can also search
for requirements that match your particular skills.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 13
 Collecting Resource Costs
Resources can charge time to projects. For labor costs, you can:
• Associate each labor expenditure item with a scheduled work assignment and a work type.
• Maintain labor cost rate schedules by employee or by job.
• Calculate costs based on labor.
• Override labor cost rates for individuals.
• Define a method for calculating overtime cost.
• Maintain burden schedules to calculate additional costs of doing business that support the
raw costs.
• Report on actual resource utilization based on actual hours from timecards.
• Query expenditure items for specific resources.
Oracle Project Costing integrates with Oracle Time & Labor to capture project-related
timecards for resources.
Resources can also charge expenses to projects. Oracle Project Costing integrates with Oracle
Internet Expenses and Oracle Payables to capture project-related expense reports.
Note: Employees and contingent workers do not have to be scheduleable project resources to
charge time and expenses to projects. Optionally, you can use transaction controls to control
charges to tasks based on the resources assigned to the workplan tasks.
Cross Charge
When projects share resources within an enterprise, it is common to see those resources shared
across organization and country boundaries. Further, project managers can also divide the work
into multiple projects for easier execution and management. Oracle Project Costing provides
cross charge features to enable project managers to view the current total costs of the project,
regardless of who performs the work or where it is performed.
Project Allocations
You can use the allocations feature to distribute cost amounts between and within projects and
tasks, or to projects in other organizational units. You can select resources groups and
resources when you define allocation sources and proration basis methods.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 14
Costing Flow

Costing Flow
Oracle Project Costing enables you to track and account for all project costs. You can enter
transactions directly into Oracle Project Costing using expenditure batches, import transactions
from other Oracle Applications, such as Oracle Time & Labor, or import transactions from
external systems.
Costing Flow Example (Labor Cost)
1. Enter or import expenditures - You can enter pre-approved expenditure batches or
import transactions from other Oracle applications or external applications.
2. PRC: Distribute Labor Costs - Calculates the raw and burden cost amounts for labor cost
expenditure items and uses AutoAccounting to determine the default debit account for
each expenditure item.
3. PRC: Generate Cost Accounting Events - Uses AutoAccounting to determine the
default credit account for expenditure items and generates accounting events for
distributed transactions.
4. PRC: Create Accounting - Creates subledger journal entries for eligible accounting
events. You can run the program in either draft or final mode. Optionally, the program
can post journal entries in Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 15
 5. PRC: Transfer Journal Entries to GL - When you run the program PRC: Create
Accounting, if you select No for the parameter Transfer to GL, then you run must the
program PRC: Transfer Journal Entries to GL to send journal entries to Oracle General
Ledger.
6. Journal Import (in Oracle General Ledger - Imports the final accounting entries from
Oracle Subledger Accounting into Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 16
Collect and Manage All Costs

Collect and Manage All Costs

Oracle Project Costing is an integrated cost management solution for all projects and activities
within an enterprise. With Oracle Project Costing you can manage costs across currency and
organizational boundaries. Oracle Project Costing also acts as a central repository of project
transactions, processes project costs, and creates corresponding accounting.
Methods of Entering Expenditures
You can use pre-approved batches to enter expenditures directly into Oracle Project Costing
and Transaction Import to import expenditures into Oracle Project Costing from external
sources. In addition, you can use Microsoft Excel Integration to enter expenditures and then
import the expenditures into Oracle Project Costing. Oracle Project Costing also integrates
with other Oracle applications. You can collect project-related costs in applications such as
Oracle Time & Labor, Oracle Purchasing, Oracle Payables, Oracle iProcurement, Oracle
Inventory, Oracle Project Manufacturing, Oracle Asset Tracking, and Oracle Internet
Expenses.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 17
Manage Costs

Manage Costs
After you collect costs, you can perform adjustments as needed. You can also use features such
as cross charge, burdening, project allocations, and asset capitalization to further process the
costs. The adjustment functionality in Oracle Project Costing gives you control over your
project costs. You can adjust your project costs online, create accounting for the adjustments,
and provide a historical audit trail of all activities. You can perform a wide variety of
adjustments - including correcting approved expenditures, changing the capitalizable or
billable status of expenditure items, recalculating raw or burdened costs, splitting expenditure
items, and transferring expenditures to another project.
Cross Charge
A cross charge takes place when the expenditure organization of an expenditure item is
different from task owning organization of the task being charged. These organizations are
called the provider and receiver organizations. The organizations can be within the same
operating unit or belong to different operating units. You may perform additional cross charge
processing to pass costs or share revenues between the provider and receiver organizations.
This processing includes creating borrowed and lent accounting entries or generating
intercompany invoices.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 18
 Burdening
Burden costs are costs of doing business that support raw costs. For example, you can define a
burden cost code of G&A to burden specific raw costs with general and administrative
overhead costs. You can create subledger accounting for burden cost and post the accounting to
Oracle General Ledger.
Project Allocations
The allocations feature in Oracle Project Costing can distribute amounts between and within
projects and tasks, or to projects in other organizational units. For example, you can allocate
amounts such as salaries or administrative overhead across several projects and tasks.
Your allocations can be as simple or elaborate as you like. You identify the amounts you want
to allocate (source) and then define the targets, the projects and tasks to which you want to
allocate the source amounts. Optionally, you can offset the allocations with reversing
transactions. The system gathers source amounts into a source pool, and then allocates to the
targets using the basis method that you specify in the allocation rule. You can use a basis
method of Spread Evenly to divide the source pool amount equally among all the chargeable
target tasks included in the rule. Alternatively, you could select Prorate as the basis method to
use the attributes set in the Basis window.
When you allocate amounts, you create expenditure items whose amounts are derived from one
or more of the following sources:
• Existing summarized expenditure items in Oracle Project Costing
• A fixed amount
• Amounts in an Oracle General Ledger account balance
Asset Capitalization
Using asset capitalization functionality, you can define capital assets and capture construction–
in–process (CIP) and expense costs for assets you are creating. When you are ready to place
assets in service, you can generate asset lines from the CIP costs and send the lines to Oracle
Assets for posting as fixed assets. You use capital projects to capture the costs of capital assets
you are building, installing, or acquiring.
You can also define retirement adjustment assets and capture cost of removal and proceeds of
sale amounts (collectively referred to as retirement costs, retirement work–in–process, or
RWIP) for assets you are retiring that are part of a group asset in Oracle Assets. When your
retirement activities are complete, you can generate asset lines for the RWIP amounts and send
the lines to Oracle Assets for posting as adjustments to the accumulated depreciation accounts
for the group asset that corresponds to each asset.
You can also calculate and record capitalized interest for capital projects. Capitalized interest
(also referred to as Allowance for Funds Used During Construction) is an estimate of the
interest cost that enterprises incur when they invest in long–term capital projects. Subject to
accounting rules and regulatory guidelines, enterprises can capitalize interest as part of the total
cost of acquiring and constructing assets that require an extended amount of time to prepare for
their intended use.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 19
View Accounting: Transaction Details

View Accounting: Transaction Details

From Oracle General Ledger, you can drill down to subledger details from the Account
Inquiry, Enter Journals, or View Journals windows for journals that have specific journal
sources assigned to them. For example, you can select a labor cost journal entry line with the
source Projects and select the Line Drilldown button to view the details in Oracle Subledger
Accounting. Next you can choose to either view the subledger journal entry or to view the
transaction. When you choose to view the transaction, the system drills down to Oracle Project
Costing and queries the individual expenditure items that make up the subledger journal entry
in expenditure inquiry.
You can also perform inquiries directly in Oracle Subledger Accounting to view transaction
details for accounting events. When you view a transaction for a cost accounting event, Oracle
Subledger Accounting drills down to Oracle Project Costing and automatically opens and
queries information in expenditure inquiry. Similarly, you can drill down to other subledger
applications to view transaction information for the accounting events that originated in those
applications. In Oracle Subledger Accounting, you can query accounting events, journal
entries, and journal entry lines based on multiple selection criteria.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 20
View Accounting: Final Subledger Accounting Entries

View Accounting: Final Subledger Accounting Entries

You can use expenditure inquiry in Oracle Project Costing to view final subledger accounting
entries for expenditure items. Use the View Accounting option from the Tools menu to review
accounting entries. You must create accounting in final mode for the accounting events
associated with the expenditure item to view accounting entries.
Note: For both historical (prior to Release 12) expenditure items not migrated to Oracle
Subledger Accounting, and transactions accounted in an external system and interfaced into
Oracle Project Costing, the View Accounting option displays accounts from the cost
distributions table in Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 21
View Expenditure Item Details

View Expenditure Item Details

You can also use expenditure inquiry to view detailed information for each expenditure item.
Depending on the expenditure item, you can:
• View cost distribution line information for each expenditure item, including the default
accounting entries that Oracle Project Costing derived using AutoAccounting, the PA
and GL period, and the accounting event generation status.
• View the revenue distribution lines for billable expenditure items (contract projects).
• Drill down to Oracle Payables if the supplier cost expenditure item was interfaced to
Oracle Project Costing from Oracle Payables.
• Drill down to the Receipt Transaction Summary window in Oracle Purchasing for
receipt accrual expenditure items.
• Drill down to view purchase order details in Oracle Purchasing for contingent worker
labor cost expenditure items that are associated with a purchase order.

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 22
Summary

Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 23
 Copyright © 2007, Oracle. All rights reserved.

Overview of Oracle Project Costing

Chapter 1 - Page 24
 Defining Projects for Costing
Chapter 2

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 2
Defining Projects for Costing

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 5
Overview of Projects and Tasks

Overview of Projects and Tasks

You can create a project with one structure defined for workplan management purposes and
another defined for financial management purposes, or you can use one structure for both
purposes:
• Workplan Management
- The workplan management functionality helps project managers and team members
deliver projects on time.
• Financial Management
- Financial management functionality helps project and financial administrators and
managers track billing, costs, budgets, and other financial information for projects.
You can use three predefined project classes that track the following types of information:
• Indirect projects - Track overhead activities and costs.
• Capital projects - Track asset development activities and costs, and costs are capitalized
as one or more assets.
• Contract projects - Contract projects track cost, revenue, and billing.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 6
Project Classes and Project Types

Project Classes and Project Types

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

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 7
Overview of Project Templates

Overview of Project Templates

You use project templates to create new projects. When you create a project from a project
template or an existing project, Oracle Project Foundation copies the financial structure from
the source project or template. Project templates belong to only one operating unit. You can
maintain and copy project templates within an operating unit. However, project template
numbers are unique across operating units. A project template number cannot duplicate any
project or project template number within the installation. For additional information, see the
course titled "R12 Project Foundation Fundamentals."

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 8
Organizing a Project Structure

Organizing a Project Structure

A project financial structure is a task tree showing the organization of project work. It can be
as simple or detailed as you want it to be. There are no limits in width or levels. The position of
the task in the hierarchy determines what you can do with it:
• Top Task
- A task whose parent is the project.
- For example, use top tasks for budgeting and rollup reporting.
• Middle Task
- A task that is not a top task or a lowest task.
- For example, use middle tasks for rollup reporting.
• Lowest Task
- A task that is at the bottom of the structure, without any child tasks. A top task can
also be considered a lowest task, if the task does not have any child tasks.
- For example, use lowest tasks for transaction entry, budgeting, and override entry.
Expenditures are always charged to a lowest task.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 9
Basic Project Information

Basic Project Information

• Project Name - A short and descriptive name of a project. Use this name to find and
identify a project.
• Long Name - A longer, unique descriptive name for the project. It can be up to 240
characters long. The default value is the short name (Name).
• Project Number- A unique identification number of a project. You use this number to
find and identify the project. You can manually enter a project number, or let the system
automatically generate one for you. For audit trail purposes, you cannot modify a project
number after you charge expenditure items, requisitions, purchase orders, or supplier
invoices to the project. If project numbering is automatic, then you cannot modify the
number at any point.
• Project Organization - The managing or owning organization of a project. Use the
organization for reporting and AutoAccounting purposes.
• Project Type - The project type determines how Oracle Project Costing processes costs
(expenditure items) for a project and provides defaults and controls for project entry and
processing. For audit trail purposes, you cannot change a project type after you charge
expenditure items, requisitions, purchase orders, or supplier invoices to the project.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 10
 • Project Status - Indicates the current status of a project.
• Description - A description of the project.
• Public Sector - Use the Public Sector check box to indicate whether a project is a private
or public sector project. Use this for reporting and AutoAccounting purposes.
• Access Level - Access levels control who can search for and view a project. You can
specify one of the following access level values for a project:
- Secured
- Enterprise
• Location - Use project location information to match resource location to work site
location (the location of the project). Location includes three attributes:
- City
- Region
- Country

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 11
Agenda

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 12
Burden Schedules for Costing

Burden Schedules for Costing

Costing Burden Schedules
The default costing burden schedule for a project comes from its project type. You can enter
the following information in the Costing Burden Schedules window:
• Burden Schedule
- Enter the burden schedule you want to use for this project or task.
• Burden Hierarchy
- Enter the burden hierarchy you want to default to each burden schedule version.
• Fixed Date
- Enter a fixed date for the burden schedule if you want all expenditure items to be
burdened with the multipliers in effect as of that date.
For additional discussion regarding burden schedules, see the lesson titled “Implementing
Burden Costing.”

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 13
Organization Overrides

Organization Overrides
You can reassign an employee’s or an entire organization’s costs and revenue to a different
organization for a particular project. When you enter an organization distribution override, the
new organization you enter overrides the expenditure organization Oracle Project Costing uses
in AutoAccounting and in burdening. For AutoAccounting processing, if an organization
distribution override exists, the destination organization of the override is substituted for the
actual expenditure organization. You can enter the following information in the Organization
Overrides window:
• Source Organization - Enter the source organization whose costs and revenue you want
to assign to a different organization.
• Employee Name/Number - Enter the name and number of the employee for this project
whose costs and revenue you want to assign to a different organization.
• Expenditure Category - The expenditure category for the costs you want to assign to a
different organization.
• Destination Organization - The new organization to which you want to reassign costs
and revenue.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 14
Project Currency

Project Currency
You define a project currency for each project. This currency can differ from the functional
currency of the operating unit that owns the project. You can select any active currency defined
in Oracle General Ledger.
In a multinational business environment, employees from locations across the world can report
to one operating unit. Therefore, an operating unit can own projects being managed and
implemented from various remote sites. The project managers of these projects need the ability
to report project costs and revenues in the local currencies of the countries where the work is
being performed. To accomplish this, you have the ability to define a project currency that
differs from the functional currency of the operating unit owning the project.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 15
Currencies and Expenditures

Currencies and Expenditures

Transaction amounts are stored in the following currencies:
• Transaction Currency
- The currency in which a project transaction occurs.
• Expenditure Functional Currency
- The functional currency of the expenditure operating unit.
• Project Functional Currency
- The functional currency of the operating unit that owns the project.
• Project Currency
- The user–defined project currency.
When you enter transactions in a currency that is different from functional currency or project
currency, Oracle Project Costing must convert the transaction amount to the functional and
project currencies. To convert transaction currencies, Oracle Project Costing must first
determine the exchange rate type and exchange rate date.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 16
Costing Currency Options

Costing Currency Options

When you create a new project, the system copies the default value for the project currency
code from the functional currency defined in the Implementation Options for the project-
owning operating unit. You can override the default currency code and enter default
conversion attributes for the project in the Costing tab of the Currency window. Oracle Project
Costing displays the attributes you select as the default values during expenditure entry, and
also uses the values for imported transactions.
Project Currency Attribute Hierarchy
To convert transaction currencies to functional and project currencies, Oracle Project Costing
must first determine the exchange rate type and exchange rate date. Each attribute is
determined separately. If Oracle Project Costing finds a rate type in step one, but no rate date is
present at that level, then it uses the rate type and then follows the logic to the next level to
determine the rate date. During project and task setup, Oracle Project Costing copies the values
you enter to all the underlying tasks in the financial structure.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 17
Practice - Create a Project
Overview
In this practice, you will create a new project from an existing template and change the project
currency to EUR.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Create a Project

Copy the Capital Services Template to create a new project with the values as specified in the
following table:

Field Value
Project Number XXCS
Project Name XX Capital Services
Project Manager Gray, Mr. Donald R.
Organization Services-East
Project Start Date Today's Date
Project Finish Date Two Years from Today

Change the Project Currency

Your project is based in Paris. Change the project currency to EUR and select Corporate as the
rate type to convert to project functional currency and to project currency.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 18
Solution - Create a Project
Create a Project

1. Login to Oracle Applications:

− Username = SERVICES
− Password = WELCOME

2. Responsibility = Projects, Vision Services (USA)

3. Navigate to the Find Projects window.

• (N) Projects

4. Find the Capital Services Template.

• Enter the find criteria:

− Name = Capital Services Template

• (B) Find

5. Select the Capital Services Template on the Projects, Templates Summary window.

6. (B) Copy To...

7. Complete the fields on the Project Quick Entry window as specified in the following table:

Field Value
Project Number XXCS
Project Name XX Capital Services
Project Manager Gray, Mr. Donald R.
Organization Services-East
Project Start Date Today's Date
Project Finish Date Two Years from Today

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 19
8. (B) OK

9. Revise the project description.

Change the Project Currency

10. Select your new XXCS project.

11. (B) Open

12. Select the Currency option.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 20
13. (B) Detail

14. Complete the fields on the Currency window as specified in the following table:

Field Value
Project Currency EUR
Conversion Attributes to Project Corporate
Functional Currency - Rate Type
Conversion Attributes to Project Corporate
Currency - Rate Type

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 21
15. (I) Save

16. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 22
Agenda

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 23
Controlling Expenditures Overview

Controlling Expenditures Overview

Oracle Project Costing provides you with many levels of charge controls:
• Project Status - You can use the project status to control whether any charges are allowed
for the project.
• Task Chargeable Status - You can specify a lowest task as chargeable or non–chargeable
to control whether any charges are allowed for the task.
• Transaction Dates -You can specify the transaction dates of a lowest task to record the
date range for which charges are allowed for the task. You can also specify transaction
dates at the project-level.
• Transaction Controls - You can define transaction controls to specify the types of
transactions that are chargeable or non–chargeable for the project and tasks.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 24
Project Statuses

Project Statuses
When you define a status, the Status Controls region contains a list of actions that are allowed
or restricted for each status. To allow charges on a project, you must assign the project a status
with the status control Create New Transactions enabled. To allow users to adjust transaction
on a project, you must assign the project a status with the status control Adjust Transactions
enabled. For additional discussion regarding defining project statuses, see the course titled
“R12 Project Foundation Fundamentals.”
Note: The Create New Transactions status control only affects new transactions. It does not
prevent reversals that Oracle Project Costing creates when you adjust transactions. In addition,
it does not prevent you from splitting transactions. For example, if you change the project
status to a status that does not allow new transactions and transfer an existing expenditure item
to another project, then Oracle Project Costing still creates the reversing expenditure item on
the original project and task.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 25
Task Chargeable Status

Task Chargeable Status

The Allow Charges check box controls whether or not you can charge new expenditure items
to a task. The default setting is to allow charges for all new tasks. Disable the Allow Charges
check box if you want to prevent new charges to a task.
Note: This task-level control only affects new transactions. It does not prevent reversals. For
example, if you disable the option for a task and transfer an existing expenditure item from that
task to a new task, then Oracle Project Costing still creates the reversing expenditure item on
the original task.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 26
Transaction Dates

Transaction Dates
Project Transaction Dates
The transaction start date and finish date control which transactions you can charge to the
project. You cannot charge an expenditure item to a project if the expenditure item date falls
outside the project-level transaction dates. You must enter a start date to enter a finish date.
Task Transaction Dates
Task transaction dates must be within the corresponding project dates and within the dates of
the parent task. The transaction start and finish dates control the transactions that can be
charged to the task. You cannot charge an expenditure item to a task if the expenditure item
date falls outside the task dates. Default values for task transaction dates are the project
transaction dates (for top tasks) or the parent task’s transaction dates (for subtasks).

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 27
Transaction Controls

Transaction Controls
Use transaction controls to configure your projects and tasks to allow only charges that you
expect or plan. You can also define which items are billable and non-billable on your contract
projects. For capital projects, you can define which items are capitalizable and non-
capitalizable. This proactive means to control charges to projects enables you to better manage
your projects. You enter transaction controls in the Project Options and Task Options windows.
You must specify either an employee or an expenditure category for each record. You can
specify a non-labor resource for usage expenditure types.
Employee Transaction Controls
Transaction controls that you define for people (employees and contingent workers) do not
apply to transactions that are not associated with people. This includes supplier cost
transactions entered for a supplier not associated with a person, and usage items incurred by an
organization and not a person. If you define transaction controls to list people who can charge
to your project, then Oracle Project Costing allows transactions incurred by those people. It
also allows any supplier cost transactions and usage items incurred by an organization, and any
other transactions that do not require an employee number.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 28
 When you enter expense reports in Oracle Payables using suppliers associated with employees,
Oracle Project Costing validates the transaction using the person associated with the supplier.
For example, if you specify that Donald Gray cannot charge to the project, and you enter an
expense report item for the supplier GRAY, DONALD who is associated with the person
Donald Gray, Oracle Project Costing does not allow you to charge the item to the project,
because it validates the transaction controls that you have defined.
Scheduled Expenditures Only Controls
When Oracle Project Resource Management is installed, you can specify that only employees
with scheduled work assignments are allowed to charge labor and expense report transactions.
Specifying Billable and Capitalizable Transactions
You can control what transactions for contract projects are non-billable and what transactions
for capital projects are non-capitalizable when you set the Billable/Capitalizable field. You can
choose between the options of No or Task Level. Select No if you want the charges to be non-
billable or non-capitalizable. Select Task Level if you want the billable or capitalizable status to
default from the task to which the item is charged.
Workplan Resources Only Controls
You can control charges to tasks based on the people assigned to the workplan tasks. For
information about the validation rules for timecards and expense reports when the Workplan
Resources Only control is set with the other transaction control attributes, see the Oracle
Project Costing User Guide.
Person Type Control
You can select no value, Employee Only, or Contractor Only from the list in the Person Type
field. You can use this control to specify whether transactions incurred by only employees,
only contractors (contingent workers), or both are chargeable. For additional information, see
the Oracle Project Costing User Guide.
Specifying Effective Dates for Transaction Controls
You can enter an Effective From and Effective To date for each transaction control record to
define transactions as chargeable for a given date range. You must specify an Effective From
date. The default Effective From date is the start date of the project or task. The Effective To
date is optional.
Validating Expenditures Against Transaction Controls
Oracle Project Costing checks all levels of transaction controls when you try to charge a
transaction to a project. Oracle Project Costing checks the control when you:
• Enter an online or pre-approved expenditure item
• Copy a pre-approved timecard item
• Transfer an expenditure item to a new project or task
• Enter a project-related requisition or purchase order distribution in Oracle Purchasing
• Enter a project-related requisition distribution in Oracle iProcurement
• Enter a project-related invoice distribution in Oracle Payables
• Enter a project-related expense report in Oracle Internet Expenses
• Run the concurrent program PRC: Transaction Import to import expenditures

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 29
Exclusive and Inclusive Transaction Controls

Exclusive and Inclusive Transaction Controls

Exclusive Transaction Controls
Exclusive transaction controls allow all expenditures except those that are specified as non–
chargeable in the transaction controls. Exclusive transaction controls is the default setting.
When you use exclusive transaction controls, you specify the non-chargeable criteria. Disable
the Limit to check box on the Transaction Controls window to make your transaction controls
exclusive.
Inclusive Transaction Controls
Inclusive transaction controls limit charges to only those expenditures that meet the specified
transaction control criteria. Oracle Project Costing rejects any expenditure that are not listed as
chargeable in the transaction controls. When you use inclusive transaction controls, by default,
nothing is chargeable. You must specify the chargeable criteria. Enable the Limit to check box
on the Transaction Controls window to make your transaction controls inclusive.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 30
Allowable Charges for Each Transaction Control

Allowable Charges for Each Transaction Control

You can use transaction controls to specify whether to allow charges, further controlling the
allowable charges. You usually select Chargeable when you use inclusive transaction controls.
Transaction Control Extension
To define more complex rules for implementing company-specific expenditure entry policies,
you can use the transaction control extension. Some examples of rules that you may define are:
• You cannot charge new transactions to projects for which the work is complete. You can
only transfer items to these projects.
• All entertainment expenses are non-billable.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 31
Determining if an Item is Chargeable

Determining if an Item is Chargeable

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

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 32
Practice - Define Transaction Controls
Overview
In this practice, you will define exclusive transaction controls at the project level for the project
you created in a previous practice.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define Exclusive Transaction Controls at the Project Level

Define exclusive transaction controls for you XX Capital Services project to prohibit people
from charging meals and telephone expenses to your project. As an exception, permit Emily
Heather to charge telephone expenses. Let the task details determine whether her telephone
expenses are capitalizable or not. When you are done, approve the project.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 33
Solution - Define Transaction Controls
Define Exclusive Transaction Controls at the Project Level

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Projects window.

• (N) Projects

3. Find your new capital services project.

• Enter the find criteria:

− Number = XXCS
− Name = XX Capital Services

• (B) Find

4. Select the XX Capital Services project on the Projects, Templates Summary window.

5. (B) Open

6. In the Options region, select Transaction Controls.

7. (B) Detail

8. Do not enable the Limit To Transaction Controls check box.

This approach creates exclusive transaction controls. By default, everything is chargeable.

9. Enter the transaction control lines as specified in the following table:

Expenditure Expenditure Employee Chargeable Capitalizable

Category Type
Expenses Meals No No
Expense Telephone No No
Expenses Telephone Heather, Yes (enable) Task Level
Ms. Emily

Everything is chargeable, except for meals and telephone expenses. The exception is that Emily
Heather can charge her telephone expenses.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 34
10. (I) Save

11. Close the Transaction Controls window.

12. Approve the project.

• (B) Change Status

• Select Approved.

• (B) OK

• (I) Save

13. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 35
Summary

Copyright © 2007, Oracle. All rights reserved.

Defining Projects for Costing

Chapter 2 - Page 36
 Entering Expenditures
Chapter 3

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 2
Entering Expenditures

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 5
Costing Flow: Enter Expenditures

Costing Flow: Enter Expenditures

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

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 6
Expenditures Overview

Expenditures Overview
An expenditure is a group of expenditure items, or transactions, that an employee or an
organization incurs for an expenditure period. You charge expenditures to a project to record
actual work performed or cost incurred. Oracle Project Costing uses these terms for
expenditures:
• Expenditure batch
- A user-defined name used to track a batch of pre-approved expenditures, such as
timecards and expense reports.
- You can enter the following classes of pre-approved expenditure batches in Oracle
Project Costing: Timecards, Usages, Miscellaneous Transaction, Inventory, Work in
Process, and Burden Transaction.
• Expenditure
- A group of expenditure items incurred by an employee or organization for an
expenditure period.
• Expenditure item
- The individual transactions charged to a specific project and task combination.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 7
Multiple Organization Access Control (MOAC)

Multiple Organization Access Control

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

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 8
Expenditures Overview

Expenditures Overview
You enter:
• Expenditure Item Date - The date on which work is performed or a cost is incurred and
is charged to a project and task.
• Project Number - A unit of work that requires resources to produce measurable results. A
project can be broken down into one or more tasks. You can charge costs to a project.
• Task Number - A subdivision of project work. You can charge costs to lowest-level
tasks.
• Assignment Name - When Oracle Project Resource Management is installed, you can
associate labor and expense report expenditures to scheduled work assignments.
• Work Type - A classification of work. You use work types to classify both actual and
scheduled work. You can also use work types to classify work to determine the billability
of expenditure items, classify cross charge amounts into cost, and revenue for cross-
charged work, and assign attributes for utilization reporting. Work types roll up to
resource and organization utilization categories. This field is required when the PA:
Require Work Type Entry for Expenditures profile option has a value of Yes.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 9
 • Expenditure Type - A classification of cost that you assign to each expenditure item. You
can choose any expenditure type within the expenditure type class that you select for the
expenditure batch.
• Non-Labor Resource and Non-Labor Organization - If the expenditure type class for
the batch is Usages, enter the non-labor resource and its owning organization. This enables
you to track use of company-owned assets.
• Currency Fields - You can optionally display and enter the currency fields. You can use
folder tools to display to display currency fields. When your cursor is positioned in the
Expenditure Items regions of the Expenditures window, select Show Field from the Folder
menu and then select the field that you want to display.
• Quantity - The quantity of units. The expenditure type determines the unit of measure.
For example, on a timecard, you enter the quantity for professional labor in hours.
• Comment - Optionally, enter a free text Comment.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 10
Currency Fields for Expenditures

Currency Fields for Expenditures

The currency fields include:
• Functional Currency - The functional currency of the expenditure operating unit.
• Project Currency - The common currency into which all transactions for a particular
project are converted.
• Transaction Currency - The currency in which a cost transaction is incurred.
Note: You must use folder tools to display additional currency fields.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 11
Pre-Approved Batch Expenditure Entry Flow Overview

Pre-Approved Batch Expenditure Entry Flow Overview

To enter a pre-approved expenditure batch:
1. Enter batch-level information.
2. Enter an expenditure.
3. Enter expenditure items.
4. Enter additional expenditures and expenditure items as needed.
5. Submit the batch for review.
6. As needed, rework the batch.
7. Release the batch for processing.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 12
Statuses for Pre-Approved Expenditure Batches

Statuses for Pre-Approved Expenditure Batches

Pre-approved expenditure batches can have one of three statuses:
• Working - The expenditure batch is not ready for review. You can enter transactions and
modify their expenditures and expenditure items.
• Submitted - The batch is awaiting review. You can return the batch to Working status
(rework) to make corrections.
• Released - The expenditure batch is released for cost distribution. You can reverse
incorrectly entered expenditure items within the batch.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 13
Enter Pre-Approved Batches

Enter Pre-Approved Batches

1. Navigate to the Expenditure Batches window.
2. Select the operating unit the operating unit that incurred the cost.
3. Enter a unique batch name to identify this set of expenditures.
4. Enter the expenditure ending date for the batch. If you enter a date that is not the last day
of an expenditure week, the system automatically updates the date to the next valid week
ending date.
5. Choose the expenditure type class for this batch.
6. Optionally, enter a description.
7. Optionally, enable the Reverse Expenditures in a Future Period check box to
automatically reverse the batch. The expenditure type class must be Miscellaneous
Transaction to create an automatically reversing expenditure batch. For more information
regarding this feature, see the section in this lesson titled “Automatically Reversing
Expenditure Batches.”

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 14
 8. Optionally, enter a control total and control count in the Amounts region. Use the
Running Totals and Counts and the Difference columns to verify actual versus entered
totals.
9. Select the Expenditures button to enter the batch. The status of a new batch is always
Working.
10. In the Expenditures window, enter the employee or organization that incurred the cost.
11. Optionally enter the total units of measure in the Control Total field. When you have
entered all the expenditure items, you can compare the Control Total with the Running
Total, to verify your entries.
12. Enter the expenditure items in the Expenditure Items region.
13. When you have completed the expenditure batch, submit the batch for review.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 15
Submitting an Expenditure Batch

Submitting an Expenditure Batch

Verifying Control Totals and Control Counts
Oracle Project Costing verifies control totals and control counts when you submit a batch. If
the running total or running count does not equal your control totals, then you cannot submit
the expenditure batch until your totals match. If you do not enter control totals, then Oracle
Project Costing does not validate control totals.
Reviewing and Releasing Expenditure Batches
Releasing a batch is a second level of review after entry. You can use function security to
remove the release capability from the entry person’s Oracle Project Costing responsibility.
You can edit expenditure batches before release. The status must be Working to make changes.
Release makes expenditures ready for cost distribution. Release is synonymous with Approval.
Releasing a batch automatically releases all the expenditures and expenditure items in the
batch.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 16
Practice - Enter an Expenditure Batch
Overview
In this practice, you will enter, submit, and release a timecard expenditure batch.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Enter the Batch Information

Enter a timecard expenditure batch for the current week. Enter the header information as
specified in the following table:

Field Value
Operating Unit Vision Services
Batch Name XXBATCH
Ending Date This Sunday's Date
Class Timecards
Description Timecards
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Option Not Available
Control Totals 40
Control Count 2

Note: For all expenditure items in this batch, use Unscheduled as the Assignment Name and
Internal - capital as the Work Type.

Enter the First Expenditure

Enter expenditure items for Amy Marlin as specified in the following table:

Expnd Item Project Number Task Expnd Type Quantity Comment

Date Number
Today's Date XXCS 1.1 Clerical 10 Review
Tomorrow's Date XXCS 1.2 Design 10 Documentation

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 17
Enter the Second Expenditure

Enter expenditure items for Ann Hamilton as specified in the following table:

Expnd Item Project Number Task Expnd Type Quantity Comment

Date Number
Today's Date XXCS 3.0 Supervision 10 Project
management
Tomorrow's Date XXCS 3.0 Supervision 10 Project
management

Submit and Release the Batch

After you verify your control totals, submit and release the batch.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 18
Solution - Enter an Expenditure Batch
Enter the Batch Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Expenditure Batches window.

• (N) Expenditures > Pre Approved Batches > Enter

3. Enter the batch information as specified in the following table:

Field Value
Operating Unit Vision Services
Batch Name XXBATCH
Ending Date This Sunday's Date
Class Timecards
Description Timecards
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Option Not Available
Control Totals 40
Control Count 2

4. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 19
5. (B) Expenditures

Enter the First Expenditure

6. Enter the first expenditure as specified in the following table:

Employee Name Employee Organization Expnd Ending

Number Date
Marlin, Ms. Amy 34 Services-East This Sunday's Date

7. Enter the expenditure items for Amy Marlin as specified in the following table:

Expnd Item Project Number Task Expnd Type Quantity Comment

Date Number
Today's Date XXCS 1.1 Clerical 10 Review
Tomorrow's Date XXCS 1.2 Design 10 Documentation

For all expenditure items:

− Assignment Name = Unscheduled
− Work Type = Internal - capital
− UOM = Hours

8. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 20
Enter the Second Expenditure

9. Position your cursor in the row under where you entered Amy Marlin's name.

10. Enter the second expenditure as specified in the following table:

Employee Name Employee Organization Expnd Ending Control Total

Number Date
Hamilton, Ms. Anne 37 Services-East This Sunday's Date 20

11. (I) Save

12. Enter the expenditure items for Anne Hamilton as specified in the following table:

Expnd Item Project Number Task Expnd Type Quantity Comment

Date Number
Today's Date XXCS 3.0 Supervision 10 Project
management
Tomorrow's Date XXCS 3.0 Supervision 10 Project
management

For all expenditure items:

− Assignment Name = Unscheduled
− Work Type = Internal-Overhead
− UOM = Hours

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 21
13. (I) Save

Submit and Release the Batch

14. Close the Expenditures window and return to the Expenditure Batches window.

15. Verify that the control totals match the running totals. If the totals do not match, then return
to the Expenditures window and revise the expenditure items as needed.

16. (B) Submit

17. (B) Release

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 22
18. Close the Expenditure Batches window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 23
Reversing an Expenditure Batch

Reversing an Expenditure Batch

The Reverse button is enabled only if the current batch is released. You can reverse imported
expenditure batches only if the transaction source of the batch allows reversals. When you
reverse an expenditure batch, Oracle Project Costing reverses all the expenditure items except
for:
• Related items
• Expenditure items that are already reversed
• Reversing items (net zero adjusted items)
• Expenditure items created as a result of a transfer adjustment

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 24
Correcting Expenditure Batches

Correcting Expenditure Batches

After you submit a batch, you can rework the batch to add, delete, and revise expenditures and
expenditure items. You also must correct a batch if your supervisor rejects and returns a
submitted batch to you. If the batch has a status of Submitted, locate the batch, click the
Rework button to return its status to Working, and change the expenditure or expenditure item
before resubmitting the batch.
If the batch has a status of Released, you can correct individual expenditure items by reversing
the full amount of the original item and then entering the correct information. For example, if
you entered six hours on a timecard expenditure item when the correct number of hours is four,
then you can create a reversing item equal to a negative six hours and add a new expenditure
item of four hours.
To correct a released expenditure item:
1. Create a new batch for the correction items.
- The Expenditure Ending date must match the week that includes the expenditure item
you are reversing.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 25
 - Optionally check the All Negative Transactions Entered As Unmatched check box if
you want to enter transactions with negative amounts and do not want Oracle Project
Costing to search for corresponding existing transactions.
2. In the Expenditure Items window, select the Reverse Original button.
- Instead of choosing the Reverse Original button, you can enter a negative amount in
the Quantity field. Precede negative amounts with a minus (–) sign. If the All
Negative Transactions Entered as Unmatched check box is not enabled, then Oracle
Project Costing searches for a matching expenditure item and alerts you if it is unable
to find a match.
3. In the Reverse Expenditure Items window, specify the items that you want to reverse.
4. Select the Reversal button.
- Oracle Project Costing inserts a reversing (negative) expenditure item into the batch.
5. Finish entering the batch and submit the batch as usual.
- Expenditure batches can contain both positive and negative expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 26
Copying an Expenditure Batch

Copying an Expenditure Batch

If you frequently enter similar groups of expenditures, you can copy data from one week to the
next. The Copy function copies all expenditures and, optionally, all expenditure items from a
specified source batch. You need to revise only the items that are different in the new batch.
Copying your expenditure batches can reduce your manual data entry requirements when you
enter similar groups of expenditures.
Note: You cannot copy expenditure items from a reversed expenditure batch.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 27
Reviewing Project Expenditures

Reviewing Project Expenditures

Two expenditure inquiry modes are available in Oracle Project Costing:
• Project - You can view expenditure items for a single project across operating units. If
your system uses project security, then you can select only projects that you are allowed to
see. The expenditure items that you view can cross operating units, but you must have
security access to an operating unit to view those expenditure items. For example, a
project has expenditure items associated with operating units A, B, C, and D. If your
responsibility only gives you access to operating units B and C, then you can view and
adjust only the expenditure items from operating units B and C.
• All - You can view expenditure items across projects and structure your query to retrieve
information across projects within a single operating unit. If you have access to more than
one operating unit, then you must select the operating unit that you want to query. If you
have access to only one operating unit, then that operating is the default value. No project
security is enforced. Oracle Project Costing shows only the expenditure items that
correspond to the current operating unit. If a project has expenditure items that are
charged across operating units, then you cannot view these expenditure items. In this case,
use the Find Project Expenditure Items window to query these expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 28
Reviewing Project Expenditures

Reviewing Project Expenditures

To view expenditure items (perform an expenditure inquiry):
1. Navigate to the Find Project Expenditure Items or Find Expenditure Items window.
2. Enter your search criteria. You can enter search criteria for a large number of attributes
and on multiple tabs at the same time to limit the results of the query.
• Note: For a detailed discussion of the available search criteria, see the Oracle
Project Costing User Guide.
3. Choose Find to execute the search, or choose Mass Adjust to process mass adjustment of
expenditures. For information about mass adjustments, see the lesson titled "Performing
Cost Adjustments."
4. From the Expenditure Items window, you can:
• Select the Run Request button and then select which set of predefined programs to
run.
• Select the Totals button to view the totals for the expenditure items returned based
on your search criteria.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 29
 • Note: This window does not display events. If your project uses event-based or cost-
to-cost revenue accrual or invoice generation, use the Events window to view the
total project revenue and bill amounts.
• Select the Item Details button to review the details of this expenditure item. You can
then choose one of the following options:
- Cost Distribution Lines - View individual transactions and the default debit and
credit GL accounts for each expenditure item that Oracle Project Costing derived
using AutoAccounting. You can also view other information about the cost
distribution lines, such as PA and GL period, accounting event generation status,
and the rejection reason if the generation of the accounting event was not
successful. The Cost Distribution Lines window does not display the credit
account for supplier invoice expenditure items interfaced from Oracle Payables.
- Revenue Distribution Lines - View the revenue transactions generated for a
specific expenditure item. The window displays the default revenue account that
Oracle Project Billing derived using AutoAccounting. You can also see the GL
and PA posting period for the revenue, accounting event generation status, and
the rejection reason if the generation of the accounting event was not successful.
- AP Invoice - Drill down to the Invoice Overview window in Oracle Payables. If
the invoice is matched to a purchase order, then you can drill down to the
purchase order from the Invoice Workbench. This option is enabled for
expenditure items whose expenditure type class is either Supplier Invoices or
Expense Reports.
- PO Receipt -- Drill down to the Receipt Transaction Summary window in
Oracle Purchasing. You can also drill down to the related purchase order from
the Receipt Transaction Summary window. This option is enabled for
expenditure items for receipt accrual transactions in Oracle Purchasing.
- Purchase Order Details - Drill down to the purchase order details for
contingent worker labor costs. This option is enabled for expenditure items for
contingent worker labor costs that are associated with a purchase order.
• Important: If you define your own detailed accounting rules in Oracle Subledger
Accounting, then Oracle Subledger Accounting overwrites default accounts, or
individual segments of accounts, that Oracle Project Costing derives using
AutoAccounting. In this case, the default accounts displayed on the Cost
Distribution Lines and Revenue Distribution Lines windows may not be the same as
final accounts that Oracle Subledger Accounting transfers to Oracle General Ledger.
To view the final subledger accounting, use the View Accounting option from the
Tools menu.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 30
Viewing Accounting Lines

Viewing Accounting Lines

You can use the View Accounting option from the Tools menu to review accounting entries for
expenditure items. You must create accounting in final mode for the accounting events
associated with the expenditure item to view accounting entries. If an expenditure item has
multiple cost distribution lines, then you can view accounting for each cost distribution line
that is accounted in Oracle Subledger Accounting. Similarly, if you adjust an expenditure item
and do not create accounting for the adjustments in Oracle Subledger Accounting, then the
View Accounting window only shows the accounted cost distribution lines. If you create
accounting in draft mode, then you can either review the output from the create accounting
program or use Subledger Accounting Inquiry to view the draft accounting.
Note: The View Expenditure Accounting window displays final accounting entries from
Oracle Subledger Accounting. It does not display default accounts that Oracle Project Costing
derives using AutoAccounting.
Note: For both historical (prior to Release 12) expenditure items not migrated to Oracle
Subledger Accounting, and transactions accounted in an external system and interfaced into
Oracle Project Costing, the View Accounting option displays accounts from the cost
distributions table in Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 31
Practice - Use Expenditure Inquiry
Overview
In this practice, you will use expenditure inquiry to view the cost distribution lines and
accounting information for expenditure items.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Review Expenditure Items for Your Project

Use Expenditure Inquiry (Project) to review the expenditure items that you charged to your XX
Capital Services project. Note that the expenditure items have no cost because you have not run
costing programs for your project.

Review Straight Time Costs for Amy Marlin

Use Expenditure Inquiry (All) to perform a second query to review all straight time that Amy
Marlin has charged since the beginning of January of 2006. Perform the query for the Vision
Services operating unit. Determine the total burdened cost for Amy's time over this period of
time.

Note the total project functional burdened cost in the total field at the bottom of the window:
_______________

View Accounting for an Expenditure item

View the cost distribution lines, accounting, and T-accounts for one of the expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 32
Solution - Use Expenditure Inquiry
Review Expenditure Items for Your Project

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

3. Query all expenditure items for your XX Capital Services Project

• Enter the find criteria:

− Project Number = XXCS
− Project Name = XX Capital Services

• (B) Find

4. Review the expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 33
 Note that the expenditure items have no cost because you have not run costing programs for
your project.

5. Close the open windows and return to the navigator.

Review Straight Time Costs for Amy Marlin

6. Navigate to the Find Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > All

7. For the Vision Services operating unit, query all straight time labor that Amy Marlin
charged since January 2006.

• Enter the header find criteria:

− Operating Unit = Vision Services
− Expend Typ Class = Straight Time
− Item Dates (from) = 01-JAN-2006

• (T) Resource

• Enter resource find criteria:

− Employee Number = 34
− Employee Name = Marlin, Ms. Amy

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 34
 • (B) Find

8. Review the total labor cost.

• (B) Totals

• Scroll to find the column named Proj Func Burdened Cost.

• Note the total project functional burdened cost in the total field at the bottom of the
window: _______________

Note: Your total may differ from the amount in the screen capture.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 35
View Accounting for an Expenditure item

9. Position your cursor on one of the queried items with an amount in the Project Func
Burdened Cost field.

10. (B) Item Details

11. Select Cost Distribution Lines.

12. (B) OK

This selection opens the Cost Distribution Lines window.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 36
13. Review the information.

14. Close the Cost Distribution Lines window and return to the Expenditure Items window.

15. View subledger accounting information for the same expenditure item.

• Position your cursor on the same expenditure item.

• (M) Tools > View Accounting

• Review the accounting information on the View Expenditure Accounting window.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 37
16. Review the T-Accounts.

• (B) T Accounts

This button opens the Options window. You can set your T-Accounts options here.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 38
 • (B) T Accounts

• Review the T-Accounts for the expenditure item.

17. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 39
Agenda

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 40
Automatically Reversing Expenditure Batches

Automatically Reversing Expenditure Batches

You can create automatically reversing expenditure batches to record cost accruals in Oracle
Project Costing. Frequently, you receive items and services in one accounting period, which
are then invoiced in another period. You can use automatically reversing expenditure batches
to accrue cost in the period in which it is incurred.
To enter an automatically reversing batch, you must use the Miscellaneous Transactions
expenditure type class. When you release the batch, Oracle Project Costing creates reversing
entries that are accounted in the next General Ledger period.
As you add expenditure items and save the batch, Oracle Project Costing determines the GL
date for each transaction and stores it as an expenditure item attribute called Accrual Date.
Oracle Project Costing determines the accrual date as follows:
• If Expenditure Item Date Accounting is used, then the accrual date is the expenditure item
date.
• If Period-End Date Accounting is used, then the accrual date is the period ending date of
the General Ledger period that includes the expenditure item date.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 41
Releasing the Batch

Releasing the Batch

When you release an expenditure batch with the Reverse Expenditures In a Future Period
checkbox enabled, Oracle Project Costing automatically reverses each expenditure item
included in the batch. Oracle Project Costing determines the GL date for the reversing
expenditure items when it creates the reversing entries and it stores the date in the Accrual
Date attribute.
Oracle Project Costing determines the GL date as follows:
• If Expenditure Item Date Accounting is used, then the accrual date of the reversing item is
the first day of the GL period that follows the GL period that includes the accrual date of
the original expenditure item.
• If Period-End Date Accounting is used, then the accrual date of the reversing item is the
last day of the GL period that follows the GL period that includes the accrual date of the
original expenditure item.
• If the accrual dates for the reversing items fall in a period with a closed status in Oracle
General Ledger, then the release process fails and an error message appears.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 42
GL Periods for the Expenditure Items

GL Periods for the Expenditure Items

Oracle Project Costing assigns the original expenditure items to the current GL period and the
reversing expenditure items to the next GL period.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 43
Guided Demonstration - Enter an Automatically Reversing Batch
Enter the Batch Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Expenditure Batches window

• (N) Expenditures > Pre Approved Batches > Enter

3. Enter the batch information as specified in the following table:

Field Value
Operating Unit Vision Services
Batch Name XXBATCH2
Ending Date This Sunday's Date
Class Miscellaneous Transaction
Description Accruals
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Select
Control Totals Leave Blank
Control Count Leave Blank

4. (I) Save

5. (B) Expenditures

Enter the Expenditure

6. Enter the expenditure as specified in the following table:

Employee Name Employee Organization Expnd Ending

Number Date
Leave Blank Leave Blank Services-East This Sunday's Date

7. Enter the expenditure items for Services-East as specified in the following table:

Expnd Item Project Number Task Expnd Type Quantity Comment

Date Number
Today's Date Cost Reimbursable 1.1.1 Consulting 1000 Accrual
Tomorrow's Date Cost Reimbursable 2.0 Consulting 1500 Accrual

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 44
 For all expenditure items:
− Work Type = Commercial Customer-billable
− UOM = Currency

8. (I) Save

Submit and Release the Batch

9. Close the Expenditures window and return to the Expenditure Batches window.

10. (B) Submit

11. (B) Release

Oracle Project Costing creates the reversing expenditure items when you release the batch.

Review the Reversing Expenditure Items

12. (B) Expenditures

You see two new reversing expenditure items, one for each expenditure item that you
entered.

13. Review the accrual date.

• Position your cursor on the first expenditure item.

• (M) Folder > Show Field

• Select Provider Accrual Date.

• (B) OK

• Compare the accrual dates for the original and the reversing expenditure items.

14. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 45
Agenda

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 46
Upload Expenditure Batches from Microsoft Excel

Upload Expenditure Batches from Microsoft Excel

You can enter and upload pre-approved expenditure batches using Microsoft Excel
spreadsheets. You can connect to the database to validate records during entry, or you can
create the spreadsheet offline and allow validation to occur during the transaction upload.
Note: If you choose to create the spreadsheet offline, then only mandatory fields associated
with a list of values are validated during transaction upload. The transaction upload calls the
Transaction Import program, where additional transaction validations take place.
Download an Entry Template
You must first download an entry template from Oracle Project Costing. All fields marked with
an asterisk are mandatory. If List-Text appears under the column name, then a list of values is
available. To access the list of values, double-click in the column or select List of Values from
the Oracle menu located at the top of the spreadsheet template.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 47
Upload Expenditure Batches from Microsoft Excel

Upload Expenditure Batches from Microsoft Excel

Once the batch is ready, you can upload the data to the Oracle Project Costing transaction
import interface table. From here, the concurrent program PRC: Transaction Import brings the
expenditure batch into Oracle Project Costing.
Upload Batch
Select Upload from the Oracle menu located at the top of the spreadsheet template. Optionally,
select the Parameters button to select upload options. After viewing the Parameters window,
you must select Close or Proceed to Upload to return to the Upload window. Select Upload to
launch the upload process. The upload process updates the message column for each record in
the spreadsheet to indicate whether the upload was successful.
Transaction Import
The upload process populates the transaction import table. Run the PRC: Transaction Import
program to import the transactions into the Expenditure Items table. You can optionally use the
upload parameter to run the transaction import program automatically.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 48
Upload Contingent Worker Timecards

Upload Contingent Worker Timecards

You can enter contingent worker timecard batches in Microsoft Excel and upload the to Oracle
Project Costing:
• Each timecard line is related to a project and purchase order line.
• A amount check is performed against the purchase order during transaction import.
• Oracle Project Costing uses the cost rates stored on the purchase order to calculate
contingent worker labor costs.
• The supplier must submit an invoice. You match the invoice to the purchase order to
reduce outstanding balances.
• You interface additional cost, such as nonrecoverable tax or invoice price variances, to
Oracle Project Costing from the supplier invoice in Oracle Payables.
• You can bill contingent worker costs as labor.
To use this integration, you must enable the Import Contingent Worker Timecards with
Purchase Order Integration implementation option. You can optionally set up AutoAccounting
function transactions to determine default credit and debit accounts for contingent worker labor
costs that are different from the default accounts for employee labor costs.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 49
 Note: When contingent workers are allowed to enter timecards that are not related to a
purchase order, you must ensure that the purchase order is not related to a project. Otherwise,
the cost for the contingent work will be recorded in Oracle Project Costing twice, once as labor
and once as supplier cost.
Entering Contingent Worker Timecards with Oracle Purchasing Integration
1. Enter a project-related purchase order for the contingent worker labor in Oracle
Purchasing. Associate the purchase order and purchase order line to the contingent worker
assignment in Oracle HRMS.
2. Consolidate contingent worker project-related timecards and enter a timecard batch in
Microsoft Excel. Assign a purchase order and purchase order line to each timecard line.
3. Upload the timecards and run the program PRC: Transaction Import to import the
timecards into Oracle Project Costing. An amount check takes place against the purchase
order during import.
4. Process contingent worker timecards in Oracle Project Costing:
a. Run PRC: Distribute Labor Costs. The program retrieves cost rates from purchase
order.
b. Run PRC: Generate Cost Accounting Events (for the process category Labor Cost).
c. Run PRC: Create Accounting (for the process category Labor Cost).
5. Process in Oracle Payables:
a. Supplier submits an invoice.
b. Match supplier invoice to the purchase order to reduce outstanding balances.
c. Process and pay supplier invoice in Oracle Payables.
d. Run PRC: Interface Supplier Costs in Oracle Project Costing to interface any
additional costs, such as nonrecoverable tax or invoice price variances.
For information about entering contingent worker in Oracle Time & Labor, see the lesson titled
"Integration with Oracle Time & Labor."

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 50
Agenda

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 51
Expenditure Batch Reports

Expenditure Batch Reports

• AUD: Expenditure Batch Status - With this report you can identify expenditure batches
that are ready for release. Use this report to ensure that none of your expenditure batches
go unprocessed.
• AUD: Pre-Approved Expenditures Entry Audit - Use the AUD: Pre-Approved
Expenditures Entry Audit report to review pre-approved expenditures. After you enter all
expenditures for an expenditure batch, submit this report and use it to verify that the
entered data is correct before you submit your expenditure batch. This report provides a
summary for each expenditure batch that displays the total amounts for each expenditure
type in the expenditure batch.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 52
Agenda

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 53
Costing Flow: Import Transactions

Costing Flow: Import Transactions

Oracle Project Costing provides a single open interface, called Transaction Import, to enable
you to load transactions from external cost collection systems into Oracle Project Costing.
Transaction Import creates pre-approved expenditure items from transaction data entered in
external cost collection systems. Examples of external cost collection systems are:
• Timecard entry systems
• Supplier invoice entry systems
• Electronic data collection systems for asset usage (computer, printer, phone, etc.)
• Payroll systems
You can use the Review Transactions window to view and correct transactions that were
rejected during import.
Note: You can use Transaction Import to import project-related expense reports into Oracle
Project Costing from third-party systems. Expense reports that you import into Oracle Project
Costing must be fully accounted. Oracle Project Costing does not generate accounting events
to create accounting in Oracle Subledger Accounting for these imported costs.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 54
Overview of Transaction Sources

Overview of Transaction Sources

When you submit Transaction Import, you must identify the source of the transactions that you
want to import.
To import 3rd party transactions, use your import utility to enter this transaction source in the
TRANSACTION_SOURCE column of the PA_TRANSACTION_ INTERFACE_ALL table.
You then select the transaction source name in the Submit Request window when you want to
import transactions from this source.
For additional information about transaction sources, see the lesson titled "Implementing
Expenditures."

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 55
Overview of Transaction Import

Overview of Transaction Import

When you import transaction information from external cost collection systems, Oracle Project
Costing records the transaction details and the source of the imported transactions during
transaction import. The PRC: Transaction Import program (also referred to as Transaction
Import) validates the transaction information, reports any exceptions, and creates transactions
for all of the valid transactions.
To import transactions, you first must load transactions for external systems into the PA
Transaction Interface Table. Your implementation team must determine the method for
populating the table.
After you populate the interface table, you use the Submit Request window to run PRC:
Transaction Import to import transactions into Oracle Project Costing. The program selects all
pending transactions that satisfy the selection criteria of the request and validates each
transaction. If a transaction is valid, the program creates expenditure records in Oracle Project
Costing.
For additional information, see the online course titled "R12 Oracle Projects Advanced -
Transaction Import."

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 56
Resolving Import Exceptions

Resolving Import Exceptions

If any one expenditure item in an expenditure fails validation, then Oracle Project Costing
rejects the entire expenditure and updates each expenditure item in the expenditure with a
status of R (Rejected). However, only the expenditure item that was rejected appears on the
exception report. Other expenditure items attached to the rejected expenditure do not appear on
the report. The remainder of the expenditures in the batch interface to Oracle Project Costing.
Note: The transaction import validation logic is different when you run the program PRC:
Interface Supplier Costs to import transactions from Oracle Purchasing and Oracle Payables.
The program uses predefined supplier cost transaction sources to import expenditure items and
it rejects only the expenditure items that fail validation. The program imports the valid
expenditure items in the expenditure.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 57
Correcting Rejected Transactions within Oracle Project Costing

Correcting Rejected Transactions within Oracle Project Costing

To make changes to the source information because of invalid data, you can delete the rejected
rows from the interface table, correct the rejected transactions in the feeder system, and reload
them from the feeder system. You can also correct the transaction in the interface table using
the Review Transactions window. Oracle Project Costing automatically updates the status of
corrected items and all other transactions in the same expenditure to P (Pending). The original
and updated values for corrected transactions are stored in the audit table.
You can also use the Review Transactions window to create one or more new transactions
without loading them from the feeder system. This window was designed to expedite minor
additions to expenditure batches.
Review Transactions Window: Currency-Related Fields
The Review Transactions window is a folder-type window. Many of the currency fields are not
displayed in the default folder. You can create folders that display these fields.
Review Transactions Window: Expenditure Item Dates for Supplier Costs
The program PRC: Interface Supplier Costs validates expenditure item dates for supplier costs
that you interface from Oracle Purchasing and Oracle Payables. If the expenditure item date for
an expenditure item fails validation, then the program rejects the transaction and leaves it in the

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 58
 interface table. You must either change the date setup in Oracle Project Costing or change the
date for the expenditure item. You can use the Review Transactions window to change the date
for a rejected expenditure item. Oracle Project Costing picks up the revised date for the
rejected transaction the next time that you run the program PRC: Interface Supplier Costs. To
update the expenditure item date in the Review Transactions window, the Allow Interface
Modifications option must be enabled for the transaction source.

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 59
Summary

Copyright © 2007, Oracle. All rights reserved.

Entering Expenditures
Chapter 3 - Page 60
 Implementing Expenditures
Chapter 4

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 2
Implementing Expenditures

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 4
Expenditures Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 5
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 6
Expenditure Categories

Expenditure Categories
Oracle Project Costing uses expenditure categories to group expenditure types for costing. An
expenditure category describes the source of your organization’s costs. For example, an
expenditure category with a name such as Labor refers to the cost of labor. You use
expenditure categories when you define organization overrides, for budgeting, and for
transaction controls. In addition, you can use expenditure categories in your AutoAccounting
rules and for reporting.
Use the Expenditure Categories window to define an expenditure category. For each
expenditure category, enter a unique name for the expenditure category and a description.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 7
Define Revenue Categories

Define Revenue Categories

A revenue category describes a source of your organization’s revenue. For example, a revenue
category with a name such as Labor refers to labor revenue.
Use the Revenue Category Lookups window to define new revenue categories. Revenue
categories are used for grouping expenditure types and event types for revenue and billing.
You can use revenue categories for budgeting, for reporting purposes, and in your
AutoAccounting rules.
For additional discussion regarding event types, see the course “R12 Project Billing
Fundamentals.”

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 8
Define Units

Define Units
A unit of measure records quantities or amounts of an expenditure item. You assign a unit to
each expenditure type. For example, to calculate the cost of computer services using the
amount of time a user uses a computer, you can define an expenditure type for computer
services and assign it the unit Hours.
Use the Unit Lookups window to define units.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 9
Expenditure Type Classes

Expenditure Type Classes

An expenditure type class tells Oracle Project Costing how to process an expenditure item.
Oracle Project Costing predefines all expenditure type classes.
Oracle Project Costing uses the following expenditure type classes to process labor costs:
• Straight Time - Labor cost calculated using a base cost rate multiplied by hours
• Overtime - Labor cost calculated using a premium cost rate multiplied by hours.
Oracle Project Costing uses the following expenditure type classes to process non-labor project
costs:
• Expense Reports – Expense reports from Oracle Payables or Oracle Internet Expenses.
You cannot enter expense reports directly into Oracle Project Costing. Expense reports
that you import into Oracle Project Costing must be fully accounted prior to import.
• Usages - You must specify the non-labor resource for every usage item you charge to a
project. For each expenditure type classified by a Usage expenditure type class, you also
define non-labor resources and organizations that own each non-labor resource.
• Supplier Invoices - Supplier invoices, discounts, and payments from Oracle Payables or
an external system, and receipt accruals from Oracle Purchasing.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 10
 • Miscellaneous Transaction - Miscellaneous Transactions are used to track miscellaneous
project costs. Examples of uses for miscellaneous transactions are:
- Fixed assets depreciation
- Allocations
- Interest charges
• Burden Transaction - Burden transactions track burden costs that are calculated in an
external system or calculated by Oracle Project Costing as separate, summarized
transactions. These costs are created as a separate expenditure item that has a burdened
cost amount, but has a quantity and raw cost value of zero. You can adjust burden
transactions that are not system-generated.
• Work In Process – You use this expenditure type class for Oracle Project Manufacturing
WIP transactions that you interface from Manufacturing to Oracle Project Costing. You
can also use this expenditure type class when you import other manufacturing costs via
Transaction Import or when you enter transactions via pre-approved batch entry.
• Inventory - This expenditure type class is used for the following transactions:
- Oracle Project Manufacturing transactions that you import from Manufacturing or
Oracle Inventory.
- Oracle Inventory Issues and Receipts that you import from Oracle Inventory in a
manufacturing or non-manufacturing installation.
- You can also use this expenditure type class when you import other manufacturing
costs via Transaction Import or when you enter transactions via pre-approved batch
entry.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 11
Define Expenditure Types

Define Expenditure Types

An expenditure type is a classification of cost that you assign to each expenditure item you
enter in Oracle Project Costing. Defining expenditure types is a key aspect of your
implementation of Oracle Project Costing. Enter the following information to define an
expenditure type:
• Name - A unique name for the expenditure type.
• Expenditure Category - The expenditure category you want to associate with this
expenditure type.
• Revenue Category - The revenue category you want to associate with this expenditure
type.
• Unit of Measure (UOM) - The unit of measure to use when Oracle Project Costing
calculates the cost for this expenditure type. You must enter Hours for labor expenditure
types.
• Tax Classification Code - Optionally, click Tax Classification Code and select the tax
classification code for customer invoice lines for this expenditure type and operating unit.
Oracle Project Costing uses this code as the default tax classification code based on the
Application Tax Options hierarchy that you define in Oracle E-Business Tax for the

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 12
 combination of Oracle Project Costing and the specified operating unit. For more
information on setting up taxes and the hierarchy of tax options for an application and
operating unit, see the Oracle E-Business Tax User Guide.
• Rate Required - If this expenditure type requires a cost rate, then enable the Rate
Required check box. Select the Cost Rate button to navigate to the Expenditure Cost Rates
window, select an operating unit, and then enter a cost rate and its effective dates. If this
expenditure type does not require a cost rate, then do not enable the Rate Required check
box. If you create a non-labor expenditure type without checking the Rate Required check
box, you cannot subsequently require and enter a cost rate for that expenditure type.
Instead, you must disable the expenditure type and create a new one that requires a cost
rate and has a unique name. If you enable the Rate Required check box when you create a
non-labor expenditure type, then you can change the cost rate at any time.
For supplier invoice expenditure types, if you specify that a rate is required, Oracle Project
Costing requires you to enter a quantity in Oracle Payables for invoice distributions using
that expenditure type. When you interface the invoice distribution to Oracle Project
Costing, Oracle Project Costing copies the quantity and amount to the expenditure item
and calculates the rate. If you define a supplier invoice expenditure type with the Rate
Required option disabled, then the quantity of the expenditure item is set to the amount
you enter in Oracle Payables.
• Description and Dates - On the Description, Dates tab, enter a description and an
effective from date for the expenditure type. You can optionally enter an effective to date
for the expenditure type.
• Expenditure Type Classes - In the Expenditure Type Class region, select the expenditure
type class or classes for this expenditure type.
Attention: After you create and save an expenditure type, you cannot subsequently update the
following attributes for the expenditure type:
• Name
• Expenditure Category
• Revenue Category
• Unit of Measure
• Rate Required check box
Instead, you must enter an end date for the expenditure type and create a new one that has a
unique name. When you enter an end date for an expenditure type, the end date has no affect
on existing transactions. Oracle Project Costing uses the old expenditure type to report on and
process existing transactions. You cannot use the old expenditure type for new transactions that
have an expenditure item date after the end date.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 13
Multiple Expenditure Type Classes Per Expenditure Type

Multiple Expenditure Type Classes Per Expenditure Type

You can assign multiple expenditure type classes to an expenditure type. This feature allows
you to use a single expenditure type to classify as many different costs as you require. You can
use the same expenditure type for expenditures that have different origins (and therefore
different accounting), but which should otherwise be grouped together for costing, budgeting,
or summarization purposes.
For example, an expenditure item with the expenditure type Materials can have the
expenditure type class Supplier Invoice if it originated in Oracle Payables, and the expenditure
type class Inventory if it originated in Oracle Inventory. This ability enables you to easily
group these costs together for reporting and budgeting purposes, because the cost rolls up into
the same expenditure type, regardless of the source of the individual transaction.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 14
Practice - Define an Expenditure Type
Overview
In this practice, you will define a new expenditure type. Your company maintains a motor pool
consisting of trucks that departments can use for deliveries. The motor pool charges other
organizations for use of the trucks. This type of cost is a Usage in Oracle Project Costing.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define an Expenditure Type

Define an expenditure type to record motor pool truck usage charges. Use the information as
specified in the following table:

Name Expenditure Revenue UOM Rate

Category Category Required
XXMotor Pool Trucks Chargebacks Other Day Yes

Enter a description and assign the expenditure type an expenditure type class of Usages.

Assign a Tax Classification Code for Billing Purposes

These internal charges are eligible for billing on some time and materials projects in Oracle
Project Billing. Assign a tax classification code of Location for the Vision Services operating
unit.

Assign a Cost Rate

Assign a cost rate of $250 USD a day for the Vision Services operating unit.

Note: In a future practice, you will create non-labor resources for this expenditure type and
assign rate overrides.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 15
Solution - Define an Expenditure Type
Define an Expenditure Type

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Expenditure Types window.

• (N) Setup > Expenditures > Expenditure Types

3. Define the expenditure type.

• (T) Classifications

• Enter the basic expenditure type information as specified in the following table:

Name Expenditure Revenue UOM Rate

Category Category Required
XXMotor Pool Trucks Chargebacks Other Day Yes

• (T) Description, Dates

• Enter the description and date information as specified in the following table:

Description Effective Date From Effective Date To

<Enter a brief description> Today's Date Leave Blank

• Assign an expenditure type class to the new expenditure type as specified in the
following table:

Expenditure Type Class Effective Date From Effective Date To

Usages Today's Date Leave Blank

4. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 16
Assign a Tax Classification Code for Billing Purposes

5. Assign a tax classification code to your expenditure type.

• (B) Tax Classification Code

• Enter the tax classification code information as specified in the following table:

Operating Unit Tax Classification Code

Vision Services Location

• (I) Save

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 17
 • Close the Tax Classification Code window and return to the Expenditure Types window.

Assign a Cost Rate

6. Assign a cost rate to your expenditure type.

• (B) Cost Rates

• Enter the cost rate information as specified in the following table:

Operating Unit Currency Rate Effective Effective

Date From Date To
Vision Services USD 250 Today's Date Leave Blank

• (I) Save

7. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 18
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 19
Transaction Control Extension

Transaction Control Extension

The transaction control extension enables you to define your own rules to implement company-
specific expenditure entry policies. You can validate any transaction entered into Oracle
Project Costing, including transactions from other Oracle Applications and from external
systems. The transaction control extension is called during expenditure entry. In addition, the
program PRC: Transaction Import calls the transaction control extension to validate
transactions before they are loaded into Oracle Project Costing.
Some examples of rules that you may define are:
• You cannot charge new transactions to projects for which the work is complete. You can
only transfer items to these projects.
• You can charge labor hours for a future date.
The transaction control extension validates expenditure items one at a time. All validation is
done for each expenditure item. Oracle Project Costing checks each expenditure item during
data entry and the transaction is validated before it commits the transaction to the database.
Oracle Project Costing processes the transaction control extension after the standard validation
performed for expenditure entry, and after validating any transaction controls entered at the
project or task level.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 20
AutoApproval Extension

AutoApproval Extension
Use the AutoApproval Extension to define conditions under which expense reports in Oracle
Internet Expenses or timecards in Oracle Time & Labor are approved automatically. You can
configure this extension to meet your needs. For additional information, see the Oracle
Projects API's, Client Extensions, and Open Interfaces Reference.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 21
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 22
Define Transaction Sources

Define Transaction Sources

Transaction sources identify the source of transactions imported into Oracle Project Costing
using Transaction Import. The transaction source determines how Transaction Import
processes transactions. The transaction source is used to identify transactions in the
PA_TRANSACTION_INTERFACE_ALL table. When you run the concurrent program PRC:
Transaction Import, you must enter the transaction source for the transactions that you want to
import into Oracle Project Costing. The Transaction Import program selects all eligible
pending transactions in the PA_TRANSACTION_INTERFACE_ALL table that satisfy the
selection criteria of the program request and determines the validity of each transaction.
Oracle Project Costing predefines some transaction sources, and you can create others to fit
your business needs. When you create a transaction source, you select the transaction source
options to control the Transaction Import processing. For details about each of the transaction
source options, see the Oracle Projects Implementation Guide and the online course titled
"R12 Oracle Projects Advanced - Transaction Import."

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 23
Example Predefined Transaction Sources

Example Predefined Transaction Sources

Oracle Projects predefines a set of transaction sources to import cost from Oracle sources. Do
not use these transaction sources to import transactions from non-Oracle sources. For a
complete list of predefined transaction sources, see the Oracle Projects implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 24
Example Predefined Transaction Sources: Manufacturing and
Inventory

Example Predefined Transaction Sources: Manufacturing and Inventory

Oracle Project Costing predefines transaction sources to import transactions from Oracle
Project Manufacturing and Oracle Inventory. Do not use these transaction sources to import
transactions from non-Oracle sources. For a complete list of predefined transaction sources, see
the Oracle Projects implementation Guide.
For the transaction sources for Inventory, WIP, and WIP Straight Time transactions, the GL
Posting Option in the Project Manufacturing Parameters window determines whether Oracle
Project Manufacturing or Oracle Project Costing generates accounting events and creates
accounting for the transactions in Oracle Subledger Accounting as follows:
• If the posting option is Manufacturing, then Oracle Project Manufacturing creates
accounting for the transactions in Oracle Subledger Accounting.
• If the posting option is Projects, then Oracle Project Costing creates accounting for the
transactions in Oracle Subledger Accounting. The value that you select for the Account
Option determines the source of the default accounting as follows:

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 25
 - If the option is set to Use AutoAccounting, then Oracle Project Costing uses the
transaction sources with No Accounts to import the transactions with no accounts.
Oracle Project Costing then uses AutoAccounting to derive the default accounts.
- If the option is set to Send Accounts to PA, then Oracle Project Costing uses the
transaction sources with Accounts to import the transactions and the default
accounting from Oracle Project Manufacturing.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 26
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 27
Listings

Listings
Use the following concurrent programs to document expenditure setup information:
• IMP: Expenditure Types Definition - Use IMP: Expenditure Types Definition Listing to
review expenditure types. You can print a listing for one or all expenditure categories and
for a specified effective date. If an effective date is specified for the report, then the report
lists only expenditure types that are active as of the date you enter.
• IMP: Revenue Categories - Use the IMP: Revenue Categories Listing to review revenue
categories. For each revenue category listed, this report prints all the associated
expenditure types and their corresponding expenditure categories. To limit the report to
only one revenue category, enter the revenue category. Otherwise, leave this field blank.
• IMP: Units Definition - Use the IMP: Units Definition Listing to review all units of
measure.

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 28
Summary

Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 29
 Copyright © 2007, Oracle. All rights reserved.

Implementing Expenditures
Chapter 4 - Page 30
 Performing Cost Processing
Chapter 5

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 2
Performing Cost Processing

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 5
Overview of Costing

Overview of Costing
Costing includes the following major steps:
1. Enter and approve expenditures through the Oracle Project Costing user interface, or
import transactions. You can use Transaction Import to import unaccounted and
accounted transactions. If you import unaccounted transaction, then you must run the
costing programs for the transactions. If you import accounted transactions, then no
additional processing is needed.
2. Distribute costs and derive default accounting. Cost distribution is the act of calculating
the cost and determining the cost accounting for an expenditure item. Oracle Project
Costing has a set of cost distribution programs that you run, depending upon the type of
expenditure. Some imported expenditures are already cost distributed when you import
them and do not require further cost distribution processing.
3. Generate cost accounting events. The program PRC: Generate Cost Accounting Events
collects cost distribution lines in Oracle Project Costing and uses AutoAccounting to
determine the default liability accounts for raw and burden costs. It also generates cost
accounting events for Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 6
Overview of Costing

Overview of Costing
4. Create accounting in Oracle Subledger Accounting and transfer the accounting entries to
Oracle General Ledger. You run the concurrent program PRC: Create Accounting in
Oracle Project Costing to create accounting entries for accounting events. Depending on
the parameter values you select, the program performs the following tasks:
- Creates subledger accounting entries for unprocessed accounting events. If you define
your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites default accounts, or individual segments of
accounts, that Oracle Project Costing derives using AutoAccounting.
- Transfers accounting entries to the Oracle General Ledger interface tables. In Oracle
Project Costing, you can optionally run a separate program named PRC: Transfer
Journal Entries to GL to transfer accounting entries to Oracle General Ledger.
- Initiates the journal import program in Oracle General Ledger.
- Initiates posting of journal entries in Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 7
Overview of Costing

Overview of Costing
In Oracle General Ledger, the Journal Import program takes the summary interface
information stored in the Oracle General Ledger interface tables and automatically creates
journal entries for posting in Oracle General Ledger. Journal Import creates a journal entry
batch for your journal entry records in your ledger and accounting period. For each journal
entry category in a batch, Journal Import creates a journal entry header. For each header in a
journal entry batch, Journal Import creates one or more journal entry lines that correspond to
the journal entry records you transfer from Oracle Subledger Accounting to Oracle General
Ledger.
When you run the program PRC: Create Accounting and you select Yes for the parameter
Transfer to General Ledger, the create accounting program transfers the final accounting from
Oracle Subledger Accounting to Oracle General Ledger and runs the Journal Import program.
When you submit the program PRC: Create Accounting, and you choose to transfer to Oracle
General Ledger, or alternatively when you submit the program PRC: Transfer Journal Entries
to GL, you can optionally set the parameter Post in General Ledger to Yes to enable the
program to automatically post successfully imported journal entries in Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 8
Costing Concepts

Costing Concepts
• Raw Cost - Cost directly attributable to work performed. Examples of raw cost are
salaries and travel expenses.
• Burden Cost - Cost of doing business that supports raw cost and cannot be directly
attributed to work performed. Examples of burden cost are fringe benefits, office space,
and general and administrative costs.
• Total Burdened Cost - The total cost. It consists of raw cost plus any burden cost.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 9
Overview of Encumbrance Accounting

Overview of Encumbrance Accounting

Budgetary controls are set to enforce limits, and encumbrance accounting creates reservations
for planned expenditures. The reservations ensure that funds will be available when project
costs are incurred, and provide a complete picture of funds available for future use. Oracle
Project Costing creates project encumbrance entries when you enable top-down budget
integration for a project.
Budgetary Controls
Budgetary controls enable you to monitor and control expense commitment transactions
entered for a project based on a project cost budget. Expense commitment transactions are
transactions for non-inventory items. Oracle Project Costing enforces budgetary controls for:
• Project-related purchase requisitions and purchase orders entered in Oracle Purchasing
• Contingent worker purchase orders entered in Oracle Purchasing
• Supplier invoices entered in Oracle Payables
• Project-related prepayments not matched to a purchase order and the application of
unmatched prepayments to supplier invoices

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 10
 Note: Budgetary controls are not enforced for project-related expense reports entered in Oracle
Payables because you generally enter expense reports after costs are already incurred.
Therefore, you should ensure that your procedures for approving expense report expenditures
include verification of available funds according to your business requirements.
Budget Integration
Oracle Project Costing budget integration features enable you to integrate project budgets with
non-project budgets in Oracle General Ledger. Integration is defined in order to perform
bottom-up or top-down budgeting.

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

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 11
Agenda

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 12
Costing Flow: Distribute Costs

Costing Flow: Distribute Costs

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

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 13
Cost Distribution Processing Flow

Cost Distribution Processing Flow

Distribution programs perform the following tasks:
• Calculate raw cost (quantity x rate) in transaction currency
• Calculate burden and burdened cost
• Create and distribute raw cost distribution lines
• Convert all transaction currency amounts to functional currency and project cost currency
amounts
• Create and distribute burden and burdened cost distribution lines
• Determine default accounting using AutoAccounting (debit account for raw cost and
burden cost, debit and credit accounts for total burdened cost)
Note: If you are not performing burdening, then you can skip the programs that create and
distribute burden and burdened cost. See the lesson titled "Implementing Burden Costing."

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 14
Determining Costs

Determining Costs
Calculating labor cost:
• Raw cost is the result of multiplying hours by a rate.
• Burden cost is the result of multiplying raw cost by a burden multiplier.
• Burdened cost is the sum of raw cost and burden cost.
• For employees and contingent workers, you can maintain labor cost rate schedules by
employee (includes contingent workers) or by job. You also have the option of overriding
labor cost rates for individual employees and contingent workers. In addition, you can
define a unique labor costing algorithm using the Labor Costing Extension.
• For contingent worker timecards with Oracle Purchasing integration, when you run the
program PRC: Distribute Labor Costs, Oracle Project Costing uses rates from the related
purchase order to calculate the costs.
• Oracle Project Costing determines costs for labor transactions with the following
programs:
- PRC: Distribute Labor Costs
- PRC: Distribute Labor Costs for a Range of Projects

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 15
 Calculating cost for usages and miscellaneous transactions:
• Raw cost is equal to quantity (if quantity is in currency, for example, a currency amount),
or alternatively, raw cost is the result of multiplying quantity by a rate (if quantity is not in
currency). You can define cost rates for usage and miscellaneous costs as follows:
- Cost rates by expenditure type
- Cost rates by non-labor resource and owning organization for usages to override the
expenditure type cost rate
• Burden cost is the result of multiplying raw cost by a burden multiplier.
• Burdened cost is the sum of raw cost and burden cost.
• Oracle Project Costing determines costs for usage and miscellaneous costs with the
following program:
- PRC: Distribute Usage and Miscellaneous Costs
Determining supplier cost:
• For supplier cost interfaced from Oracle Payables, raw cost for each expenditure item is
equal to the supplier invoice distribution line amount (accrual basis accounting) or the
payment distribution amount (cash basis accounting) in Oracle Payables.
• For receipt accrual cost interfaced from Oracle Purchasing, raw cost is equal to the receipt
transaction amount in Oracle Purchasing.
• Burden cost is the result of multiplying raw cost by a burden multiplier.
• Burdened cost is the sum of raw cost and burden cost.
• Oracle Project Costing determines costs for supplier invoice transactions with the
following programs:
- PRC: Interface Supplier Costs
- PRC: Distribute Supplier Cost Adjustments
- PRC: Distribute Supplier Costs Adjustments for a Range of Projects
Determining expense report cost:
• Raw cost for each expenditure item is equal to the expense report invoice distribution line
amount (accrual basis accounting) or the payment distribution amount (cash basis
accounting) in Oracle Payables.
• Burden cost is the result of multiplying raw cost by a burden multiplier.
• Burdened cost is the sum of raw cost and burden cost.
• Receipt amount is the expenditure amount in the receipt currency.
• Note: When you split a receipt in Oracle Payables across multiple expenditure items,
Oracle Project Costing does not divide the receipt amount among the expenditure items.
As a result, each expenditure item is associated with the full receipt amount.
• Oracle Project Costing determines costs for expense reports with the following programs:
- PRC: Interface Expense Reports from Payables
- PRC: Distribute Expense Report Adjustments

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 16
Burden Cost Calculations

Burden Cost Calculations

Oracle Project Costing calculates burden cost by multiplying raw cost by a burden multiplier.
This calculation is represented in the following formula:
• Burden Cost = Raw Cost x Burden Multiplier
Oracle Project Costing calculates total burdened cost by adding burden cost to the raw cost
amount. This calculation is represented in the following formula:
• Total Burdened Cost = Raw Cost + Burden Cost
You use the burden multiplier to derive the total amount of the burden cost. For additional
discussion regarding burdening, see the lesson titled “Implementing Burden Costing.”

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 17
AutoAccounting: Distribution Programs

AutoAccounting: Distribution Programs

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

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 18
Cost Distribution Concurrent Programs

Cost Distribution Concurrent Programs

Oracle Project Costing provides the following cost distribution concurrent programs
• PRC: Create and Distribute Burden Transactions - Summarizes burden cost and
creates expenditure items for burden transactions. The program creates burden
transactions for projects, depending on the method you use to store burden costs. See the
lesson titled “Implementing Burden Costing.”
• PRC: Distribute Borrowed and Lent Amounts - Distributes all transactions identified
for Borrowed and Lent accounting. The program determines the transfer price amount for
each transaction and generates the default borrowed and lent accounting entries. You run
this program in the provider operating unit. See the lesson titled "Cross Charge."
• PRC: Distribute Expense Report Adjustments - Computes the burden costs associated
with adjusted expense report expenditure items and determines the account to which to
post the raw costs. The program also identifies if a transaction is cross-charged and, if so,
determines the processing it requires.
• PRC: Distribute Labor Costs for a Range of Projects & PRC: Distribute Labor Costs
- Computes the labor costs for timecard hours and determines the default GL account to

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 19
 which to post the cost. The program also identifies if a transaction is cross-charged and
determines the processing it requires.
• PRC: Distribute Supplier Cost Adjustments & PRC: Distribute Supplier Cost
Adjustments for a Range of Projects - Processes adjustments made in Oracle Project
Costing to supplier costs, such as supplier invoices, receipt accruals, supplier payments,
and discounts. This program determines the default GL account for supplier cost
adjustments.
• PRC: Distribute Total Burdened Costs - Creates total burdened cost distribution lines
for all transactions on a burdened project. The program also identifies and processes any
cross-charged transactions. The program creates default accounts for credit and debit
distribution lines for burdened cost. See the lesson titled see the lesson titled
“Implementing Burden Costing.”
• PRC: Distribute Usage and Miscellaneous Costs - Computes the costs and determines
the default GL account to which to post cost for expenditure items with the following
expenditure type classes: Usages, Burden Transactions, Miscellaneous Transactions, and
Inventory and WIP transactions not already costed or accounted. The program also
identifies if a transaction is cross-charged and, if so, determines the processing it requires.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 20
Agenda

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 21
Costing Flow: Create Accounting

Costing Flow: Create Accounting

After you distribute costs, the next step is to create the accounting for the costs. Creating
accounting consists of four main steps:
1. Generating cost accounting events.
2. Creating accounting for accounting events in Oracle Subledger Accounting.
3. Transferring final subledger accounting to Oracle General Ledger.
4. Importing and posting the journal entries in Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 22
Integration with Oracle Subledger Accounting

Integration with Oracle Subledger Accounting

Oracle Project Costing fully integrates with Oracle Subledger Accounting so that you can
create accounting for your project-related transactions.
Oracle Project Costing generates accounting events and creates the subledger accounting
entries for the accounting events. Oracle Project Costing predefines setup for Oracle Subledger
Accounting so Oracle Subledger Accounting accepts the default accounting information from
Oracle Project Costing without change. Next, Oracle Subledger Accounting transfers the final
accounting to Oracle General Ledger. If you define your own detailed accounting rules in
Oracle Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts,
or individual segments of accounts, that Oracle Project Costing derives using AutoAccounting.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 23
Generating Cost Accounting Events

Generating Cost Accounting Events

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

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 24
AutoAccounting: Generate Accounting Events

AutoAccounting: Generate Accounting Events

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

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 25
Creating and Transferring Accounting

Creating and Transferring Accounting

The program PRC: Create Accounting creates draft or final accounting entries in Oracle
Subledger Accounting for unprocessed accounting events. If you define your own detailed
accounting rules in Oracle Subledger Accounting, then Oracle Subledger Accounting
overwrites default accounts, or individual segments of accounts, that Oracle Project Costing
derives using AutoAccounting. You can run this program in either draft mode, if you want to
review the results before you create the final accounting, or final mode. You can optionally
choose to transfer final journal entries to Oracle General Ledger, initiate the Journal Import
program, and post the journal entries in Oracle General Ledger.
If you do not choose to have the program transfer final journal entries to Oracle General
Ledger, then you can run the program PRC: Transfer Journal Entries to GL to transfer final
journal entries from Oracle Subledger Accounting to Oracle General Ledger. This program
transfers final subledger accounting journal entries from Oracle Subledger Accounting to
Oracle General Ledger and initiates the program Journal Import in Oracle General Ledger.
Optionally, you can choose to have the program post journal entries in Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 26
Oracle General Ledger Journal Import

Oracle General Ledger Journal Import

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

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 27
Agenda

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 28
Streamline Processes

Streamline Processes
Streamline processes submit and monitor a series of concurrent programs that must be run
sequentially to complete a function. For example, distributing labor costs, generating cost
accounting events, creating accounting in Oracle Subledger Accounting, and transferring the
costs to Oracle General Ledger requires that you submit several programs. Instead of running
the individual programs one at a time, you can choose to submit the program PRC: Submit
Interface Streamline Processes and select the streamline option DXL: Distribute and Interface
Labor Costs to GL. The streamline process then submits and monitors the progress of each
separate program in sequence until all programs complete. Oracle Project Costing provides
three streamline processes:
• PRC: Submit Interface Streamline Processes - Combines programs that send
information from Oracle Project Costing to other Oracle applications.
• PRC: Submit Project Streamline Processes - Combines programs that distribute costs,
interface supplier costs, generate revenue, and generate invoices for a single project.
Generally, you submit a project streamline request after you make expenditure or invoice
adjustments.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 29
 • PRC: One-Step Interface Streamline Processes to GL - Generates accounting events
for transactions, creates accounting in Oracle Subledger Accounting, transfers subledger
journal entries to Oracle General Ledger, runs the program Journal Import, and posts the
journal entries in Oracle General Ledger. The streamline options for the program PRC:
One-Step Interface Streamline Processes to GL are similar to the streamline options for
the program PRC: Interface Streamline Processes. In addition, you can choose the
streamline option All Streamline Processes to GL to process all distributed cost
transactions and released revenue transactions.
Note: For the program PRC: Create Accounting, the interface streamline processes
automatically set the Mode parameter to Final, the Transfer to General Ledger parameter to
Yes, and the Post in General Ledger parameter to Yes.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 30
Submitting Streamline Processes

Submitting Streamline Processes

To submit a streamline process:
1. Navigate to the Submit Request window.
2. For Name, choose one of the three streamline processes. For details about each of the
streamline options and the programs that each option initiates, see Oracle Projects
Fundamentals.
3. Choose the Streamline Option you want to submit.
4. (Optional) Enter the Reschedule Interval, Reschedule Time of Day, and Stop
Rescheduling Date.
5. Choose the Submit button. Oracle Project Costing submits your streamline request. The
Streamline Processing Report lists the name, the concurrent request ID, and the
completion status of each child programs monitored by the streamline process.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 31
Practice - Distribute Costs
Overview
In this practice, you will run the cost distribution program for the XXBATCH expenditure batch
that you entered in the practice titled "Enter an Expenditure Batch."

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Distribute Labor Costs

Submit the concurrent program PRC: Distribute Labor Costs for your XXBATCH expenditure
batch. Ensure that you select your expenditure batch and project as program parameters. Review
the output report.

Note your Request ID __________________________

Review the Results in Expenditure Inquiry

After the program is complete, query the expenditure items for your project in Expenditure
Inquiry and review the cost distribution line information for one of the expenditure items. The
distribution program calculates the raw and burdened cost for the four expenditure items.

The status of the cost distribution line is Pending. When the instructor runs the program PRC:
Generate Cost Accounting Events, the program will derive the default credit account for the cost
distribution line.

Note: The instructor will run the programs PRC: Generate Cost Accounting Events and PRC:
Create Accounting for the entire class in the next guided demonstration.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 32
Solution - Distribute Costs
Distribute Labor Costs

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Distribute Labor Costs from the list of values in the Name field
and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Expenditure Batch XXBATCH
Project Number XXCS

7. (B) OK

8. (B) Submit

• Note your Request ID __________________________

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 33
9. (B) No in the Decision dialog box

10. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

11. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

12. Review the output report.

• (B) View Output

13. Close the output page and the Requests window.

Review the Results in Expenditure Inquiry

14. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

15. Query all expenditure items for your XX Capital Services Project.

• Enter the find criteria:

− Project Number = XXCS
− Project Name = XX Capital Services

• (B) Find

16. Review the expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 34
 The distribution program calculates the raw and burdened cost for the four expenditure
items.

17. Review cost distribution line information.

• Position your cursor on one of the queried items with an amount in the Project Func
Burdened Cost field.

• (B) Item Details

• Select Cost Distribution Lines.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 35
 • (B) OK

• Review the cost distribution line information.

The status of the cost distribution line is Pending. When the instructor runs the program
PRC: Generate Cost Accounting Events, the program will derive the default credit account
for the cost distribution line.

18. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 36
Guided Demonstration - Create Accounting for Costs
Run Programs to Create Accounting for Labor Costs

The instructor will submit a streamline program to create accounting for the entire class.

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Submit Interface Streamline Processes from the list of values in
the Name field and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Streamline Option XL: Interface Labor Costs To GL

7. (B) OK

8. (B) Submit

9. (B) No in the Decision dialog box

10. Find your request.

• Select the All My Requests option button.

• (B) Find

11. Wait for the programs to finish.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

The following programs run during streamline processing:

− PRC: Submit Interface Streamline Processes
− PRC: Generate Cost Accounting Events
− Process Category= Labor Costs

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 37
 − PRC: Create Accounting
− Process Category= Labor Costs
− Accounting Program
− Journal Import
− Posting: Single Ledger
− Subledger Accounting Balances Update

12. When the streamline program is complete, close the Requests window and return to the
Navigator.

Review the Results in Expenditure Inquiry

13. Navigate to the Find Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > All

14. Query all expenditure items for the class.

• Enter the find criteria:

− Operating Unit = Vision Services
− Expenditure Type Class = Straight Time
− Item Dates (from) = Date for the first day of this class

• (B) Find

• (B) Yes for the Decision message

15. Review cost distribution line information.

• Position your cursor on one of the queried items.

• (B) Item Details

• Select Cost Distribution Lines.

• (B) OK

• Review the cost distribution line information.

The status of the cost distribution line is Accepted -- Final Accounted in Oracle Subledger
Accounting.

16. Close the Cost Distribution Lines window

17. Review the final subledger accounts.

• Position your cursor on the same expenditure item.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 38
 • (M) Tools > View Accounting

• Review the accounting information on the View Expenditure Accounting window.

18. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 39
Agenda

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 40
Overview of Period Processing

Overview of Period Processing

Project Accounting Periods
A project accounting period is an implementation-defined period against which you can
measure project performance. Project accounting periods are also referred to as PA periods.
PA Periods and GL Periods
To report project information more frequently than your Oracle General Ledger accounting
periods (GL periods) allow, you can define PA periods that are shorter than your GL periods.
For example, you can define weekly PA periods and monthly GL periods. You can also create
PA periods that match existing GL periods. However, defining PA periods that overlap your
GL periods can create the need for numerous adjustments and journal entries if you wish to
reconcile Oracle Project Costing with Oracle General Ledger. For additional information, see
the course titled "R12 Project Foundation Fundamentals."

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 41
Control of GL Period Statuses for Project Transactions

Control of GL Period Statuses for Project Transactions

You can control the status of GL periods for transaction processing in Oracle Project Costing,
without closing the period in Oracle General Ledger. This feature enables you to open and
close GL periods for project transactions independent of the closing processes for the other
subledgers. The status of a GL period for project transactions in Oracle Project Costing can
differ from the same GL period’s status in Oracle General Ledger.
Enabling the Maintain Common PA and GL Periods Implementation Option
If your PA periods and GL periods are identical, you can enable the Maintain Common PA and
GL Periods implementation option. When this option is enabled, the system automatically
maintains PA period statuses as you maintain the GL period statuses. To use this method, you
must define identical PA periods and GL periods.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 42
Transaction Accounting Methods

Transaction Accounting Methods

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

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 43
Period End Date Accounting

Period End Date Accounting

With period end date accounting, you maintain PA periods in Oracle Project Costing and GL
periods in Oracle General Ledger. Oracle Project Costing derives the PA date for a transaction
from the expenditure item date and sets the PA date to the PA period ending date. The period
must be in either Open or Future status. Next, Oracle Project Costing derives GL dates from
PA dates and sets the accounting date to the end date of the corresponding GL accounting
period.
Period End Date Accounting Example
In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-
2007. This expenditure item date falls within the SEP-07 PA period and because the SEP-07
PA period is open, Oracle Project Costing sets the PA date to 30-SEP-07, the last day of the
period.
Next, Oracle Project Costing uses the PA date (30-SEP-07) to derive the GL date. The PA date
falls into the open SEP-07 GL period. The derived GL date is 30-SEP-2007, the end date of the
SEP-07 GL period.
Date Derivation
Project Accounting Date (PA Date)

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 44
 • Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
Adjustments
- The PA date is set to the end date of the earliest PA period that includes or follows
the transaction expenditure item date and has a status of Open or Future.
• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
- The PA date is determined based on the relationship of the transaction expenditure
item date to the GL date entered in Oracle Purchasing or Oracle Payables.
- If the expenditure item date is less than or equal to the GL date, then the PA date
is set to the end date of the earliest PA period that includes or follows the GL
date and has a status of Open or Future.
- If the expenditure item date is greater than the GL date, then the PA date is set to
the end date of the earliest PA period that includes or follows the expenditure
item date and has a status of Open or Future.
Oracle General Ledger Accounting Date (GL Date)
• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
Adjustments
- The GL date is set to the end date of the earliest GL period that includes or follows
the PA date of the cost distribution line and has a status of Open or Future according
to the period status in Oracle General Ledger.
• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
- When you interface supplier costs from Oracle Purchasing and supplier costs and
expense reports from Oracle Payables, Oracle Project Costing copies the GL date for
each distribution line from the GL date entered for the distribution in Oracle
Purchasing or Oracle Payables.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 45
Expenditure Item Date Accounting

Expenditure Item Date Accounting

With expenditure item date accounting, you maintain both PA periods and GL period statuses
for project transactions in Oracle Project Costing. Oracle Project Costing derives PA dates and
GL dates independently, and does not set the accounting dates to the end date of the
corresponding accounting period.
Expenditure Item Date Accounting Example
In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-
2007. The expenditure item date falls into the open SEP-07 PA period. The PA date is set to
the expenditure item date of 08-SEP-2007.
The GL period SEP-07 is also open for Oracle Project Costing. Oracle Project Costing sets the
GL date to expenditure item date of 08-SEP-2007.
Date Derivation
Project Accounting Date (PA Date)
• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
Adjustments

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 46
 - The PA date is set to the transaction expenditure item date if that date falls in a PA
period with a status of Open or Future. If the expenditure item date falls in a closed
PA period, then the PA date is set to the start date of the earliest open or future
enterable PA period that follows the expenditure item date.
• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
- The PA date is set to the transaction expenditure item date if that date falls in a PA
period with a status of Open or Future. If the expenditure item date falls in a closed
PA period, then the PA date is set to the start date of the earliest open or future
enterable PA period that follows the expenditure item date.
Oracle General Ledger Accounting Date (GL Date)
• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
Adjustments
- The GL date is set to the transaction expenditure item date if that date falls in a GL
period with a status of Open or Future according to the period status in Oracle Project
Costing. If the expenditure item date falls in a closed GL period, then the GL date is
set to the start date of the earliest open or future enterable GL period that follows the
expenditure item date.
• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
- When you interface supplier costs from Oracle Purchasing and supplier costs and
expense reports from Oracle Payables, Oracle Project Costing copies the GL date for
each cost distribution line from the GL date entered for the distribution line in Oracle
Purchasing or Oracle Payables.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 47
Expenditure Item Date Accounting with Common Accounting
Periods

Expenditure Item Date Accounting with Common Accounting Periods

This method uses expenditure item date accounting and date derivation features with the
Maintain Common PA and GL Periods implementation option. You maintain GL period
statuses for project transactions in Oracle Project Costing and the system automatically
maintains PA Periods. To use this method, you must define identical PA periods and GL
periods. Oracle Project Costing derives a GL date for each transaction and copies the value to
the PA date.
Expenditure Item Date Accounting with Common Accounting Periods Example
In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-
2007. The expenditure item date falls into the SEP-07 GL period. While SEP-07 is still open in
Oracle General Ledger, the GL period for project transactions status is Closed in Oracle Project
Costing. Because this GL period is closed for project transactions, Oracle Project Costing sets
the GL date to 01-OCT-2007, the start date of the OCT-07 GL period. OCT-07 is the earliest
open or future enterable GL period for project transactions that follows the expenditure item
date. It then copies the PA date from the GL date.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 48
Date Derivation
Project Accounting Date (PA Date)
• Oracle Project Costing copies the PA date from the GL date.
Oracle General Ledger Accounting Date (GL Date)
• Oracle Project Costing uses the Expenditure Item Date Accounting logic.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 49
Sweeping Transaction Accounting Events

Sweeping Transaction Accounting Events

During the period-end closing cycle, you can choose to close the period without accounting for
all accounting events. The program PRC: Sweep Transaction Accounting Events enables you to
move accounting events that are in a closed GL period, and have errors or are not fully
accounted, to the next open GL period so that you can complete closing without accounting for
these transactions. This program changes the date on unaccounted transaction accounting
events to the first day of the next open GL period without accounting for them.
After the program sweeps the transaction accounting events, it also changes the GL date on the
cost and revenue distribution lines associated with the accounting events to the first day of the
next open GL period.
When budgetary control is enabled for a project, this program also updates unaccounted
project-related commitment transaction accounting events for project-related documents in
Oracle Purchasing and Oracle Payables. The program updates the GL date that the system uses
when it creates the reversing encumbrance accounting entries.
The following conditions can cause a transaction to become eligible for sweeping:
• The transaction has accounting events with errors.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 50
 • The transaction has been accounted in draft mode but not in final mode in Oracle
Subledger Accounting.
• The transaction has unprocessed accounting events.
When you submit the program, you can choose to run it in either review mode or update mode.
Use review mode to view all transactions with exceptions and the reasons for the exceptions.
At this point, you can address the exceptions and run the program PRC: Create Accounting in
final mode to complete the accounting for the transaction. Alternatively, if you do not want to
correct the exceptions at this time, run the sweep transaction accounting events program in
update mode to change the dates on the unaccounted accounting events to the first day of the
next open GL period.
Upon completion, the sweep transaction accounting events program generates an output report
that shows the results of the program.
Note: If you sweep revenue transactions, and you use Project Status Inquiry, Project
Performance Reporting, or Oracle Daily Business Intelligence for Projects, then you must run
the appropriate refresh or update programs so that reporting tool accurately reports the GL
period. For additional information, see Oracle Projects Fundamentals.
Note: Before you sweep transaction accounting events, consider the impact on other related
processing such as burden cost accounting, asset capitalization, allocations, and non-CIP
assets. For example, if the raw cost for a transaction is successfully accounted and the
transaction accounting event for the burden cost is in error, then when you sweep transaction
accounting events to the next period, you can end up with the raw cost posted to one period and
burden cost posted to the following period.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 51
Summary

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Processing

Chapter 5 - Page 52
 Accounting for Costs
Chapter 6

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 2
Accounting for Costs

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 5
Overview of Accounting for Costs

Overview of Accounting for Costs

Oracle Project Costing creates accounting transactions throughout its business cycle. You can
use AutoAccounting to specify how to determine the correct account for each transaction.
Oracle Project Costing generates accounting events and creates accounting for the accounting
events in Oracle Subledger Accounting. Oracle Project Costing predefines setup in Oracle
Subledger Accounting so that the create accounting program accepts default accounts from
AutoAccounting without change. If you define your own detailed accounting rules in Oracle
Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts, or
individual segments of accounts, that Oracle Project Costing derives using AutoAccounting.
The Account Generator uses Oracle Workflow to derive default account code combinations.
Oracle Payables and Oracle Purchasing use the Account Generator to determine the default
account code combinations for purchasing requisitions, purchase orders, supplier invoices, and
expense reports based on the project information entered. AutoAccounting, the Account
Generator, and Oracle Subledger Accounting each provide functionality to create accounting
for project-related supplier costs and expense reports. When you implement Oracle Purchasing
and Oracle Payables integration with Oracle Project Costing, carefully consider how to set up
the account derivation logic in each location.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 6
AutoAccounting

AutoAccounting
When you implement AutoAccounting, you define the rules governing which general ledger
accounts Oracle Project Costing uses under which circumstances. Oracle Project Costing uses
the rules you define whenever it performs an accounting transaction.
The AutoAccounting feature requires that you allow dynamic insertion of new account
combinations. You must define your Accounting Flexfield structure with the Allow Dynamic
Inserts options enabled.
Note: If you set up your own rules in Oracle Subledger Accounting, then you still set up
AutoAccounting so that Oracle Project Costing can determine valid default accounts. The
AutoAccounting setup enables programs, such as programs that distribute costs and generate
cost accounting events, to determine the default accounts that Oracle Project Costing sends to
Oracle Subledger Accounting. For example, if use total burdened cost accounting and set up
your own rules in Oracle Subledger Accounting, then you also need to define AutoAccounting
for total burdened costs so Oracle Project Costing can minimally determine a default debit and
credit accounts.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 7
AutoAccounting Rules

AutoAccounting Rules
AutoAccounting rules are formulas (or methods) that you use to derive each segment within
your account structure based on the type of transaction. Each rule can use one of three
intermediate value sources to derive the account segment:
• Constant value
- Supply a single valid segment value.
• Parameter
- Context-sensitive intermediate value that requires a lookup set.
• SQL select statement
- Execute an SQL select statement to retrieve a value; make the rule dependent on
multiple values and conditional statements.
To implement AutoAccounting, you define AutoAccounting rules to generate account
combinations. You then assign a set of rules to each AutoAccounting transaction you want to
use for your company.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 8
AutoAccounting Rule Mapping

AutoAccounting Rule Mapping

Each AutoAccounting rule you define supplies one Accounting Flexfield segment value at a
time. Thus, you need to specify one AutoAccounting rule for each segment in your Accounting
Flexfield, for each AutoAccounting transaction you want to use. Some of the AutoAccounting
rules you define can be quite simple, such as always supplying a constant company code or
natural account. Others can draw upon context information (parameters), such as the
expenditure type of an expenditure item or the organization that owns a particular non-labor
resource. You can use multiple parameters to provide a segment value. You can reuse the same
AutoAccounting rules for many different functions and their transactions.
For each rule that you define, only one segment value within the entire account structure is
supplied at a time. Thus, you specify one AutoAccounting rule for each segment in your
account structure for each AutoAccounting transaction.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 9
Constant Value

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

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 10
Parameter Value

Parameter Value
When you define an AutoAccounting rule, you can use a predefined parameter as an input
value. Examples of parameters that you can use as context information include the project-
owning organization or the expenditure type of an expenditure item. Oracle Project Costing
predefines the available parameters.
AutoAccounting enables you to use the AutoAccounting parameters as inputs for your
AutoAccounting rules. Not all of the parameters are available for all functions. The Customer
ID and the Customer Name parameters are available for cross charge functions only.
Submit the AutoAccounting Functions Listing for a complete listing of all of the parameters
available for each function.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 11
SQL Select Statement Value

SQL Select Statement Value

A SQL select statement value enables you to execute a SQL select statement to retrieve an
intermediate value. You can make the rule dependent on multiple values and conditional
statements. SQL statements are intended to process rules that depend on more than one
parameter. You can define rules to read any value by using a SQL select statement. You should
consider the performance implications of using SQL statements. For example:
IF the project type is overhead,
THEN use the expenditure organization parameter.
ELSE use the project organization parameter.
Although many companies have implemented AutoAccounting SQL statement rules in a
production environment, you should tune your SQL statement and test the AutoAccounting
setup against volume data to check their performance quality before implementation.
AutoAccounting rules with SQL statements are intended to process rules that are dependent on
more than one parameter. They are not intended to derive additional parameters using SQL that
accesses application tables. This type of use can affect processing performance and may not be
supported based on the AutoAccounting function.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 12
Lookup Sets

Lookup Sets
A lookup set is an implementation-defined list that corresponds to the account segments. To
define a lookup set, you specify pairs of values. For each intermediate value, you specify a
corresponding account segment value. One or more related pairs of intermediate values and
segment values form a lookup set. When you define lookup sets, lists of values are not
available.
You need to define a lookup set before you can use it in a rule. However, if you prefer to
define your rules before completing your lookup sets, you can define each lookup set’s name
and description and then define the intermediate values and segment values later.
If AutoAccounting does not find a matching intermediate value in the lookup set, then it
provides an error message (Incomplete AutoAccounting Rules) to notify you that it could not
build an Accounting Flexfield combination. You must correct your AutoAccounting setup and
resubmit the program that triggered the AutoAccounting error. If AutoAccounting does not
find a matching segment value in the lookup set, then it provides an error message (Invalid
Accounting Flexfield) to notify you that it could not build a valid Accounting Flexfield
combination. You must correct your AutoAccounting setup and resubmit the program that
triggered the AutoAccounting error.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 13
 Descriptive Flexfields on Setup Entities
You can use the descriptive flexfield attributes to store values used in AutoAccounting instead
of maintaining lookup sets for entities. These entities include:
• Agreement types
• Budget entry methods and budget types
• Class categories and class codes
• Compensation rule sets
• Event types
• Expenditure categories and expenditure types
• Burden cost codes
• Lookup sets
• Non-labor resources and non-labor resource organizations sources
• Project role types
• Transaction sources

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 14
Selecting a Segment Value Source

Selecting a Segment Value Source

After you specify an intermediate value, you specify one of the following segment value
sources to indicate whether the intermediate value is already a valid segment value or whether
AutoAccounting needs to translate it into a segment value using a lookup set:
• Intermediate Value
- Supply the intermediate value as a segment value; do not use a lookup set.
• Segment Value Lookup Set
- Look up the intermediate value in a lookup set; translate the intermediate value into
the corresponding segment value.
You do not always need to use a lookup set when you write an AutoAccounting rule. If you
define a simple constant rule, then you do not need to use a lookup set to supply a segment
value because you generally supply a valid segment value as the constant.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 15
Assign Rules

Assign Rules
Function
For each accounting transaction, you define rules to determine the appropriate account to
charge. Each accounting transaction is identified by an AutoAccounting function.
AutoAccounting functions are components of programs that you submit to generate accounting
entries.
Function Transactions
When you are assigning rules to an AutoAccounting function, you can assign different rules to
different conditions. For example, you can account for indirect projects using one set of rules,
and use two different sets of rules for billable items and non-billable items on contract projects.
Oracle Project Costing provides function transactions for each function which identify
commonly used conditions. You can assign rules to function transactions for each
AutoAccounting function. Complete the following steps to assign AutoAccounting rules to
AutoAccounting functions and function transactions:
• Enable each function transaction you want to use.
• For each function transaction you enable, specify an AutoAccounting rule for each
segment of your Accounting Flexfield.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 16
 Assign rules to function transactions to tell Oracle Project Costing which AutoAccounting
rules to use under which circumstances. In cases where an AutoAccounting function consists
of several distinct function transactions, you assign rules to each function transaction that you
want to use. These rule assignments determine which account AutoAccounting uses to process
that function transaction. Oracle Project Costing attempts to use the most appropriate function
transaction. If you have not enabled that function transaction, then it tries to use the next most
appropriate transaction. Oracle Project Costing continues this process until it finds an enabled
function transaction.
Segment Rule Pairings
After you enable a function transaction, you match each segment in your Accounting Flexfield
with the appropriate AutoAccounting rule. For example, if you have a two-segment
Accounting Flexfield containing a Company segment and an Account segment, you assign one
rule to the Company segment and one rule to the Account segment. You use the Assign
AutoAccounting Rules window to enable AutoAccounting function transactions and assign
rules to them.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 17
Guided Demonstration - Define a Lookup Set
Define a Lookup Set

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the AutoAccounting Lookup Sets window.

• (N) Setup > AutoAccounting > Lookup Sets

3. Enter lookup set header information as specified in the following table:

Field Value
Name XXExpCat/Indirect Cost Account
Description Uses expenditure category to look up indirect cost account values.

4. Enter Segment Value Lookups as specified in the following table:

Intermediate Value Segment Value

Chargebacks 7750
Expenses 7699
Labor 7580
Other Expenses 7740
Overhead 7740
Travel 7699

Note: Lists of values are not available when you define lookup sets.

You can map multiple intermediate values to the same segment value. This option enables
you to capture more detail in Oracle Project Costing than you need in Oracle Subledger
Accounting or Oracle General Ledger.

5. (I) Save

6. Close the AutoAccounting Lookup Sets window.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 18
Guided Demonstration - Define an AutoAccounting Rule
Define an AutoAccounting Rule

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the AutoAccounting Rule window.

• (N) Setup > AutoAccounting > Rules

3. Define a rule using the lookup set you created in the previous demonstration.

• Enter the values as specified in the following table:

Field
Rule Name
Description
Intermediate Value: Source
Intermediate Value: Value
Segment Value: Source
Segment Value: Lookup Set
Value
XX Indirect Cost Account Rule
Derives the default debit account for the indirect cost
account based on expenditure category.
Parameter
Expenditure Category
Lookup Set
XXExpCat/Indirect Cost Account

• Optionally, use the Lookup Set button to review the lookup set values.

4. (I) Save

5. Close the AutoAccounting Rule window.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 19
Practice - Define an AutoAccounting Rule
Overview
In this practice, you will define a rule for use in AutoAccounting. Your company uses the
expenditure organization associated with an expenditure item to determine what department to
charge. You will define an AutoAccounting rule for this business scenario.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define an AutoAccounting Rule

Define a rule for AutoAccounting that uses the expenditure organization to determine the
account value. Name your rule XX Exp Org to Department Rule.

Your implementation team previously defined a lookup set that maps organizations to accounts.
Use the lookup set Organization to Department Value in your rule. Review the lookup set as you
define the rule.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 20
Solution - Define an AutoAccounting Rule
Define an AutoAccounting Rule

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the AutoAccounting Rule window.

• (N) Setup > AutoAccounting > Rules

3. Enter the values as specified in the following table:

Field
Name
Description
Intermediate Value: Source
Intermediate Value: Value
Segment Value: Source
Segment Value: Lookup Set
Value
XX Exp Org to Department Rule
Enter a brief description
Parameter
Expenditure Organization
Lookup Set
Organization to Department Value

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 21
4. (I) Save

5. Review the lookup set.

• (B) Lookup Set

• Review the lookup set values.

6. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 22
Guided Demonstration - Assign AutoAccounting Rules
Assign AutoAccounting Rules

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Assign AutoAccounting Rules window.

• (N) Setup > AutoAccounting > Assign Rules

3. Find the AutoAccounting function.

• Select Labor Cost Account in the Name field.

• (B) Find

4. In the Function Transactions region, scroll down and select the function transaction Indirect,
All.

IMPORTANT: For this demonstration, do not enable the function transaction. Oracle
Project Costing does not use disabled function transactions during processing. Caution
students not to modify AutoAccounting rule assignments during class. Modifying
AutoAccounting can affect the processing of future demonstrations and practices.

5. With Indirect, All selected, enter the Segment Rule Pairings as specified in the following
table:

Number Segment Name Rule Name

0 Services Company Company Default Rule
1 Services Department Exp Org to Dept Rule
2 Services Account XX Indirect Cost Account Rule
3 Services Product Product Default Rule

• Optionally, select the Rule button to review each rule.

6. (I) Save

7. Close the Assign AutoAccounting Rules window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 23
Agenda

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 24
AutoAccounting for Costs Implementation Steps

AutoAccounting for Costs Implementation Steps

Oracle Project Costing uses AutoAccounting to generate default accounting for cost
transactions. When you implement AutoAccounting, you define rules that determine accounts
that Oracle Project Costing assigns to transactions to meet your business requirements. You
can optionally define your detailed accounting rules in Oracle Subledger Accounting. If you
define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites default accounts, or individual segments of accounts, that
Oracle Project Costing derives using AutoAccounting.
Note: If you set up your own rules in Oracle Subledger Accounting, then you still set up
AutoAccounting so that Oracle Project Costing can determine valid default accounts. The
AutoAccounting setup enables programs, such as programs that distribute costs and generate
cost accounting events, to determine the default accounts that Oracle Project Costing sends to
Oracle Subledger Accounting. For example, if use total burdened cost accounting and set up
your own rules in Oracle Subledger Accounting, then you also need to define AutoAccounting
for total burdened costs so Oracle Project Costing can minimally determine a default debit and
credit accounts.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 25
Accounting for Labor Costs

Accounting for Labor Costs

Oracle Project Costing uses the Labor Cost Account and the Labor Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Straight
Time and Overtime expenditure type classes.
Labor Cost Account Function
When you run PRC: Distribute Labor Costs or PRC: Distribute Labor Costs for a Range of
Projects, Oracle Project Costing calculates labor cost amounts based upon employee labor cost
overrides and labor costing rules. After calculating labor costs, Oracle Project Costing uses the
Labor Cost Account transactions to debit a default expense account for raw labor costs.
Labor Cost Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Labor Cost process category,
the program credits a default payroll clearing liability account to balance the labor expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.
You can assign different sets of rules to and enable the Contingent Worker Labor and
Employee Labor function transactions to generate a different default clearing account based on
the person type. Alternatively, you can assign rules to and enable only the All Labor function
transaction to use the same rules for employees and contingent workers.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 26
Accounting for Expense Report Costs

Accounting for Expense Report Costs

Oracle Project Costing uses the Expense Report Cost Account function to determine the
expense default debit account for transactions associated with the Expense Reports expenditure
type class.
Expense Report Cost Account Function
When you run PRC: Distribute Expense Report Adjustments, Oracle Project Costing calculates
and distributes costs originating from expense report adjustments, and uses the Expense Report
Cost Account function transactions to determine which default expense account to debit for
expense report costs.
Expense Report Adjustment Liability Account
When you run PRC: Generate Cost Accounting Events for the Supplier Cost process category,
the program credits a default supplier cost liability account to balance the supplier cost expense
account. If you specify a default account in Oracle Project Costing implementation options,
then the program uses the Default Supplier Cost Credit Account. Otherwise, you must set up
Oracle Subledger Accounting to derive the account. The program also generates cost
accounting events in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 27
Accounting for Usage Costs

Accounting for Usage Costs

Oracle Project Costing uses the Usage Cost Account and the Usage Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Usages
expenditure type class.
Usage Cost Account Function
When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
the Usage Cost Account transactions to debit a default expense account for raw usages costs.
Usage Cost Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Usage Cost process category,
the program credits a default asset usages liability account to balance the usages expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 28
Accounting for Miscellaneous Costs

Accounting for Miscellaneous Costs

Oracle Project Costing uses the Misc Trans Cost Account and the Misc Trans Cost Clearing
Account functions to determine the default cost accounting for transactions associated with the
Miscellaneous Transaction expenditure type class.
Miscellaneous Transaction Cost Account Function
When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
the Misc Trans Cost Account transactions to debit a default expense account for raw
miscellaneous costs.
Miscellaneous Transaction Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Miscellaneous Cost process
category, the program credits a default miscellaneous cost liability account to balance the
miscellaneous cost expense account. The program also generates cost accounting events in
Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 29
Accounting for Burden Transactions

Accounting for Burden Transactions

Oracle Project Costing uses the Burden Cost Account and the Burden Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Burden
Transaction expenditure type class.
Burden Cost Account Function
When you run PRC: Create and Distribute Burden Transactions, Oracle Project Costing uses
the Burden Cost Account transactions to debit a default expense account for the burden costs.
Burden Cost Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Burden Cost process category,
the program credits a default burden cost liability account to balance the burden cost expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 30
Accounting for Total Burdened Cost

Accounting for Total Burdened Cost

Oracle Project Costing uses the Total Burdened Cost Debit and the Total Burdened Cost Credit
functions to determine the default cost accounting for total burdened costs.
Total Burdened Cost Debit/Credit
When you run PRC: Distribute Total Burdened Cost, Oracle Project Costing creates two
burdened cost distribution lines for the total burdened cost. One distribution line holds the
default account for the burdened cost debit and the other distribution line holds the default
account for the burdened cost credit. Oracle Project Costing creates these two distributions for
all expenditure items charged to projects which are defined to burden costs.
The Total Burden Costs Debit/Credit function consists of the following functions:
• Total Burdened Cost Debit
• Total Burdened Cost Credit

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 31
Accounting for WIP and Inventory Costs

Accounting for WIP and Inventory Costs

Oracle Project Costing uses the WIP Cost Account and the WIP Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Work in
Process (WIP) expenditure type class. In addition, Oracle Project Costing uses the Inventory
Cost Account and the Invent. Cost Clearing Account functions to determine the default cost
accounting for transactions associated with the Inventory expenditure type class.
WIP Cost Account Function
When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
the WIP Cost Account transactions to debit a default expense account for raw work in process
costs.
WIP Cost Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Work in Process Cost process
category, the program credits a default work in process cost liability account to balance the
work in process expense account. The program also generates cost accounting events in Oracle
Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 32
 Inventory Cost Account Function
When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
the Inventory Cost Account transactions to debit a default expense account for raw inventory
costs.
Invent. Cost Clearing Account Function
When you run PRC: Generate Cost Accounting Events for the Inventory Cost process category,
the program credits a default inventory cost liability account to balance the inventory expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 33
Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments

When you enter project-related supplier invoices in Oracle Payables or receipt accruals in
Oracle Purchasing, Oracle Payables or Oracle Purchasing invokes the Account Generator in
real time. The Account Generator derives the Accounting Flexfield values based on project
information in much the same way that AutoAccounting works in Oracle Project Costing
programs. After you interface supplier costs to Oracle Project Costing, you can adjust the
supplier cost expenditure items in Oracle Project Costing. Oracle Project Costing processes
these supplier invoice adjustments using the Supplier Invoice Cost Account AutoAccounting
function.
Supplier Invoice Cost Account Function
Oracle Project Costing uses the Supplier Invoice Cost Account function to debit the
appropriate default expense account for supplier cost adjustments (includes adjustments to
expenditure items from invoices, receipts, and payments).
When you run PRC: Distribute Supplier Cost Adjustments or PRC: Distribute Supplier Cost
Adjustments for a Range of Projects, Oracle Project Costing uses the Supplier Invoice Cost
Account function to debit a default expense account for raw supplier costs.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 34
 Supplier Cost Adjustment Credit Account
When you run PRC: Generate Cost Accounting Events for the Supplier Cost process category,
the program credits a default supplier cost liability account to balance the supplier cost expense
account. If you specify a default account in Oracle Project Costing implementation options,
then the program uses the Default Supplier Cost Credit Account. Otherwise, you must set up
Oracle Subledger Accounting to derive the account. The program also generates cost
accounting events in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 35
Listings

Listings
• IMP: AutoAccounting Functions - For each function, this report displays all of the
possible parameters that AutoAccounting rules use to derive key flexfield segment values.
The report also shows you all of the transactions related to the AutoAccounting function
and whether each transaction is enabled or disabled.
• IMP: AutoAccounting Lookup Sets - For each AutoAccounting lookup, this report
prints each possible intermediate value and its corresponding segment value.
• IMP: AutoAccounting Rule Definitions - For each AutoAccounting rule, this report
displays the type of its intermediate source and the corresponding value for that source. If
the intermediate value source is a SQL statement, this report displays the text of that
statement. This listing also includes the segment value source that maps an intermediate
value to the final segment value. If the segment value source is a lookup set, then this
report displays the name of that lookup set.
• IMP: AutoAccounting Segment Rule Pairings - For each function, this report displays
each of the function’s transactions. It also lists the AutoAccounting rule and key flexfield
segment pairings for each transaction. This report also displays the function’s transactions
without paired segments and rules.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 36
Agenda

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 37
Account Generator

Account Generator
The Account Generator uses Oracle Workflow to derive default account code combinations.
Oracle Payables and Oracle Purchasing use the Account Generator to determine the default
account code combinations for purchasing requisitions, purchase orders, supplier invoices, and
expense reports based on the project information entered. You define functions and processes
to derive the Accounting Flexfield combinations. You can optionally customize the Account
Generator for each set of defined ledgers.
Oracle Purchasing
Oracle Purchasing uses item types to generate account numbers for all requisitions and
purchase orders, whether they are project-related or not. Oracle Purchasing provides a set of
default account generator processes for the accounts it needs to build. Oracle Purchasing
provides default account generator processes. To derive the accounts based on project
information, you must change the default processes so that they use the project information.
For more information, see the “Oracle Purchasing User’s Guide.”

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 38
 Oracle Payables
How the Account Generator generates default charge accounts for invoices and expense reports
depends on whether you are entering an invoice or expense report that contains project and task
information:
• Supplier invoices
- Oracle Payables (Invoices window) calls the Project Supplier Invoice Account
Generator.
• Oracle Internet Expenses and Oracle Payables expense reports
- Oracle Internet Expenses or Oracle Payables calls the Project Expense Report
Account Generator.
PA: Allow Override of PA Distributions in AP/PO
You use the profile option PA: Allow Override of PA Distributions in AP/PO to control
whether users can override the account number that the Account Generator derives for project-
related distributions. Settings for this profile options are:
• Yes - User is allowed to update and override the generated Account.
• No - User is not allowed to update and override the generated Account.
• (No Value) - Equivalent to Yes.
For more information regarding the Account Generator and Oracle Project Costing, see the
Oracle Projects Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 39
Account Generator Terminology

Account Generator Terminology

The Account Generator uses Oracle Workflow to derive default account code combinations.
AutoAccounting determines default account combinations for all other project-related
transactions.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 40
Implementing Accounting for Project-Related Supplier Costs and
Expense Reports

Implementing Accounting for Project-Related Supplier Costs and Expense

Reports
AutoAccounting, the Account Generator, and Oracle Subledger Accounting each provide
functionality to create accounting for project-related supplier costs and expense reports. When
you implement Oracle Purchasing and Oracle Payables integration with Oracle Project
Costing, you must carefully consider how to set up the account derivation logic in each
location.
• Oracle Purchasing Account Generator (required) - Oracle Purchasing uses the
Account Generator to derive default debit accounts for project-related purchasing
documents.
• Project Supplier Invoice Account Generator (required) - Oracle Payables uses the
Account Generator to derive default debit accounts for project-related supplier invoices
that are not matched to a purchase order.
- Oracle Payables always uses the Account Generator for project-related invoices. You
must set up the Account Generator to generate a default account, even if the profile
option PA: Allow Override of PA Distributions in AP/PO. option is set to Yes.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 41
 - In addition, Oracle Project Costing uses the Account Generator to derive a default
debit account for supplier cost and expense report adjustments that you perform in
Oracle Project Costing. Oracle Project Costing uses this information to determine
whether to allow the adjustment when you enable Automatic Offsets in Oracle
Payables. Oracle Project Costing also uses this information to determine whether an
adjustment can potentially affect tax recoverability.
• Project Expense Report Account Generator (required) - Oracle Internet Expenses and
Oracle Payables (Invoices window) use the Account Generator to derive default debit
accounts for project-related expense reports. You set up the Account Generator when you
implement Oracle Payables.
• Supplier Invoice Cost Account AutoAccounting Function (required) - Oracle Project
Costing uses this AutoAccounting function to derive default debit accounts for supplier
cost adjustments that you perform in Oracle Project Costing.
• Expense Report Cost AutoAccounting Function (required) - Oracle Project Costing
uses this AutoAccounting function to derive default debit accounts for expense report
adjustments that you perform in Oracle Project Costing.
• Default Supplier Cost Credit Account Implementation Option (optional) - The
program PRC: Generate Cost Accounting Events uses the specified account as the default
credit account for supplier cost and expense report adjustments that you perform in Oracle
Project Costing.
• User-defined Setup in Oracle Subledger Accounting for Supplier Cost Adjustments
(optional) - Oracle Project Costing predefines setup in Oracle Subledger Accounting so
that the create accounting program accepts the accounting for supplier cost and expense
report adjustments from Oracle Project Costing without change. You can optionally define
your own detailed accounting rules in Oracle Subledger Accounting.
- If you allow adjustments to supplier costs in Oracle Project Costing and you do not
define a default supplier cost credit account in Oracle Project Costing implementation
options, then you must set up Oracle Subledger Accounting to derive the credit
account for supplier cost adjustments.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 42
Agenda

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 43
Encumbrance Accounting and Project Budgets

Encumbrance Accounting and Project Budgets

Oracle Projects creates project encumbrance entries when you enable top-down budget
integration for a project. Oracle Purchasing and Oracle Payables create encumbrance entries to
relieve the existing encumbrances and to create new encumbrance accounting entries. Oracle
Projects provides this setup in Oracle Purchasing and Oracle Payables so that these
applications can create encumbrance for burden costs.
Oracle Purchasing and Oracle Payables create encumbrance journals whenever any funds
related action is performed for a document. For example, when you perform a Check Funds
action for document, the encumbrance accounting events are processed to create the
encumbrance journals in draft mode. When you perform a Reserve Funds action for a
document, the encumbrance accounting events are processed to create the encumbrance
journals in final mode and the funds balances are updated. After processing is complete, you
can review the updated funds balances.
If you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites default accounts, or individual segments of accounts, that
Oracle Purchasing or Oracle Payables derives using the Account Generator.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 44
Project Budget Account Generation Workflow

Project Budget Account Generation Workflow

Oracle Project Costing uses the Project Budget Account Generation workflow process to
generate default accounts when a project budget is integrated with a non-project budget. You
must customize the Project Budget Account Generation workflow process to generate accounts
according to your business needs.
For additional information, see the lesson titled "Appendix B: Budgetary Controls and Budget
Integration."

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 45
Agenda

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 46
Overview of Oracle Subledger Accounting

Overview of Oracle Subledger Accounting

Oracle Subledger Accounting is an intermediate step between each of the subledger
applications and Oracle General Ledger. Oracle Subledger Accounting creates the final
accounting for subledger journal entries and transfers the accounting to Oracle General Ledger.
It stores a complete and balanced subledger journal entry in a common data model for each
business event that requires accounting.
Oracle Subledger Accounting provides a uniform approach to accounting and a common set of
tools that enable you to configure accounting rules for applications that require accounting. It
includes a common user interface and a set of programs that can generate accounting for
Oracle and non-Oracle applications.
When you set up rules in Oracle Subledger Accounting, you can define the types of lines,
descriptions, and accounts to store on journal entries. Oracle Subledger Accounting partitions
data by subledger application, while storing the information in a common model.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 47
Integration with Oracle Subledger Accounting

Integration with Oracle Subledger Accounting

Oracle Project Costing fully integrates with Oracle Subledger Accounting so that you can
create accounting for your project-related transactions.
Oracle Project Costing generates accounting events and creates the subledger accounting
entries for the accounting events. Oracle Project Costing predefines setup for Oracle Subledger
Accounting so Oracle Subledger Accounting accepts the default accounting information from
Oracle Project Costing without change. Oracle Subledger Accounting transfers the final
accounting to Oracle General Ledger. If you define your own detailed accounting rules in
Oracle Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts,
or individual segments of accounts, that Oracle Project Costing derives using AutoAccounting,
or the Project Budget Account Generation workflow for integrated budgets.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 48
Accounting Event Model Overview

Accounting Event Model Overview

Oracle Project Costing generates accounting events for the business events that it processes and
then creates subledger accounting entries for the accounting events.
For example, a business event takes place when an employee charges time to a project. After
you distribute costs for the labor expenditure items, you run PRC: Generate Cost Accounting
Events to generate accounting events. Next, you run PRC: Create Accounting to create
accounting entries for the accounting events in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 49
Accounting Event Model Overview

Accounting Event Model Overview

As the foundation of the event model, Oracle Project Costing predefines event entities. An
event entity enables Oracle Subledger Accounting to handle the accounting for similar business
events in a consistent manner. The three event entities are Expenditures, Budgets, and Revenue
(Oracle Project Billing).
Each event entity is associated with one or more event classes. An event class represents a
category of business events for a particular transaction type or document. Event classes group
similar event types and enable the sharing of accounting definitions.
An event type represents a business operation that you can perform for an event class. An
accounting event has both an event class and an event type that affect the subledger accounting
entries. Event types provide the lowest level of detail for storing accounting definitions.
Oracle Project Costing provides a predefined set of event classes and event types for each
accounting event entity. Oracle Project Costing also predefines accounting event class options
for each event class to specify the detailed information about the event class. For example, the
accounting event class options specify the general ledger journal category and the balance type
(actual, encumbrance, or budget) for each event class.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 50
Agenda

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 51
Oracle Subledger Accounting for Costs Implementation Steps

Oracle Subledger Accounting for Costs Implementation Steps

You can optionally set up your own accounting rules in Oracle Subledger accounting. For
additional information, see the Oracle Subledger Accounting Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 52
Oracle Subledger Accounting for Costs Implementation Steps
(continued)

Oracle Subledger Accounting for Costs Implementation Steps (continued)

You can optionally set up your own accounting rules in Oracle Subledger accounting. For
additional information, see the Oracle Subledger Accounting Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 53
Sources and Custom Sources

Sources and Custom Sources

Oracle Project Costing predefines a set of sources. Sources are pieces of information that
Oracle Subledger Accounting uses to determine how to create accounting for an accounting
event. Oracle Project Costing assigns the predefined sources to accounting attributes.
Accounting attributes are values that Oracle Subledger Accounting needs to successfully create
subledger journal entries. For example, for the event class Labor Cost, Oracle Project Costing
assigns the source Raw Cost to the accounting attribute Entered Amount. The program PRC:
Create Accounting uses the raw cost value from the labor cost distribution line to determine the
entered amount for the subledger accounting journal entry.
You can optionally define custom sources to extend the list of sources available to application
accounting definitions. To create custom sources, you write PL/SQL functions that use the
predefined sources and constant values as parameters. For example, if you capture the
geographic region to which each organization belongs in a descriptive flexfield segment, then
you can create a custom source to use the information in your application accounting
definitions. You use the expenditure organization (a predefined source) as a parameter in the
definition of the custom source. For information about how to define custom sources, see the
Oracle Subledger Accounting Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 54
Journal Entry Methods and Definitions

Journal Entry Methods and Definitions

Oracle Project Costing provides predefined accounting setup for Oracle Subledger Accounting.
If you use the predefined setup, then Oracle Subledger Accounting accepts the default accounts
from Oracle Project Costing without change. You can optionally define your own detailed
subledger accounting rules. Many different components come together to form the subledger
accounting setup:
• Subledger Accounting Method: A group of common application accounting definitions
that determines how Oracle Subledger Accounting processes accounting events. The
subledger accounting method groups application accounting definitions from subledger
applications such as Oracle Project Costing, Oracle Payables, Oracle Purchasing, and
Oracle Receivables. This grouping capability enables you to assign a set of application
accounting definitions collectively to a ledger.
• Application Accounting Definitions: Application accounting definitions are collections
of setup components for a subledger application that determine how Oracle Subledger
Accounting processes accounting events to create subledger and general ledger journal
entries. Application accounting definitions assign journal lines definitions to event class
and event type combinations.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 55
 • Journal Lines Definitions: Journal lines definitions group journal line types, account
derivation rules, and journal entry descriptions into a complete set of journal line types
within an event class or event type.
• Journal Line Types: Journal line types determine the characteristics of subledger journal
entry lines for an event class. These characteristics determine whether the line is used to
create actual, budget, or encumbrance entries, whether the line is a debit or a credit,
whether matching lines are merged, and whether data is transferred to the general ledger in
summary or detail form.
• Account Derivation Rules: Account derivation rules determine the Accounting Flexfield
values for subledger journal entries. You can define account derivation rules in Oracle
Subledger Accounting that generate either a value for a single Accounting Flexfield
segment or a complete Accounting Flexfield account code combination.
• Mapping Sets: Mapping sets enable you to assign a specific output value to an
Accounting Flexfield or Accounting Flexfield segment. You use mapping sets when you
set up account derivation rules. Account derivation rules determine the Accounting
Flexfield values for subledger journal entries.
• Journal Entry Description: The journal entry description determines both the content
and sequence in which the elements of the description appear. You assign journal entry
descriptions to headers and lines in the application accounting definition. Oracle
Subledger Accounting assigns the descriptions to the journal header and lines when it
creates the draft or final accounting.
For additional information, see the Oracle Subledger Accounting Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 56
Associating Subledger Accounting Methods and Ledgers

Associating Subledger Accounting Methods and Ledgers

You must assign a subledger accounting method to a ledger. Assigning different subledger
accounting methods to different ledgers enables you to create multiple accounting
representations of transactions.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 57
Post-Accounting Programs

Post-Accounting Programs
Subledger applications use post-accounting programs to transfer transaction data between
subledgers based on the accounting generated from the transaction data. Oracle Subledger
Accounting uses accounting classes to classify journal entry lines. The post-accounting
programs distinguish journal lines for processing based on the accounting class assigned to
each journal entry line.
Oracle Project Costing provides two post-accounting programs, one for debits and one for
credits, to obtain final accounting information from Oracle Subledger Accounting because the
accounting that Oracle Project Costing creates using AutoAccounting may not be the same as
the final accounting that Oracle Subledger Accounting transfers to Oracle General Ledger.
Oracle Project Costing uses post-accounting programs to determine which journal entry lines
to retrieve from Oracle Subledger Accounting when Oracle Project Costing performs the
following activities:
• Groups asset lines on capital projects
• Generates audit reports

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 58
 • Creates a reversing entry for expenditure items that you imported into Oracle Project
Costing from other applications, such as Oracle Purchasing, Oracle Payables, or Oracle
Inventory
• Creates a reversing entry for expenditure items when you split an expenditure item,
transfer an expenditure item, or change transaction attributes for an expenditure item (for
example, change whether the expenditure item is billable or capitalizable)
The predefined setup for the post-accounting programs consists of the program code and a list
of the accounting classes assigned to each respective program. If you modify the accounting
class for a journal line type, or add a new accounting class and journal line type pair, then you
must also update the accounting classes assigned to each of the predefined post-accounting
programs. This update ensures that the asset generation program, audit reports, and expenditure
item splits and transfers in Oracle Project Costing continue to work accurately.
Important: Do not add the same accounting class to both the debit and the credit journal line
types.
Important: Oracle Project Costing predefines post-accounting program assignments for the
PA Postaccounting Debit program and the PA Postaccounting Credit program. Do not remove
the predefined accounting classes even if you define your own journal lines definitions and add
accounting class assignments to the programs. In this case, Oracle Project Costing uses the
predefined accounting classes to process and report on existing historical journals and new
user-defined accounting classes that you add to process and report on new journals.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 59
Cross-Entity Balancing Rules

Cross-Entity Balancing Rules

Oracle Subledger Accounting uses intracompany balancing rules to create balancing lines on
journal entries between balancing segment values. You set up this functionality in the
Accounting Setup Manager in Oracle General Ledger. The Accounting Setup Manager
centralizes the common setup steps for the Oracle financial applications.
For example, if you define accounting rules for project costs that use the operating unit to
derive the account for your balancing segment, then transactions can have unbalanced entries
when you create transactions between two different operating units. To address this situation,
Oracle Project Costing sends the unbalanced entries to Oracle Subledger Accounting and
Oracle Subledger Accounting automatically creates debit and credit accounting lines to balance
the subledger journal entries by balancing segment. Oracle Subledger Accounting uses the
balancing accounts that you define for the ledger in the Accounting Setup Manager.
You must select the Enable Intracompany Balancing option in the ledger definition to enable
the application of the balancing rules. You also must set up the accounts to ensure that Oracle
Subledger Accounting generates the balancing journal entries. For information about cross-
entity balancing rules, including examples, see the Oracle Financials Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 60
Oracle Subledger Accounting Inquiries

Oracle Subledger Accounting Inquiries

You can query accounting events, journal entries, and journal entry lines based on multiple
selection criteria. You can use subledger accounting inquiries to:
• View information about an accounting event or journal entry error.
• View detailed information about the subledger journal entry headers for an accounting
event.
• Compare subledger journal entry information for any two journal entries.
• View subledger journal entry lines for multiple documents or transactions.
• View subledger journal entry in a t-account format.
• View transactions for an accounting event or journal entry.
When you view a transaction for a cost accounting event, Oracle Subledger Accounting drills
down to Oracle Project Costing and automatically opens and queries information in
expenditure inquiry. Similarly, you can drill down to other subledger applications to view
transaction information for the accounting events that originated in those applications.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 61
Audit Reports

Audit Reports
The Project Subledger Audit Reports print cost distribution lines related to projects. The
reports enable you to drill down from a GL account balance in the trial balance to the
individual project-related transactions.
• AUD: Project Subledger Summary - This report prints a summary of cost distribution
lines by project. The report includes subtotals for GL Account, Project Number,
Manufacturing-Related, and Expenditure Type Class.
• AUD: Project Subledger Detail by Project - This report shows cost distribution lines for
a single project by task.
• AUD: Project Subledger Detail by Expenditure Type - This report shows project
subledger detail across projects for one expenditure type.

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 62
Summary

Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 63
 Copyright © 2007, Oracle. All rights reserved.

Accounting for Costs

Chapter 6 - Page 64
 Implementing Non-Labor
Costing
Chapter 7

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 2
Implementing Non-Labor Costing

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 5
Implementing Non-Labor Costing

Implementing Non-Labor Costing

When you charge a usage expenditure item to a project, your must specify the non-labor
resource utilized and the non-labor resource organization that owns the resource. When you
define non-labor resources, you can choose only expenditure types with the Usages
expenditure type class.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 6
Non-Labor Costing Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 7
Defining Non-Labor Resources

Defining Non-Labor Resources

1. In the Non-Labor Resources window, enter the name, description, effective dates. Select
an expenditure type for each non-labor resource entered.
2. In the Organizations region, select the organizations to which the resource is assigned and
enter the effective dates. The organizations include any organization from your
organization hierarchy, regardless of whether the organization has the Project
Expenditure/Event Organization classification enabled and regardless of the effective
dates for the organization.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 8
Non-Labor Cost Rates

Non-Labor Cost Rates

An expenditure type cost rate is a currency amount that Oracle Project Costing multiplies by
the expenditure type unit to calculate cost. In the Expenditure Types window, select an
expenditure type and choose the Cost Rates button to enter a cost rate for it.
When you define an expenditure type, you specify whether cost rates are required. You can
only select the Cost Rates button for the expenditure type if you enable the Rate Required
option. You cannot change this setting after you save the expenditure type. Instead, you must
create a new expenditure type with a unique name and set the Rate Required option for it.
In a multi-organization environment, you set up expenditure types once and they are shared
across all operating units. However, the cost rates for expenditure types are specific to each
operating unit. You must define cost rates for each operating unit.
For additional discussion regarding defining expenditure types, see the lesson titled
“Implementing Expenditures.”

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 9
Non-Labor Cost Rate Overrides

Non-Labor Cost Rate Overrides

You define cost rate overrides in the Non-Labor Resources window. When you define non-
labor resources, you assign each non-labor resource an expenditure type. The cost rates you
define for an operating unit for the expenditure type apply to all non-labor resources with that
expenditure type.
You can optionally define non-labor cost rate overrides for non-labor resources. You define
each cost rate override by operating unit for a specific non-labor resource and organization
combination.
In a multi-organization environment, you set up non-labor resources once and share them
across all operating units, while you define cost rate overrides by operating unit.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 10
Practice - Define Non-Labor Resources
Overview
In this practice, you will define a non-labor resource. In a previous practice titled "Define an
Expenditure Type," you defined an expenditure type named XXMotor Pool Trucks. You must
now define non-labor resources that represent the two types of delivery trucks that the motor
pool maintains for other departments to use. For each non-labor resource, you will specify the
owning organization. You will enter a cost rate override for one of the non-labor resources.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Enter a Non-Labor Resource for Small Trucks

Define a non-labor resource named XXSmall Truck to select when a department is charged for
use of a small truck from the motor pool. Associate it with the XXMotor Pool Trucks expenditure
type that you defined in a previous practice. Assign the non-labor resource to the Shared Services
organization (motor pool is part of this organization).

Small trucks cost less to operate and maintain, so the motor pool does not charge other
organizations as much to use them. For the organization Vision Services, enter a cost rate
override of $100 USD a day for the remainder of this year and $125 USD a day for next year.

Enter a Non-Labor Resource for Large Trucks

Define a non-labor resource named XXLarge Truck to select e when a department is charged for
use of a large truck from the motor pool. Associate it with the XXMotor Pool Trucks expenditure
type that you defined in a previous practice. Assign the non-labor resource to the Shared
Services organization (motor pool is part of this organization).

Do not enter a cost rate override. Instead, Oracle Project Costing uses the cost rate of $250 USD
a day that you defined for the expenditure type.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 11
Solution - Define Non-Labor Resources
Enter a Non-Labor Resource for Small Trucks

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Non-Labor Resources window.

• (N) Setup > Expenditures > Non-Labor Resources

3. Enter Non-Labor Resource information as specified in the following table:

Field Value
Name XXSmall Truck
Description Enter a brief description
Expenditure Type XXMotor Pool Trucks
Equipment Resource Class Leave Blank
Effective Date From Today's Date
Effective Date To Leave Blank

4. With your new non-labor resource selected, enter an owning organization as specified in the
following table:

Name Effective Date From Effective Date To

Shared Services Today's Date Leave Blank

5. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 12
6. Enter cost rate override for Shared Services.

• Select Shared Services.

• (B) Cost Rates

• Enter cost rate override information for the remainder of this year as specified in the
following table:

Field Value
Operating Unit Vision Services
Currency USD (View Only)
Rate 100
UOM Day (View Only)
Effective Date From Today's Date
Effective Date To 31-DEC of the current year

• (I) Save

• (I) New

• Enter cost rate override information for next year as specified in the following table:

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 13
 Field Value
Operating Unit Vision Services
Currency USD (View Only)
Rate 125
UOM Day (View Only)
Effective Date From 01-JAN of next year
Effective Date To 31-DEC of next year

• (I) Save

7. Close the Cost Rate Overrides window and return to the Non-Labor Resources window.

Enter a Non-Labor Resource for Large Trucks

8. Place your cursor in the empty row below where you defined the XXSmall Truck non-labor
resource.

9. Enter Non-Labor Resource information as specified in the following table:

Field Value
Name XXLarge Truck
Description Enter a brief description
Expenditure Type XXMotor Pool Trucks
Equipment Resource Class Leave Blank
Effective Date From Today's Date
Effective Date To Leave Blank

10. With your new non-labor resource selected, enter an owning organization as specified in the
following table:

Name Effective Date From Effective Date To

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 14
 Shared Services Today's Date Leave Blank

11. (I) Save

Note: Do not enter a cost rate override. Instead, Oracle Project Costing uses the cost rate of
$250 USD a day that you defined for the expenditure type.

12. Close the Non-Labor Resources window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 15
Practice - Test Your Non-Labor Resources
Overview
In this practice, you will test the non-labor resources that you defined in a previous practice. You
will:

• Enter, submit, and release a usage expenditure batch.

• Run the cost distribution program for the batch.

• Verify the results in Expenditure Inquiry.

Your instructor can help you troubleshoot any issues that you encounter so that you can update
your setup and retest.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Enter and Process a Test Expenditure Batch

To validate that your setup is correct, you need to test the non-labor resources that you created in
the previous practice. First, enter an expenditure batch for the current week and name it XXTEST.
Select the Usages class.

Enter two expenditures for Amy Marlin as specified in the following tables:

Expnd Item Project Task Expnd Type Non-Labor Non-Labor

Date Number Number Resource Org
Today's Date XXCS 3.0 XXMotor Pool XXLarge Shared
Truck Services
Today's Date XXCS 3.0 XXMotor Pool XXSmall Shared
Truck Services

Work Type UOM Quantity Comment

Internal - capital Day 5 Enter a brief
comment
Internal - capital Day 10 Enter a brief
comment

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 16
Next, submit and release the batch. Run the program PRC: Distribute Usage and Miscellaneous
Costs to distribute the expenditure items. Ensure that you specify your expenditure batch and
project in the program parameters. Review the output report. If the report contains exceptions,
then research the issues, fix them, and rerun the distribution process to test the fix. If you
encounter missing cost rates exception, then verify that the cost rate is set up properly on the
XXMotor Pool expenditure type.

Review the Results

Query the expenditure items in Expenditure Inquiry and verify that they are cost distributed. Use
folder tools to display the fields that show the raw cost rate and project functional raw costs to
validate the cost rates for the small and large trucks non-labor resources.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 17
Solution - Test Your Non-Labor Resources
Enter and Process a Test Expenditure Batch

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Expenditure Batches window.

• (N) Expenditures > Pre Approved Batches > Enter

3. Enter the batch information as specified in the following table:

Field Value
Operating Unit Vision Services
Batch Name XXTEST
Ending Date This Sunday's Date
Class Usages
Description Usages
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Option Not Available
Control Totals Leave Blank
Control Count Leave Blank

4. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 18
5. (B) Expenditures

6. Enter the expenditure information as specified in the following table:

Employee Name Employee Organization Expnd Ending

Number Date
Marlin, Ms. Amy 34 Services-East This Sunday's Date

7. Enter the expenditure items for Amy Marlin as specified in the following tables:

Expnd Item Project Task Expnd Type Non-Labor Non-Labor

Date Number Number Resource Org
Today's Date XXCS 3.0 XXMotor Pool XXLarge Shared
Truck Services
Today's Date XXCS 3.0 XXMotor Pool XXSmall Shared
Truck Services

Work Type UOM Quantity Comment

Internal - capital Day 5 Enter a brief
comment
Internal - capital Day 10 Enter a brief
comment

8. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 19
9. Close the Expenditures window and return to the Expenditure Batches window.

10. (B) Submit

11. (B) Release

12. Close the Expenditure Batches window and return to the Navigator.

13. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

14. Select to run a Single Request.

15. (B) OK

16. Select the program PRC: Distribute Usage and Miscellaneous Costs from the list of values
in the Name field and Vision Services for the operating unit.

17. Define the parameters for the program as specified in the following table:

Field Value
Expenditure Batch XXTEST
Project Number XXCS

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 20
18. (B) OK

19. (B) Submit

• Note your Request ID __________________________

20. (B) No in the Decision dialog box

21. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

22. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

23. Review the output report.

• (B) View Output

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 21
 If the report contains exceptions, then research the issues, fix them, and rerun the
distribution process to test the fix. If you encounter missing cost rates exception, then verify
that the cost rate is set up properly on the XXMotor Pool expenditure type.

24. Close the output page and the Requests window.

Review the Results in Expenditure Inquiry

25. Responsibility = Projects, Vision Services (USA)

26. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

27. Query the expenditure items from the XXTEST expenditure batch for task 3.0 on your
project.

• Enter the header find criteria::

− Project Number = XXCS
− Project Name = XX Capital Services
− Task Number = 3.0
− Task Name = Project Management

• (T) Expenditure

• Enter expenditure find criteria:

− Expenditure Batch = XXTEST

• (B) Find

28. Show the raw cost rate field.

• Place your cursor in the Quantity column.

• (M) Folder > Show Field

• Select Raw Cost Rate.

• (B) OK

29. Show the project functional raw cost field.

• Place your cursor in the Raw Cost Rate column.

• (M) Folder > Show Field

• Select Project Functional Raw Cost.

• (B) OK

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 22
30. Drag the Non-Labor Resource column to the position next to the Project Functional Raw
Cost column.

31. Review the raw cost rates.

32. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 23
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 24
Listings

Listings
Use the following concurrent programs to document non-labor resource setup information:
• IMP: Expenditure Cost Rates - Use the IMP: Expenditure Cost Rates listing to review
the non-labor expenditure cost rates. You can print a listing for one or all expenditure
categories, one or all expenditure types, or for a specified effective date. If an effective
date is specified for the report, then the report lists only expenditure cost rates that are
active as of the date you enter.
• IMP: Non-Labor Resources by Organization - Use the IMP: Non-Labor Resources by
Organization listing to review all non-labor resources associated with a particular
organization, expenditure category, or expenditure type. For each organization listed, this
report displays the organization’s non-labor resources and the corresponding expenditure
types and expenditure categories.

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 25
Summary

Copyright © 2007, Oracle. All rights reserved.

Implementing Non-Labor Costing

Chapter 7 - Page 26
 Implementing Labor Costing
Chapter 8

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 2
Implementing Labor Costing

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 5
Labor Costing Implementation Steps

Labor Costing Implementation Steps

When you import or enter labor costs into Oracle Project Costing as a quantity of hours, the
cost distribution program determines how to calculate the raw cost of the labor. To accomplish
this, within Oracle Project Costing you can maintain labor cost rate schedules by employee or
by job or use a labor costing extension to calculate the cost. You also have the option of
overriding labor cost rates for individual employees. When you run the program PRC:
Distribute Labor Costs or the program PRC: Distribute Labor Costs for a Range of Projects,
the program uses the cost rates to determine the raw cost for each uncosted labor expenditure
item. You can also define a method for calculating overtime cost.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 6
Define Labor Costing Multipliers

Define Labor Costing Multipliers

A labor costing multiplier is a value by which Oracle Project Costing multiplies an employee’s
labor cost rate to calculate the employee’s overtime premium cost rate:
• Labor Cost Rate * Labor Cost Multiplier = Overtime Premium Labor Cost Rate
Oracle Project Costing then multiplies this overtime premium labor cost rate by the number of
overtime hours an employee works to calculate the overtime premium for that employee:
• Overtime Premium Labor Cost Rate * OT Hours = Overtime Premium
You define a labor cost multiplier for each kind of overtime your business uses, such as double
time, or time and a half. For example, if you pay an employee double time for all overtime
hours, then define a labor cost multiplier of 1.0. You multiply the employee’s labor cost rate by
1.0 to calculate the employee’s overtime premium labor cost rate. If you pay an employee time
and a half for all overtime hours, then define a labor cost multiplier of 0.5 to calculate the
employee’s overtime premium labor cost rate. An employee’s total labor cost is the overtime
premium plus the total number of hours that employee worked multiplied by the employee’s
labor cost rate:
• Overtime Premium + (Total Hours x Labor Cost Rate) = Total Labor Cost

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 7
Labor Costing Rules

Labor Costing Rules

You define a labor costing rule for each pay type your business uses. For example, you can
define a labor costing rule for pay types such as exempt, non-exempt, uncompensated,
compensated, or hourly. When an employee charges time to a project, Oracle Project Costing
processes the labor hours according to the employee’s labor costing rule.
To define a labor costing rule:
1. Enter a unique rule name and select a costing method.
- Costing methods determine how Oracle Project Costing calculates labor costs:
- Rates: When you select Rates, Oracle Project Costing calculates the labor costs
for entered hours using hourly cost rates.
- Extension: When you select Extension, labor costs are calculated by the labor
costing extension. When you use this option, you are not required to maintain
hourly cost rates in Oracle Project Costing.
2. If the overtime calculation extension creates overtime hours, then you can select the
Overtime Trans Defaults button and specify a default project and task by operating unit
for system-generated expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 8
 3. Enter the Effective Dates during which the labor costing rule is valid.
4. Assign cost multipliers to overtime expenditure types.
- Enter this information if your employees enter overtime hours manually. When you
select a costing method of Rates and a transaction is charged to an expenditure type
that has an assigned multiplier, then the distribution program applies the multiplier as
it calculates labor costs.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 9
Rate Schedules

Rate Schedules
You can define rate schedules for both billing and costing. A cost rate schedule maintains
hourly cost rates for employees or jobs. No system attribute exists to distinguish between a bill
rate schedule and a cost rate schedule.
For labor cost rate schedules, specify one of the following schedule types for each rate
schedule you define:
• Employee
- Use this type of rate schedule to define standard hourly rates or percentage markups
for billing by employee.
• Job
- Use this type of rate schedule to define standard hourly rates by job title. When you
enter a job-based rate schedule, you enter a job group to indicate which jobs are used
to determine rates. When a project uses a job-based bill rate schedule, the job group
on the schedule must match the project’s billing job group.
In a multi-organization environment, you can share rate schedules across different operating
units, or have different rates for the same resource in different operating units.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 10
 To define a rate schedule:
1. Specify the operating unit to which your organization and rate schedule belongs. When
you have access to only one operating unit, that operating unit appears as a default value
in this field.
2. Specify the organization that maintains the schedule.
- The organization you enter can be any organization from your organization hierarchy,
regardless of whether the organization has the Expenditure Organization
classification, and regardless of the start and end dates for the organization.
3. In the Rate Schedules window, enter a schedule name and a description of the schedule.
4. Specify a currency for the schedule.
5. Optionally, enable the Share Across Operating Units check box.
- This optional enables other operating units to use this schedule.
6. Select a schedule type.
7. Specify rates or markups for employees or for job titles.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 11
Practice - Define a Rate Schedule
Overview
In this practice, you will define a job cost rate schedule for Vision Services. Your company uses
job-based cost rates to calculate the cost of straight time labor charged to projects. You maintain
a job-based cost rate schedule in Oracle Project Costing to use in your company's organization
labor costing rules.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define a Cost Rate Schedule by Job

Define a job-based cost rate schedule. Enter the header information as specified in the following
table:

Field Value
Operating Unit Vision Services
Organization Services-East
Schedule XXCost Rate by Job
Description Enter a brief description
Currency USD
Share Across Operating Units Leave check box disabled

After you define the header information, select the Job tab and enter the job cost rate
information. Select the Vision Corporation job group and then enter jobs and rates as specified in
the following table:

Job UOM Rate Effective Date Effective Date

From To
CON600.Consultant Hours 95 Today's Date Leave Blank
SMR400.SENIOR MANAGER Hours 105 Today's Date Leave Blank
STA700.Staff Administrator Hours 88.5 Today's Date Leave Blank
TRN500.Trainer Hours 97.75 Today's Date Leave Blank

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 12
Solution - Define a Rate Schedule
Define a Cost Rate Schedule by Job

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Rate Schedules window.

• (N) Setup > Expenditures > Rate Schedules

3. Enter the rate schedule header information as specified in the following table:

Field Value
Operating Unit Vision Services
Organization Services-East
Schedule XXCost Rate by Job
Description Enter a brief description
Currency USD
Share Across Operating Units Leave check box disabled

4. (T) Job

5. Enter the job rate information.

• Select Vision Corporation as the Job Group.

• Enter the jobs and rates as specified in the following table:

Job UOM Rate Effective Date Effective Date

From To
CON600.Consultant Hours 95 Today's Date Leave Blank
SMR400.SENIOR MANAGER Hours 105 Today's Date Leave Blank
STA700.Staff Administrator Hours 88.5 Today's Date Leave Blank
TRN500.Trainer Hours 97.75 Today's Date Leave Blank

• (I) Save

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 13
6. Close the Rate Schedules window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 14
Assign Costing Rules and Rate Schedules

Assign Costing Rules and Rate Schedules

Use the Organization Labor Costing Rules window to:
• Assign costing rules and rate schedules to operating units, parent organizations, and
specific expenditure organizations. The costing rule and rate schedules assigned to an
organization apply to all employees in the organization.
• Specify currency rate attributes to calculate labor costs if the currency of the cost rate
schedule is different from the currency of the operating unit in which the timecard is
entered.
• Define default overtime projects and tasks for organizations using the overtime calculation
extension to generate overtime transactions.
When you assign a costing rule and a rate schedule to an organization, Oracle Project Costing
applies the following rules in the order presented to determine the costing rule for each
transaction:
• If an assignment exists for the transaction expenditure organization, then the
corresponding costing rule and rate schedule are used to calculate labor costs.
• If an assignment does not exist for the expenditure organization, Oracle Project Costing
uses the Expenditure Organization Hierarchy and searches for an assignment for the parent

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 15
 organization that owns the expenditure organization. If an organization has multiple
parents and a rule is assigned to each, then the rule assigned to the lowest level parent
organization is applied.
• If an assignment does not exist for a parent organization, then Oracle Project Costing
searches for an assignment for the expenditure-operating unit.
To assign costing rules and rate schedules:
1. Select an Operating Unit, Organization or both.
- If you do not select an operating unit, then Oracle Project Costing displays all
organizations that are part of any Expenditure/Event Organization Hierarchy.
- If you select an operating unit, then Oracle Project Costing displays only those
organizations that are in the Expenditure/Event Organization Hierarchy for the
selected operating unit. An organization does not have to be classified as Project
Expenditure/ Event Organization to appear on the list.
2. Select a labor costing rule.
- If the labor costing rule has a costing method of Rates, then select the cost rate
schedule that defines the hourly cost rates for employees in the selected organization.
- If you assign an organization labor costing rule to an organization that is not
classified as a Project Expenditure/Event Organization, then the rule applies to
organizations that are below it in the hierarchy, unless you assign a rule to an
organization at a lower level in the hierarchy. For example, a hierarchy has three
organizations: Organization 1, Organization 11, and Organization 111. Organization 1
is the parent of Organization 11. Organization 11 is the parent of Organization 111.
Organization 111 is the only Project Expenditure/Event Organization. If you assign
organization labor costing rules only to Organization 1 and Organization 11, then the
rule that you assign to Organization 11 takes precedence for Organization 111.
3. Enter a default job rate schedule.
- This schedule is used to forecast costs for unstaffed positions.
4. Enter the effective dates.
5. Optionally, enter a default project and task for system-generated transactions.
- Enter this information if you use the overtime calculation extension,
6. Enter the currency conversion attributes in the Currency Conversion Attributes region.
- Enter this information if your cost rate schedule currency is different from your
operating unit currency.
- If you do not specify currency attributes, then Oracle Project Costing applies the rate
attributes defined in the Implementation Options window.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 16
Guided Demonstration - Define an Organization Labor Costing
Rule
Define an Organization Labor Costing Rule

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Organization Labor Costing Rules window.

• (N) Setup > Costing > Labor > Organization Labor Costing Rules

3. Enter the organization labor costing rules for Services-East as specified in the following
table:

Field Value
Operating Unit Vision Services
Organization Services-East
Labor Costing Rule Compensation
Cost Rate Schedule XXCost Rate by Job (select one of
the student's schedules from a
previous practice)
Default Job Schedule Bill Rate by Job
Effective Date From One year from today
Effective Date To Leave Blank

Note: Enter an effective start date of one year from today. This organization labor costing
rule is for demonstrations purposes only.

4. (I) Save

5. Close the Organization Labor Costing Rules window and return to the navigator.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 17
Labor Costing Overrides

Labor Costing Overrides

For individual employees, you can enter labor costing overrides. You can override the assigned
costing rule, override the assigned cost rate schedule, or enter an overriding cost rate.
To override labor costing:
1. In the Labor Costing Overrides window, find any existing labor costing overrides.
- Select either the Employee Name or Employee Number from the list of values.
- Select the operating unit from the list of values.
- Select the Find button.
2. Optionally, select a labor costing rule.
3. Choose an override type to specify whether to override the assigned rate schedule or enter
an overriding cost rate:
- Schedule - Enter the overriding rate schedule in the Cost Rate Schedule field.
- Rate - Enter an overriding rate. Optionally, select a new currency code and define
currency conversion attributes.
4. Enter effective dates.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 18
Guided Demonstration - Define a Labor Costing Override
Define a Labor Costing Override

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Labor Costing Overrides window.

• (N) Setup > Costing > Labor > Labor Costing Overrides

3. Find the employee.

• Enter the find criteria:

− Employee Name = Cagliastro, Ms. Joanne Lisa (Jo)
− Employee Number = 10
− Overrides for Operating Unit = Vision Services

• (B) Find

4. Enter the labor cost override.

• Use the values as specified in the following table:

Field Value
Costing Rule Exempt
Override Type Rate
Costing Schedule Leave Blank
Rate 122.45
Currency CAD
Rate Type Corporate
Rate Date Expenditure Item Date
Exchange Rate Leave Blank
Effective Date From Today's Date
Effective Date To Leave Blank

• (I) Save

5. Close the Labor Costing Overrides window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 19
Labor Costing Extension

Labor Costing Extension

Use the labor costing extension to implement a unique costing method for labor transactions.
The standard method calculates raw cost using the number of hours multiplied by the
employee’s hourly cost rate. The labor costing extension enables you to derive raw cost
amounts for individual labor transactions. Examples uses of the extension include:
• Standard cost rate by job
• Capped labor cost rates
• Multiple cost rates per employee
You can use the labor costing extension to implement unique costing methods other than the
standard method, which calculates raw cost using the number of hours multiplied by the
employee’s hourly cost rate.
Processing
Oracle Project Costing processes the labor costing extension during labor cost distribution
before calculating standard raw cost amounts. If Oracle Project Costing encounters a labor
costing extension that derives the raw cost amount of a labor transaction, then it skips the
standard raw cost calculation section for that transaction.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 20
Labor Transaction Extension

Labor Transaction Extension

The labor transaction extension enables you to create additional transactions for individual
labor items charged to projects:
• Create overtime premium transactions for overtime hours based on company overtime
policies.
• Create fringe benefit transactions that are charged to the same project as the source labor.
• Create additional transactions for hazardous work performed for every labor transaction
charged to certain projects.
You can create additional transactions for straight time labor transactions and overtime labor
transactions. You create additional labor transactions based on the source labor transactions
that you enter on timecards.
Related Transactions
Additional transactions created for labor transactions are referred to as related transactions. All
related transactions are associated with a source transaction and are attached to the expenditure
item ID of the source transaction. You can identify and process the related transactions by
referring to the expenditure item ID of the source transaction.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 21
 You create related transactions to process a raw cost amount separately than the source
transaction raw cost amount. Related transactions can be burdened, billed, and accounted for
independently of the source transaction.
Processing
Oracle Project Costing processes the labor transaction extension during labor cost distribution.
When you distribute labor costs, the program processes the labor transaction extension after it
calculates the raw cost of the source transactions. This sequence enables you to derive the cost
of the related transaction from the cost of the source transaction. You also use the labor
transaction extension to calculate new cost amounts for related transactions if the source
transaction is recosted.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 22
Implement Overtime Processing

Implement Overtime Processing

Complete the following steps to implement an indirect project to collect overtime premium
costs:
• Implement the Oracle Project Costing Overtime Calculation extension.
• Define overtime expenditure types.
• Define labor cost multipliers.
- For each type of overtime your business uses, define a corresponding labor cost
multiplier. You assign the appropriate labor cost multiplier to each overtime task.
• Enter an overtime project.
- You can define one indirect project to hold all of your company’s overtime costs, or
you can define many indirect projects to make it easier to enter and report overtime
by group or office.
- If you decide to use more than one indirect project to hold your company’s overtime
costs and you are using automatic overtime calculation, then you must include logic
in your Overtime Calculation extension to charge the overtime hours to the
appropriate overtime project.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 23
 • Define overtime tasks.
- For each overtime project, you must define a task for each type of overtime your
business uses. Different types of overtime use different labor cost multipliers to
calculate overtime costs.
- If you are using automatic overtime calculation, then you must include the logic in
your Overtime Calculation extension to charge overtime hours to the appropriate
overtime task.
• Define labor costing rules.
- If you charge overtime costs to an indirect project, then you can use Oracle Project
Costing to record the premium your business pays employees for overtime hours they
work.
• Assign a labor cost multiplier for each overtime task.
• Implement AutoAccounting.
For additional discussion regarding how to implement overtime calculations, see the Oracle
Projects Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 24
Overtime Calculation Extension

Overtime Calculation Extension

You can specify how to use the Overtime Calculation extension in the Implementation Options
window.
The overtime calculation extension enables you to define your own rules to implement
company-specific overtime calculation policies. The extension calculates overtime costs and
charges them to an indirect project other than the project where the labor was charged.
To charge overtime to the project where the labor was charged, consider creating items via the
labor transaction extension.
Oracle Project Costing provides a template Overtime Calculation extension. You can use the
template to understand the extension, and then make appropriate changes to meet your business
needs.
If you use both the Labor Transaction Extension and the Overtime Calculation program, then
you must define conditions so that only one of these options processes each transaction.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 25
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 26
Listings

Listings
• IMP: Labor Cost Multipliers - Report to review all labor cost multipliers.
• IMP: Labor Cost Rates Listing - Report to review all employees and their cost rates, job
level, job discipline, or labor costing rule. For each employee listed, this report displays
the employee’s active organization and job assignments, the assigned labor costing rule,
and the hourly cost rate.
• IMP: Labor Cost Rates Listing by Organization - Report to review all employees and
their cost rates, job level, job discipline, or labor costing rule. This report starts at a
specified organization and reports down the organization hierarchy listing employees and
their labor cost rates. You cannot print a listing for a single organization using this report
unless the organization is at the lowest level of the hierarchy.
• IMP: Labor Costing Rules Listing - Report to review labor costing rules.

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 27
Summary

Copyright © 2007, Oracle. All rights reserved.

Implementing Labor Costing

Chapter 8 - Page 28
 Implementing Burden
Costing
Chapter 9

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 2
Implementing Burden Costing

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 5
Overview of Burdening

Overview of Burdening
Burdening, also known as cost plus processing, is a method of applying one or more burden
cost components to the raw cost amount of each individual transaction to calculate burden
costs. You can choose to account for the individual burden cost components to either track the
overhead absorption or to account for the total burdened costs. You can write custom reports
using standard views to report all burden cost components for each detail transaction.
The objective of burdening is to provide you with a buildup of raw and burden costs, so you
can accurately represent the total cost of doing business. You can choose to calculate total
burdened costs as a buildup of costs using a precedence of multipliers. Taking the raw cost,
Oracle Project Costing performs a buildup of burden costs on top of raw costs to provide you
with a true representation of costs. You provide the multiplier that Oracle Project Costing uses
to calculate the cost. Oracle Project Costing performs the buildup for each detailed transaction.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 6
Burden Costing Terminology

Burden Costing Terminology

• Burden Cost Code - An implementation-defined classification of overhead costs that
represents the type of burden cost to apply to raw cost.
• Burden Costs - Legitimate costs of doing business that support raw costs and cannot be
directly attributed to work performed.
• Burden Multiplier - A numeric multiplier associated with an organization for burden
schedule revisions, or with burden cost codes for projects or tasks.
• Burden Schedule - An implementation-defined set of burden multipliers that you
maintain to use across projects.
• Burden Structure - Determines how cost bases are grouped and what types of burden
costs are applied to the cost bases. A burden structure defines relationships between cost
bases and burden cost codes and between cost bases and expenditure types.
• Burdened Cost - The cost of an expenditure item, including raw cost and burden costs.
• Cost Base - The grouping of raw costs to which burden costs are applied.
• Raw Costs - Costs that are directly attributable to work performed. Examples of raw costs
are salaries and travel expenses.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 7
Storing Burden Cost Calculations

Storing Burden Cost Calculations

Storing Burden Cost on the Same Expenditure Item
You can choose to store the total burdened cost as a value along with the raw cost on each
expenditure item. You can view the total burdened cost and the raw cost of each item. Oracle
Project Costing displays the raw and burdened costs on windows and reports.
Storing Burden Costs as a Separate Expenditure Item on the Same Project or on a
Separate Project
You can choose to hold the burden cost components as separate expenditure items on the same
project. Alternatively, you can show burden cost as summarized expenditures on a separate
project that you assign in the Project Types window. The expenditure items storing the burden
cost components have a different expenditure type that is classified by the expenditure type
class Burden Transaction. Oracle Project Costing summarizes the burden cost components to
create the burden transactions. The summarization is by project, lowest task, expenditure
organization, expenditure classification, supplier, PA period, and burden cost code. You can
also use the Burden Resource Extension to specify the attributes that Oracle Project Costing
uses when it groups summary burden transactions. The link to the original expenditure item is
maintained, but is not visible when you look at the summarized expenditures.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 8
Accounting for Burden Costs

Accounting for Burden Costs

Accounting for Burden Costs by Burden Cost Component
You can account for the individual burden cost components when you want to track the
burdening in Oracle Subledger Accounting and Oracle General Ledger. The program PRC:
Create and Distribute Burden Transactions summarizes the burden costs and creates the
expenditure items for the burden transactions. You can create the burden transactions on the
same project as the raw cost transactions or on a separate project.
Accounting for Total Burdened Cost
You may choose to account for the total burdened cost of the items, without distinguishing the
amounts by burden cost components. You can use this approach to track the total burdened
cost in a cost asset or cost WIP (work in process) account. This method is also sometimes
referred to as project inventory.
Storing Burden Costs with No Accounting Impact
You can choose to calculate the burden costs for project transactions for management reporting
without an accounting impact. If you store burden costs as a value on the expenditure item,
then you have no extra setup to perform and no accounting programs to run on the burden
costs, as long as you do not enable Total Burdened Accounting for any project types.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 9
 If you store burden costs as separate, summarized expenditure items and perform the
accounting in Oracle Project Costing (rather than importing the accounting), then you must set
up AutoAccounting to derive the same default GL account for both the debit and the credit
account. You must generate cost accounting events for the cost distribution lines for these
expenditure items, create the final accounting in Oracle Subledger Accounting, and transfer the
subledger accounting to Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 10
Project Types and Burdening

Project Types and Burdening

Use the Costing Information tab on the Project Types window to define default settings for
burdening and processing for projects:
• Burdened - Indicates whether to burden raw costs charged to projects using this project
type.
• Schedule - The burden schedule to use as the default cost burden schedule. You enter a
schedule only if the project type is burdened. If the project type is burdened, then this field
is required.
• Allow Schedule Override - Indicates whether you can override the default cost burden
schedule when entering and maintaining projects and tasks. Deselect the check box if you
want to ensure that all projects of a project type use the same schedule. Check the box to
allow updates to the cost burden schedule on the projects and tasks. You can enter this
only if you enabled the Burdened check box.
• Burden Cost on same expenditure item - Select if you want to store the burden amount
in the same expenditure item, and then optionally select a project and task to account for
the expenditure item.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 11
 • Account for Burden Cost components: Select this option to store the burden amount in
the same expenditure item, and additionally to show the burden cost on separate,
summarized expenditures on a separate project. Select a project and (optional) task that
accounts for the expenditure item.
• Burden Cost as separate expenditure item - Select this option to account for burden
amounts as a separate expenditure item.
• Enable Accounting for Total Burdened Costs - Select this option to generate accounting
for the total burdened cost.
- Note: If you store burden costs as a value on the same expenditure item for reporting
purposes only, and you do not want to generate accounting for total burdened cost,
then do not enable this option.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 12
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 13
Burden Costing Implementation Steps

Burden Costing Implementation Steps

Complete the setup steps listed on the slide to implement burden costing.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 14
Cost Bases and Cost Base Types

Cost Bases and Cost Base Types

Cost bases refer to groups of raw costs that you use for applying burden costs. You assign cost
bases to burden structures, and then specify the types of raw costs that are included in the cost
base along with the types of burden costs that are applied to the cost base.
Cost base types refer to the use of cost bases. Oracle Project Costing predefines the cost base
types Burden Cost and Other. You use cost bases with the type Burden Cost in burden
calculations. Oracle Project Costing does not include cost bases with a type other than Burden
Cost in burden calculations. You use these cost bases for grouping expenditure types for
different purposes, such as for billing extension calculations.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 15
Burden Cost Codes

Burden Cost Codes

Burden cost codes represent the types of costs to allocate to raw costs. You can use burden cost
codes for costing, revenue generation, and billing. You can also use burden cost codes to report
and account for on burden cost recovery components in Oracle Project Costing.
Define an expenditure type for burden cost codes that Oracle Project Costing processes as
separate, summarized burden transactions. You must assign the Burden Transaction
expenditure type class to the expenditure type.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 16
Burden Structures

Burden Structures
You define the cost buildup using a burden structure. A burden structure determines how you
group cost bases and establishes the method of applying burden costs to raw costs. Expenditure
types classify raw costs and burden cost codes classify burden costs. The relationship between
expenditure types and burden cost codes within each cost base determines what burden costs
Oracle Project Costing applies to specific raw costs, and the order in which Oracle Project
Costing applies the burden costs.
Each expenditure type can belong to only one cost base having a type of Burden Cost within
each burden structure. This setup ensures that Oracle Project Costing does not burden an
expenditure types more than once.
If you do not assign an expenditure type to a cost base, then Oracle Project Costing does not
burden transactions with that expenditure type. The burdened cost for these transactions equals
the raw cost of the transaction.
Example
The diagram on this page illustrates a burden structure with the following cost bases:
• Labor
- Includes the expenditure types Professional, Clerical, and Sales.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 17
 - Is assigned the burden cost codes Fringe, Overhead, and General and Administrative
(G&A).
• Material
- Includes the expenditure types Supplies and Construction Materials.
- Is assigned the burden cost codes Handling and General and Administrative (G&A).
• Expense
- Includes the expenditure types Travel, Meals, and Airfare.
- Is assigned the burden cost code General and Administrative (G&A).
Copying Burden Structures
When you copy a burden structure, Oracle Project Costing copies the following assignments
from the existing (From) structure to the new (To) structure:
• Cost base assignments
• Burden cost codes
• Expenditure types
To copy an existing burden structure to a new burden structure, first enter header information
for the new burden structure.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 18
Burden Structures

Burden Structures
Create an Additive burden structure to apply each burden cost code assigned to a cost base
using the same precedence when calculating burden costs. Additive schedules automatically
provide a default precedence value of 1 to each burden cost code in the structure.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 19
Burden Structures

Burden Structures
Create a Precedence burden structure to specify the order in which each burden cost code in a
cost base is applied to raw costs. Enter the precedence in which you want to apply each burden
cost code to raw costs within the cost base.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 20
Practice - Define a Burden Structure
Overview
In this practice, you will define an additive burden structure. You will set up the burden structure
to apply different burden costs to labor and to expense report raw costs.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define the Burden Structure Header Information

Your company applies fringe, overhead, and general and administrative burden to various types
of costs. The finance department always uses an additive approach to calculate the burden.
Define the header information for a new additive burden structure and name it XXLabor and
Expenses. Note that your company does not want users to use this structure for overrides.

Enter the Labor Cost Base

The finance department wants to apply fringe to labor costs to account for benefits and overhead
to account for human capital management administrative support. Define a labor cost base that
applies both types of burden costs to the following expenditure types:
− Administrative
− Clerical
− Design
− Professional
− Supervision

Enter the Expenses Cost Base

The finance department also wants to apply general and administrative burden to expense report
costs to account for the cost of using an outside travel agency and overhead to account for
managing the expense reports. Define an expenses cost base that applies both types of burden
costs to the following expenditure types:
− Airfare
− Car Rental
− Hotel
− Meals
− Mileage
− Telephone

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 21
Solution - Define a Burden Structure
Define the Burden Structure Header Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Labor Costing Overrides window.

• (N) Setup > Costing > Burden > Structures

3. Enter the header information as specified in the following table:

Field Value
Structure XXLabor and Expenses
Effective From Today's Date
Effective To Leave Blank
Description Enter a brief description
Structure Type Additive
Structure Usage in Schedule Overrides - Allowed No
Structure Usage in Schedule Overrides - Default No

4. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 22
Enter the Labor Cost Base

5. Select Labor from the list of values in the Cost Base field.

6. Enter the cost code for this cost base as specified in the following table:

Burden Cost Code Precedence (View Only)

Fringe 1
Overhead 1

7. Add the following expenditure types to this cost base:

− Administrative
− Clerical
− Design
− Professional
− Supervision

8. (I) Save

Enter the Expenses Cost Base

9. Position your cursor in the empty row below Labor in the Cost Base Assignment region.

10. Select Expenses from the list of values in the Cost Base field.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 23
11. Enter the cost codes for this cost base as specified in the following table:

Burden Cost Code Precedence (View Only)

G&A 1
Overhead 1

12. Add the following expenditure types to this cost base:

− Airfare
− Car Rental
− Hotel
− Meals
− Mileage
− Telephone

13. (I) Save

14. Close Burden Structures window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 24
Burden Schedule Types and Burden Schedules

Burden Schedule Types and Burden Schedules

Two types of burden schedules exist that you can use in Oracle Project Costing:
• Firm - Use firm schedules if you do not expect your multipliers to change. Generally, you
use firm schedules for costing or commercial billing schedules. Firm schedules can have
multiple versions, but never more than one version for an effective date range.
• Provisional - Because you do not always know burden multipliers at the time that you
calculate total burdened costs, you can use provisional multipliers. Provisional multipliers
are generally estimates based on a company’s forecast budget for the year. When you
determine the actual multipliers that apply to costs, then you replace the provisional
multipliers with the actual multipliers. Oracle Project Costing processes the adjustments
from provisional to actual changes for costing, revenue, and billing.
You define schedule versions for a burden schedule to record the date range within which
multipliers are effective. You can have an unlimited number of versions for each burden
schedule, but you can have only one active version at a given point in time.
The profile option PA: Default Burden Schedule Type indicates the default burden schedule
type when entering a standard burden schedule using the Burden Schedules window.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 25
Assigning Burden Multipliers

Assigning Burden Multipliers

When you create burden schedules, you assign a multiplier to an organization and burden cost
code. The multiplier specifies the amount by which Oracle Project Costing multiplies the raw
cost to obtain the burden cost amount. When you cost the expenditure items, Oracle Project
Costing looks at the expenditure organization on the expenditure item to determine what
multiplier to use for burden calculation.
Burden Multiplier Hierarchy
Effective multipliers cascade down the Project Burdening Hierarchy, starting with the parent
organization. If Oracle Project Costing finds a level in the hierarchy that does not have a
multiplier defined, then it uses the multipliers entered for the parent organization. Therefore, an
organization multiplier schedule hierarchy is really a hierarchy of exceptions. You define the
multipliers for an organization only to override the multipliers of its parent organization.
Suggestion for Organizations that Have No Burden
You can set up special procedures for organizations that have no burden. For example, your
company can use contractors that do not have a particular type of burden cost (such as fringe)
applied to their raw cost. To implement this scenario, first set up a new expenditure
organization for contractors. Then, assign that organization to the burden schedule and use a

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 26
 multiplier of zero for the burden cost of Fringe to create a zero burden cost amount. Each time
that burden cost for Fringe is calculated for the contractor’s organization, Oracle Project
Costing multiplies the contractor’s raw cost multiplier by zero, resulting in a burden cost
amount of zero, which reflects the true representation of the raw cost and burden multipliers.
Adding a New Organization
If you add a new expenditure organization after you have compiled schedule revisions, you
must ensure that the new organization is included in the schedules:
• If the organization has its own multipliers, then add multipliers to appropriate schedule
revisions and recompile.
• If the organization uses parent organization multipliers, then run the concurrent program
PRC: Add New Organization Burden Compiled Multipliers.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 27
Defining Burden Schedules

Defining Burden Schedules

• In the Burden Schedules window, enter the name and description of the burden schedule
you are defining.
• Enter the default burden structure for this schedule. You can see the structure of a
particular revision when you review revision details. You can change the default structure
of the schedule at any time. Oracle Project Costing uses the new default structure for any
new revisions that you create. You can update the default structure to create revisions that
use a different burden structure for a given burden schedule.
• Choose the burdening hierarchy for this schedule.
- The burden hierarchy you enter for the burden schedule is the default hierarchy for
the latest version. The burden hierarchy information is displayed in the Burden
Schedule Version Details window and can be overridden at this level.
• Choose the Type of schedule, either Firm or Provisional.
Versions
• In the Versions region, define revisions. You can have many different revisions of a
particular schedule. For example, you can have a schedule revision for each quarter in

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 28
 your fiscal year. You also create schedule revisions when you want to use a new burden
structure, enter new burden multipliers, or apply actual rates to provisional multipliers.
• The start and end dates for revisions in a provisional schedule must match GL periods. For
firm schedules, Oracle Project Costing provides you with the flexibility to use any date as
the start or end date.
• Whenever you create a new schedule revision, Oracle Project Costing automatically closes
the previous open revision. The end date defaults to the date preceding the start date of the
new revision.
• Enable the Hold check box to hold this schedule revision from compiling.
• Choose the Details button to review the details of a particular revision.
• Choose Actual if you want to apply actual multipliers to provisional revisions.
Multipliers
• In the Multipliers region, enter multipliers for a schedule revision.
• You also use this region to compile burden multipliers.
• Choose the Copy button to copy multipliers from one schedule revision to a new revision.
You must create and save the Copy To revision before you can copy multipliers to the new
revision. If you have a responsibility with the Project Burden Schedule Copy function
assigned to it, then you can copy multipliers across schedules and schedule revisions.
Otherwise, you can only copy multipliers between revisions that use the same burden
structure.
• When you modify the multipliers on a burden schedule and recompile, Oracle Project
Costing identifies the existing expenditure items affected by the changes and marks the
items for retroactive reprocessing. If you want to change the multipliers and only use them
for expenditure items moving forward, then end date the current version of the schedule
and create a new version with the revised multipliers. Oracle Project Costing uses the new
version to calculate burden amounts for expenditure items with expenditure item dates that
fall within the dates for the new burden schedule version.
Compiling
• After you have completed entry of all multipliers and saved your work, choose the
Compile button to compile new multipliers. When you compile a schedule, Oracle Project
Costing automatically submits PRC: Compile All Burden Schedule Revisions.
• You can also run PRC: Compile All Burden Schedule Revisions to compile multiple
schedules at one time.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 29
Practice - Define a Burden Schedule
Overview
In this practice, you will define a provisional burden schedule and specify multipliers for each
type of burden cost. You will assign the XXLabor and Expenses burden structure that you created
in the previous practice to the schedule.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define the Burden Schedule Header Information

You need to define a burden schedule to specify the burden multipliers for the cost codes on your
XXLabor and Expenses burden structure. The finance department does not have the final
multipliers at this time, so you must create a provisional burden schedule that will enable you to
specify the actual multipliers when they are available.

Define the header information for the provisional burden schedule and name it XXInternal
Costing. Use the organization hierarchy information as specified in the following table:

Field Value
Hierarchy Global
Version 1
Start Org Vision Corporation

Enter the Version Information

Create the initial version of the schedule. Name the first version and identify the first day of next
month as the start date. You do not have an end date for this version at this time.

Enter the Multipliers and Compile the Version

Enter the multipliers for each burden cost code. First enter the multipliers for Vision
Corporation, the start organization that you specified for the hierarchy. Costs for operating your
Services-East organization are higher than in other organizations, so the finance department has
provided you with a separate set of provisional multipliers for Services-East. Enter the
multipliers as specified in the following table:

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 30
 Organization Burden Cost Code Multiplier
Vision Corporation Fringe .35
Vision Corporation Overhead .155
Vision Corporation G&A .10
Services-East Fringe .55
Services-East Overhead .16
Services-East G&A .15

When you are finished, save and compile the new burden schedule version.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 31
Solution - Define a Burden Schedule
Define the Burden Schedule Header Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Burden Schedules window.

• (N) Setup > Costing > Burden > Schedules

3. Enter the header information

Field Value
Name XXInternal Costing
Description Enter a brief description
Structure XXLabor and Expenses
Effective From Today's Date
Effective To Leave Blank
Type Provisional
Hierarchy Global
Version 1
Start Org Vision Corporation

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 32
4. (I) Save

Enter the Version Information

5. Position your cursor in the Name field in the Versions region (above the label Name) and
enter version information as specified in the following table:

Field Value
Name Enter a version name
Start Date First day of next month
End Date Leave Blank
Structure (view only) XXLabor and Expenses

6. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 33
Enter the Multipliers and Compile the Version

7. Enter the multipliers in the Multipliers region as specified in the following table:

Organization Burden Cost Code Multiplier

Vision Corporation Fringe .35
Vision Corporation Overhead .155
Vision Corporation G&A .1
Services-East Fringe .55
Services-East Overhead .16
Services-East G&A .15

8. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 34
9. (B) Compile

When you select the Compile button, Oracle Project Costing submits the concurrent
program Compile Burden Schedule Revision.

10. Close the Burden Schedules window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 35
Assigning Burden Schedules

Assigning Burden Schedules

You can assign burden schedules to project types, projects, and tasks. When you assign
schedules to a project type, the schedules are the default schedules for projects and tasks that
use the project type. Assigning burden schedules to project types allows you to implement
company policies. For example, you can implement a policy that requires all projects of a
particular project type to maintain the same multipliers for costing purposes. You can change
the default schedule for a project or task. You can use burden schedule overrides to override
default schedules at the project and task levels. Burden schedule overrides generally reflect
multipliers that have been negotiated specifically for a particular project or task.
You can change the default burden schedules for a project or task. If you change the burden
schedule for a lowest level task that has items processed, then Oracle Project Costing does not
automatically mark the items for reprocessing. Only new items that you charge to the task use
the new burden schedule. You can mark the items for recalculation in the Expenditure Inquiry
window. Marking the items causes Oracle Project Costing to use the new burden schedule
assigned to the task to reprocess the items.
Once you assign a burden schedule to a project, you can use the View Burdened Costs window
to test your burden structure and burden schedule implementation.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 36
Burden Costing Extension

Burden Costing Extension

Use the Burden Costing client extension to override the burden schedule ID and assign a
different burden schedule to an expenditure item. Oracle Project Costing calls the Burden
Costing extension during cost distribution processing. You can modify the extension to satisfy
your business rules for assigning burden schedules. For additional information, see the Oracle
Projects APIs, Client Extensions, and Open Interfaces Reference.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 37
Reporting Separate Burden Transactions with Source Resources

Reporting Separate Burden Transactions with Source Resources

You can set the PA: Report Separate Burden Transactions with Source Resources profile
option to have Oracle Project Costing assign summary burden transaction expenditure items to
the same resource class as their source raw cost expenditure items. This option enables you to
assign both burden costs and their source raw costs to the same resource class for reporting
purposes.
For example, for timecards, if you set the profile option to Yes, then Oracle Project Costing
assigns both the labor raw cost expenditure items and the related summarized burden
transaction expenditure items to the People resource class. Alternatively, if you set this profile
option to No, then Oracle Project Costing assigns the raw cost expenditure items to the People
resource class and the related summarized burden transaction expenditure items to the
Financial Elements resource class. These assignments takes place because labor raw cost
expenditure items have an expenditure type class of Straight Time and burden transaction
expenditure items have an expenditure type class of Burden Transaction.
This profile option only affects transactions charged to projects where the Burden Cost as
Separate Expenditure Item option is enabled for the project type.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 38
 Burden Resource Extension
If you set this profile option to Yes, then you must modify the Burden Resource Extension to
specify the attributes that Oracle Project Costing uses when it groups summary burden
transactions. For additional information about this extension, see Burden Resource Extension,
Oracle Projects APIs, Client Extensions, and Open Interfaces Reference.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 39
Accounting for Cost Adjustments Resulting from Burden Schedule
Revisions

Accounting for Cost Adjustments Resulting from Burden Schedule Revisions

When you modify burden schedules and recompile burden multipliers, Oracle Project Costing
identifies the existing transactions affected by the changes and marks the items for
reprocessing. When accounting for the adjusted cost, you can choose to reverse the original
accounting entries and generate new ones for the adjusted cost, or you can choose to generate
new accounting lines for the difference between the original and new burden cost amounts. To
select the accounting option that best fits your business needs, enable or disable the profile
option PA: Create Incremental Transactions for Cost Adjustments Resulting from a Burden
Schedule Recompilation. See the following pages for examples of how this profile option
affects adjustment accounting.
Adjustments from the Expenditure Inquiry Window
Setting the profile option to Yes does not affect raw and burden cost recalculation adjustments
that you make from the Expenditure Inquiry window. Although burden cost recalculation does
not affect raw cost amounts and accounts, Oracle Project Costing always accounts for burden
cost recalculation adjustments from this window with a full reversing and rebooking
accounting entry that includes both the raw cost and burden cost amounts.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 40
Accounting for Cost Adjustments Example 1: Total Burdened
Costs without Incremental Transactions

Accounting for Cost Adjustments Example 1: Total Burdened Costs without

Incremental Transactions
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
Burden Schedule Recompilation profile option to No, Oracle Project Costing reverses the
original accounting entries and creates new entries for the adjusted cost amounts. Oracle
Project Costing reverses the raw accounting lines and generates new adjusted lines even though
the raw cost amount does not change.
Accounting Example 1 Assumptions
The following assumptions are made in this accounting example:
• Transaction Raw Cost = $100
• Original Total Burdened Cost = $300
• Adjusted Total Burdened Cost = $400

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 41
Accounting for Cost Adjustments Example 1: Total Burdened
Costs without Incremental Transactions

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 42
Accounting for Cost Adjustments Example 2: Total Burdened
Costs with Incremental Transactions

Accounting for Cost Adjustments Example 2: Total Burdened Costs with

Incremental Transactions
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
Burden Schedule Recompilation profile option to Yes, Oracle Project Costing does not reverse
the original accounting entries. Instead, Oracle Project Costing creates new accounting entries
for the difference between the original and new burden cost amounts.
Accounting Example 2 Assumptions
The following assumptions are made in this accounting example:
• Transaction Raw Cost = $100
• Original Total Burdened Cost = $300
• Adjusted Total Burdened Cost = $400

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 43
Accounting for Cost Adjustments Example 2: Total Burdened
Costs with Incremental Transactions

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 44
Accounting for Cost Adjustments Example 3: Summarized Burden
Cost Components without Incremental Transactions

Accounting for Cost Adjustments Example 3: Summarized Burden Cost

Components without Incremental Transactions
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
Burden Schedule Recompilation profile option to No, Oracle Project Costing reverses the
original accounting entries for the raw cost. Oracle Project Costing then creates new raw cost
entries and burden entries for the difference between the original and new burden cost
amounts.
Accounting Example 3 Assumptions
The following assumptions are made in this accounting example:
• Transaction Raw Cost = $100
• Original Total Burdened Cost = $300
• Adjusted Total Burdened Cost = $400

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 45
Accounting for Cost Adjustments Example 3: Summarized Burden
Cost Components without Incremental Transactions

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 46
Accounting for Cost Adjustments Example 4: Summarized Burden
Cost Components with Incremental Transactions

Accounting for Cost Adjustments Example 4: Summarized Burden Cost

Components with Incremental Transactions
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
Burden Schedule Recompilation profile option to Yes, Oracle Project Costing does not reverse
the original accounting entries. Instead, Oracle Project Costing creates new burden entries for
the difference between the original and new burden cost amounts.
Accounting Example 4 Assumptions
The following assumptions are made in this accounting example:
• Transaction Raw Cost = $100
• Original Total Burdened Cost = $300
• Adjusted Total Burdened Cost = $400

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 47
Accounting for Cost Adjustments Example 4: Summarized Burden
Cost Components with Incremental Transactions

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 48
Agenda

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 49
Burden Calculation in Costing Programs

Burden Calculation in Costing Programs

The calculation of burden cost includes the following processing logic and calculations:
1. The program selects expenditure items with a raw cost amount for processing.
2. The program determines whether the related project type of the expenditure item is
defined for burdening.
- If Yes (the project type is defined for burdening), then the program determines which
burden schedule to use.
- If No (the project type is not defined for burdening), then the program does not
burden the item. The program assumes the burden multiplier is zero (burden cost is
zero, thus burdened cost equals raw cost).

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 50
Burden Calculation in Costing Programs

Burden Calculation in Costing Programs

3. To determine which burden multiplier to use, the program determines if there is a burden
schedule override for the expenditure:
- The program uses the task burden schedule override on the associated task, if such an
override exists.
- If no task burden schedule override exists on the associated task, then the program
uses the project burden schedule override on the associated project.
4. If no burden schedule override exists, then the program determines which standard burden
schedule to use for burden cost calculations in the following order:
1. Standard task burden schedule
2. Standard project burden schedule

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 51
Burden Calculation in Costing Programs

Burden Calculation in Costing Programs

5. After the program determines which schedule to use, it verifies whether the expenditure
item’s expenditure type is found in any of the cost bases of the selected burden schedule
revision.
- If an expenditure type is excluded from all cost bases in the burden structure, then the
program does not burden the expenditure items that use that expenditure type (burden
cost equals zero, thus burdened cost equals raw cost).
- Otherwise, the program uses burden multipliers from the appropriate burden schedule
revision. If a schedule ID override exists, then the program uses that revision.
6. The program calculates burden cost and total burdened cost amounts according to the
following calculation formulas:
- Burden cost equals raw cost multiplied by a burden multiplier
- Total burdened cost equals the sum of raw cost and burden cost

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 52
Concurrent Programs: Total Burdened Cost Accounting

Concurrent Programs: Total Burdened Cost Accounting

1. PRC: Distribute Total Burdened Costs - Creates the total burdened cost distribution
lines for all transactions charged to burdened projects, even if the transaction is not
burdened, to account for the total project costs in the cost WIP account.
2. PRC: Generate Cost Accounting Events - Generates accounting events for total
burdened cost distribution lines. If you select Total Burdened Cost for the Process
Category parameter, then the program generates accounting events only for total burdened
costs.
3. PRC: Create Accounting - Creates draft or final accounting entries in Oracle Subledger
Accounting for the accounting events. When you run the program in final mode, you can
optionally choose to automatically transfer the final accounting to Oracle General Ledger,
initiate the journal import program, and post the journal entries in Oracle General Ledger.
If you select Total Burdened Cost for the Process Category parameter, then the program
creates accounting only for total burdened cost accounting events.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 53
Practice - Distribute Total Burdened Costs
Overview
In this practice, you will run the distribution program to distribute total burdened costs for your
XX Capital Services project. After the program completes, you will review the total burdened
accounting and research how Oracle Project Costing calculated the costs.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Distribute Total Burdened Costs

Submit the concurrent program PRC: Total Burdened Cost for your XX Capital Services project.
Ensure that you select your project as a program parameter. Review the output report.

1. Note your Request ID __________________________

Review the Results in Expenditure Inquiry

After the program is complete, query the expenditure items for your project in Expenditure
Inquiry and review the cost distribution line information for one of the expenditure items. The
distribution program determines the default total burdened cost accounting for the expenditure
items.

Note the following amounts:

− Raw cost amount:
− Burdened cost amount:

Note the following information about the expenditure item:

− Project number:
− Task number:
− Expenditure type:
− Expenditure item date:
− Expenditure organization:

Research How the Total Burdened Amount was Calculated

Select one of the expenditure items on your XX Capital Services and research how Oracle
Project Costing calculated the total burdened costs. Use the View Burdened Costs window to
assist your research. Answer the following questions:

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 54
 1) What is the name of the burden schedule that Oracle Project Costing used to
calculate the burden amount?

2) Describe how Oracle Project Costing calculated the total burdened cost for the
expenditure item (cost codes, multipliers, calculations)?

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 55
Solution - Distribute Total Burdened Costs
Distribute Total Burdened Costs

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Distribute Total Burdened Cost from the list of values in the Name
field and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS

7. (B) OK

8. (B) Submit

• Note your Request ID __________________________

9. (B) No in the Decision dialog box

10. Find your request.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 56
 • Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

11. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

12. Review the output report.

• (B) View Output

13. Close the output page and the Requests window.

Review the Results in Expenditure Inquiry

14. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

15. Query all expenditure items for your XX Capital Services Project.

• Enter the find criteria:

− Project Number = XXCS
− Project Name = XX Capital Services

• (B) Find

16. Review cost distribution line information.

• Position your cursor on one of the queried items.

• (B) Item Details

• Select Cost Distribution Lines.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 57
 • (B) OK

• Review the cost distribution line information for the burdened debit and the burdened
credit.

17. Note the following amounts:

− Raw cost amount:
− Burdened cost amount:

18. Close the Cost Distribution Lines window and return to the Project Expenditure Items
window.

19. Note the following information about the expenditure item:

− Project number:
− Task number:
− Expenditure type:
− Expenditure item date:
− Expenditure organization:

20. Close the open windows and return to the Navigator.

Research How the Total Burdened Amount was Calculated

21. Navigate to the View Burdened Costs window.

• (N) Setup > Costing > Burdened > View

22. View the burdened costs.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 58
 • Enter information for your expenditure item.

• (B) Burden

• Select the Costing option button.

• Answer the following questions:

1) What is the name of the burden schedule that Oracle Project Costing used to
calculate the burden amount?

2) Describe how Oracle Project Costing calculated the total burdened cost for the
expenditure item (cost codes, multipliers, calculations)?

23. Close the View Burdened Costs window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 59
Concurrent Programs: Account for Summarized Burden Cost
Components

Concurrent Programs: Account for Summarized Burden Cost Components

1. PRC: Create and Distribute Burden Transactions - Summarizes the burden costs,
creates the expenditure items for the burden transactions, and runs the distribution
program. The burden transactions are created on different projects depending on the
method you use to store burden costs.
2. PRC: Generate Cost Accounting Events - Generates accounting events for burden
transactions. If you select Burden Cost for the Process Category parameter, then the
program generates accounting events only for burden costs.
3. PRC: Create Accounting - Creates draft or final accounting entries in Oracle Subledger
Accounting for the accounting events. When you run the program in final mode, you can
optionally choose to automatically transfer the final accounting to Oracle General Ledger,
initiate the journal import program, and post the journal entries in Oracle General Ledger.
If you select Burden Cost for the Process Category parameter, then the program creates
accounting only for burden cost accounting events.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 60
Maintenance Concurrent Programs

Maintenance Concurrent Programs

• PRC: Add New Organization Compiled Burden Multipliers - Adds burden multipliers
to burden schedules for an organization when you add a new organization to your
organization hierarchy. If you do not add the organization to a specific schedule revision,
then this program compiles rates for the organization in all burden schedule revisions
using the rates of the parent organization as defined in the organization hierarchy. A
burden schedule revision must already be compiled for this program to add the
organization rate. Run this program after you create the organization and before you
charge transactions using this organization as the expenditure organization.
Note: Run this program for the parent organization before you run it for the child
organization.
• PRC: Compile All Burden Schedule Revisions - Compiles all burden schedule revisions
that are not compiled and are not on hold.

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 61
Summary

Copyright © 2007, Oracle. All rights reserved.

Implementing Burden Costing

Chapter 9 - Page 62
 Performing Cost Adjustments
Chapter 10

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 2
Performing Cost Adjustments

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 5
Adjusting Expenditure Items

Adjusting Expenditure Items

Oracle Project Costing provides powerful features that allow you to:
• Adjust expenditure items on your projects
• Report the audit trail of the adjustments
See also:
• For discussion regarding Cross Charge related adjustments, see the lesson titled “Cross
Charge.”
• For discussion regarding adjustments to supplier costs, see the lesson titled "Integration
with Oracle Purchasing and Oracle Payables."
• For discussion regarding Capital Project specific adjustments, see the lesson titled “Asset
Capitalization.”
• For discussion regarding Contract Project specific adjustments, see the course titled “R12
Project Billing Fundamentals.”

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 6
Adjustments to Imported Transactions

Adjustments to Imported Transactions

The Allow Adjustments option for a transaction source controls what types of adjustments you
can make to expenditure items associated with the transaction source.
Allow Adjustments Option - Enabled
If you enable this option, then you can adjust imported transactions in Oracle Project Costing
after you load them via Transaction Import. Enabling this option enables you to make
adjustments and changes that can result in a new GL account or cost amounts for an item. For
example, you can make the following types of adjustments:
• Transfer an item to another project or task
• Split an item into two or more items
• Recalculate raw and burden costs (Raw cost values for transactions that were already
costed when loaded into Oracle Project Costing are not changed if you mark the item for
cost recalculation.)
• Reclassify an item as billable or nonbillable
• Reclassify an item as capitalizable or noncapitalizable
• Change the work type of an item

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 7
 Note: If you enable this option, Oracle Project Costing allows adjustments even if you disable
the Interface Costs to GL options in the Implementation Options.
Note: If Burden Transaction is the default expenditure type class for a transaction source, then
you cannot enable the Allow Adjustments option for the transaction source.
Important: If you enable the Allow Adjustments option for a predefined transaction source for
supplier costs, you must complete at least one of the following setup steps:
• Specify the default supplier cost credit account for supplier cost adjustments in the
Implementation Options for each operating unit.
• Define a rule in Oracle Subledger Accounting to determine the supplier cost credit
account.
This setup is required for the program PRC: Create Accounting to successfully create
accounting for supplier cost adjustments.
Allow Adjustments Option - Disabled
If the option is disabled, then you can still perform the following adjustments:
• Apply a billing hold
• Apply a one-time billing hold
• Release billing hold
• Recalculate burden cost - You can recalculate burden costs only if the Import Burdened
Amounts transaction source option is not enabled.
• Recalculate revenue
• Change comment
• Reprocess cross charge
• Mark for no cross charge processing
• Change transfer price currency attributes
• Change the work type (only if the change does not affect the billable status or capitalizable
status of the expenditure item)
- Note: The profile option PA: Transaction Billability derived from Work Type controls
whether the work type determines the billable status of an expenditure item.
If you do not allow users to adjust imported transactions in Oracle Project Costing, then you
can adjust the transactions in the originating external system. After you adjust the transactions,
you import adjustments into Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 8
Project Status and Adjustments

Project Status and Adjustments

To adjust the expenditure items for a project, the project status must allow adjustments. You
use the Status Controls region of the Statuses window to define actions that are allowed or
restricted for each project status. Enable the Adjust Transactions status control to allow
adjustments for projects with that status.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 9
Recalculate Burden Cost

Recalculate Burden Cost

You can recalculate the burden cost of an expenditure item if you find that the burdened cost
amount is incorrect. To produce correct recalculation results, you must correct the source of the
problem before redistributing the items.
• When you select Recalculate Burden Cost for a burden transaction, no recalculation of the
burden amount takes place.
• You can recalculate the burden cost of an invoice line.
To Recalculate Burden Costs:
• Make the appropriate changes by either selecting another burden cost schedule or
changing the AutoAccounting setup.
• Identify and mark appropriate items for burden cost recalculation.
• Oracle Project Costing reprocesses the items the next time that you run the costing
programs.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 10
Recalculate Raw Cost

Recalculate Raw Cost

You can recalculate the raw cost of an expenditure item if you find that the raw cost amount is
incorrect. To produce correct recalculation results, you must correct the source of the problem
before redistributing the item. For imported expenditure items, you can recalculate raw cost
only if the Allow Adjustments transaction source option is enabled on the transaction source
that is associated with the expenditure item.
Note: You can recalculate the raw cost of expenditure items imported as costed to generate a
new debit account; however, the cost amount does not change.
To Recalculate Raw Costs:
• Make the appropriate changes to the rates or AutoAccounting.
• Identify and mark appropriate items for raw cost recalculation.
• Oracle Project Costing reprocesses the items with new rates and accounting rules the next
time that you run the costing programs.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 11
Change Work Type

Change Work Type

You can change the work type of an item. You can use this adjustment to reclassify an item for
reporting and billing purposes.
Note: To change the work type, you must set the profile option PA: Require Work Type Entry
for Expenditures to Yes.
Note: If you set the profile option PA: Transaction Billability Derived from Work Type to Yes,
then changes to the work type can affect whether a transaction is billable and therefore follow
the same rules as changes to the billable status for an expenditure item.
For imported expenditure items, you can change the work type if the Allow Adjustments
transaction source option is enabled on the transaction source that is associated with the
expenditure item. If the Allow Adjustments transaction source option is not enabled, then you
can change the work type only if the change does not affect the billable status or capitalizable
status of the expenditure item.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 12
Change Comment

Change Comment
You can edit the expenditure comment of an item. You can use this adjustment to make the
expenditure comment clearer if you are including the comment on an invoice backup report.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 13
Split Item

Split Item
You can split an item into two items so that you can process the two resulting split items
differently. The resulting split items are charged to the same project and task as the original
item. When you split an expenditure item charged to a contract project, you can select whether
each resulting split item is billable. When you split an expenditure item charged to a capital
project, you can select whether each resulting split item is capitalizable.
For imported expenditure items, you can split an item into two items only if the Allow
Adjustments transaction source option is enabled on the transaction source that is associated
with the expenditure item.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 14
Transfer Item

Transfer Item
You can transfer an item from one project and task to another project and task.
• Oracle Project Costing provides security as to which employees can transfer items
between projects. Cross-project users can transfer to all projects. Key members can
transfer to projects to which they are assigned. Oracle Project Costing performs a standard
validation on all transferred items.
• Oracle Project Costing also ensures that you only transfer items which pass the charge
controls of the project and task to which you are transferring. If the items you are
transferring do not pass the new project and task's charge controls, then you cannot
transfer the item.
• For imported expenditure items, you can transfer an item only if the Allow Adjustments
transaction source option is enabled on the transaction source that is associated with the
expenditure item.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 15
Practice - Perform a Split and a Transfer
Overview
In this practice, you will split an expenditure item on your project into two expenditure items and
transfer one of the new expenditure items to a different task. You will also run the cost
distribution program for your project to distribute the adjustment. Finally, you will run an
adjustment activity report for your project.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Perform a Split and a Transfer

Amy Marlin has informed you that she incorrectly charged 10 hours of clerical work for the
week to task 1.1. Amy should have charged 6 hours of the clerical work to task 2.1 and 4 hours
to task 1.1. Adjust the expenditure items on your XX Capital Services project accordingly.

First, change the comment for the expenditure item to indicate that the Amy's supervisor, Donald
Gray, has approved the transfer. Next, split the expenditure item for 10 hours of Amy's clerical
work on task 1.1 into expenditure items of 6 and 4 hours. When you split the expenditure items,
both should remain capitalizable. Finally, transfer 6 hours to task 2.1.

Cost Distribute the Adjusted Expenditure Items

Submit the concurrent program PRC: Distribute Labor Costs for your project to distribute the
adjusted expenditure items. Review the output report.

Note your Request ID __________________________

Run an Adjustment Activity Report

Donald Gray has requested an audit of all adjustment activity on the XX Capital Services project.
Run the AUD: Project Expenditure Adjustment Activity report to review all adjustment activity.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 16
Solution - Perform a Split and a Transfer
Perform a Split and a Transfer

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Project Expenditure Items window.

• (N) Expenditures > Expenditure Inquiry > Project

3. Query Amy Marlin's task 1.1 expenditure item for your XX Capital Services project.

• Enter the header find criteria::

− Project Number = XXCS
− Project Name = XX Capital Services
− Task Number = 1.1
− Task Name = Design Development

• (T) Resource

• Enter resource find criteria:

− Employee Number = 34
− Employee Name = Marlin, Ms. Amy

• (B) Find

4. Review the results of the query.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 17
 You see the expenditure item for 10 hours of clerical labor from the batch you entered in a
previous practice.

5. Position your cursor on the expenditure item.

6. Change the comment to note the approval for the adjustment.

• (M) Tools > Change Comment

• After the existing comment, enter a comment such as: Transfer of 6 hours to task 2.1
approved by Donald Gray.

• (B) OK

7. Split the expenditure item.

• (M) Tools > Split

• Enter the split quantities as specified in the following table:

Split Quantity Capitalizable

6 Yes
4 Yes

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 18
 • (B) OK

• (B) Yes in the Decision dialog box

8. Review the results. You will see three new expenditure items:
− A reversing item of -10 hours
− A new item of 6 hours
− A new item of 4 hours

9. Position your cursor on the expenditure item with a quantity of 6 hours.

10. Transfer the expenditure item.

• (M) Tools > Transfer 1

• Enter the transfer information as specified in the following table:

Field Value
Project Number XXCS
Name XX Capital Services
Task Number 2.1
Name Framing

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 19
 • (B) OK

• (B) Yes in the Decision dialog box

• (B) OK in the Note dialog box

• (B) Yes in the Decision dialog box

11. Review the results. You will see one new expenditure item for task 1.1:
− A reversing item of -6 hours for task 1.1

In addition, the transfer created a new item of 6 hours for task 2.1. Because the original
query was for task 1.1, you do not see the new item for task 2.1. Optionally, you can revise
the query criteria to see all expenditure items for your project.

Cost Distribute the Adjusted Expenditure Items

12. Navigate to the Submit a New Request window.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 20
 • (M) View > Requests

• (B) Submit a New Request

13. Select to run a Single Request.

14. (B) OK

15. Select the program PRC: Distribute Labor Costs from the list of values in the Name field
and Vision Services for the operating unit.

16. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS

17. (B) OK

18. (B) Submit

• Note your Request ID __________________________

19. (B) No in the Decision dialog box

20. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

21. Wait for the program to finish. When the program is complete, select the program.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 21
 • Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

22. Review the output report.

• (B) View Output

23. Close the output page.

Run an Adjustment Activity Report

24. (B) Submit a New Request

25. Select to run a Single Request.

26. (B) OK

27. Select the program AUD: Project Expenditure Adjustment Activity from the list of values in
the Name field and Vision Services for the operating unit.

28. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS

29. (B) OK

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 22
30. (B) Submit

• Note your Request ID __________________________

31. (B) No in the Decision dialog box

32. Find your request.

• (B) Find Requests

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

33. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

34. Review the output report.

• (B) View Output

35. Close the output page.

36. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 23
Change Currency Attributes

Change Currency Attributes

You can change the functional or project currency attributes of multi-currency transactions.
When you select Change Functional Currency Attributes or Change Project Currency
Attributes from the Reports menu, Oracle Project Costing displays a window where you can
enter changes in the following fields: Rate Type, Rate Date, and Exchange Rate.
• The window displays the project or functional currency, depending on which currency you
have selected, as well as the transaction currency.
• You can also change currency attributes for expenditure items using the Mass
Adjustments feature.
• If the project currency and the functional currency for an expenditure item are the same,
then you can select only the Functional Currency Attributes option. Oracle Project Costing
copies any changes you make to the functional currency attribute to the project currency
attributes.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 24
Adjustments to Multi-Currency Transactions

Adjustments to Multi-Currency Transactions

When you adjust multi-currency transactions, Oracle Project Costing must determine currency
attributes for the transactions that result. The following rules apply:
• The original expenditure item is reversed, with all the same amounts and currency
attributes as the original item.
• The new expenditure items are created and treated as new transactions, following the
standard default logic for currency attributes.
• For reversals and splits, the reversing and new items have the same currency attributes as
the original transaction.
• For a transfer, the reversing item has the same currency attributes as the original
transaction. For the new item, the cost distribution program uses the conversion rules for a
new transaction, taking the default currency attributes from the destination project.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 25
Adjustments to Supplier Costs

Adjustments to Supplier Costs

You can make adjustments to supplier costs in Oracle Project Costing, Oracle Purchasing, and
Oracle Payables.
In Oracle Project Costing, you can make the following adjustments to supplier cost and
expense report cost expenditure items:
• Transfer an expenditure item to another project or task
• Split an expenditure item
• Reclassify the billable or capitalizable status
• Place a billing hold or one-time hold
• Release a billing hold
• Recalculate burden costs
• Recalculate raw costs
- Note: For supplier costs, Oracle Project Costing does not recalculate the cost amount.
It only re-derives the default debit account.
• Recalculate revenue
• Change comment
Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 26
 • Change project functional currency attributes
• Reprocess cross charge transactions
• Mark for no cross charge processing
• Change transfer price currency attributes
In Oracle Purchasing and Oracle Payables, you can adjust the project-related information such
as the invoice amount, supplier, project, task, expenditure type, expenditure organization and
expenditure item date.
Restrictions to Supplier Cost Adjustments
Oracle Project Costing restricts the types of adjustments that you can make to supplier cost
expenditure items in Oracle Project Costing. The restrictions apply to supplier costs interfaced
to Oracle Project Costing from Oracle Purchasing and Oracle Payables, and to expense report
costs interfaced from Oracle Payables. For a discussion of these restrictions, see the lesson
titled “Integration with Oracle Purchasing and Oracle Payables.”

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 27
Mass Adjustments

Mass Adjustments
Use the Find Expenditure Items window or the Find Project Expenditure Items window to
process a mass adjustment of expenditures. The mass adjustment feature provides faster
performance when you adjust a large number of expenditures.
If you use the Find Project Expenditure Items window, you can mass adjust expenditure items
for a single project across operating units. The expenditure items that you adjust can cross
operating units, but you must have security access to an operating unit to view and adjust those
expenditure items. For example, a project has expenditure items associated with operating units
A, B, C, and D. If your responsibility only gives you access to operating units B and C, then
you can view and adjust only the expenditure items from operating units B and C.
If you use the Find Expenditure Items window, you can mass adjust expenditure items across
projects, within a single operating unit. If you have access to more than one operating unit,
then you must select the operating unit. If you have access to only one operating unit, then that
operating is the default value. Oracle Project Costing adjust only the expenditure items that
correspond to the current operating unit.
To perform mass adjustment of expenditures:
1. Navigate to the Find Project Expenditure Items or Find Expenditure Items window.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 28
 2. Enter your search criteria.
3. Choose Mass Adjust.
4. From the Mass Adjust list, select the adjustment to perform on the selected expenditures.
5. Choose the processing method for the adjustments. You can choose to either process
adjustments online or submit a concurrent program to process the adjustments. If you
choose to submit the concurrent program to process the adjustments, then Oracle Project
Costing submits the PRC: Adjust Expenditure Items concurrent program.
6. Review the results. When you process adjustments online, Oracle Project Costing displays
a message when the adjustment program is complete. If you process adjustments using a
concurrent program, you can review the output report when the program is complete.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 29
Correct Approved Expenditure Items

Correct Approved Expenditure Items

When correcting approved expenditure items:
• Reverse the original item and then create a new item using the correct information.
• You can also select the Transfer adjustment action to change the project and task
assignment of an expenditure item.
• For supplier cost expenditure items, you cannot correct the amount, expenditure type, or
supplier in Oracle Project Costing. You must correct these attributes in the source
application: Oracle Payables or Oracle Purchasing. You can use the Review Transactions
window to update the expenditure item date in Oracle Project Costing only if the date fails
validation when you run the program PRC: Interface Supplier Costs.
• You must correct expenditure items imported from Oracle Inventory or Oracle
Manufacturing in their respective systems except for the transactions with transaction
source Inventory Misc. You cannot reverse or correct expenditure items from these
applications in Oracle Project Costing.
To correct an approved expenditure item:
1. Create a new batch for the correction items.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 30
 - The Expenditure Ending date must match the week that includes the expenditure item
you are reversing.
- Optionally check the All Negative Transactions Entered As Unmatched check box if
you want to enter transactions with negative amounts and do not want Oracle Project
Costing to search for corresponding existing transactions.
2. In the Expenditure Items window, select the Reverse Original button.
- Instead of choosing the Reverse Original button, you can enter a negative amount in
the Quantity field. Precede negative amounts with a minus (–) sign. If the All
Negative Transactions Entered as Unmatched check box is not enabled, then Oracle
Project Costing searches for a matching expenditure item and alerts you if it is unable
to find a match.
3. In the Reverse Expenditure Items window, specify the items that you want to reverse.
4. Select the Reversal button.
- Oracle Project Costing inserts a reversing (negative) expenditure item into the batch.
5. Finish entering the batch and submit the batch as usual.
- Expenditure batches can contain both positive and negative expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 31
Practice - Correct an Approved Expenditure Item
Overview
In this practice, you will correct an approved expenditure item that Anne Hamilton charged to an
incorrect expenditure type.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
After reviewing her timecards, Anne Hamilton realizes that she incorrectly charged 10 hours of
her time to your XX Capital Services project as Supervision. Anne has asked you to change the
expenditure type for the timecard with the earliest date for the week from Supervision to Sales.

Enter the Batch Information

Enter a timecard batch for the current week so that you can reverse the incorrect expenditure
item and enter a new corrected expenditure item. Name the batch XXCORRECTION.

Find and Reverse an Expenditure Item

Enter an expenditure for Anne Hamilton and then select the Reverse Original... button to find
and reverse the incorrect expenditure item. Reverse the Supervision expenditure item with the
earliest date for the current week that Ann charged to your project.

Enter a Corrected Expenditure Item

Enter a new corrected expenditure item as specified in the following tables:

Expnd Item Project Number Task Expnd Type Assignment Name

Date Number
Same date as the XXCS 3.0 Sales Unscheduled
reversing item

Work Type UOM Quantity Comment

Internal-Overhead Hours 10 Sales meeting

Submit and Release the Batch

Submit and release the batch.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 32
Solution - Correct an Approved Expenditure Item
Enter the Batch Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Expenditure Batches window.

• (N) Expenditures > Pre Approved Batches > Enter

3. Enter the batch information as specified in the following table:

Field Value
Operating Unit Vision Services
Batch Name XXCORRECTION
Ending Date This Sunday's Date
Class Timecards
Description Enter a brief description
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Option Not Available
Control Totals Leave Blank
Control Count Leave Blank

4. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 33
5. (B) Expenditures

Find and Reverse an Expenditure Item

6. Enter the expenditure as specified in the following table:

Employee Name Employee Organization Expnd Ending Control Total

Number Date
Hamilton, Ms. Anne 37 Services-East This Sunday's Date Leave Blank

7. (I) Save

8. (B) Reverse Original

9. Find and select the expenditure item to reverse:

• Enter the find criteria:

− Employee = Hamilton, Ms. Anne (view only)
− Org = Services-East (view only)
− Project Number = XXCS

• (B) Find

• Select the Supervision expenditure item with the earliest expenditure item date.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 34
 Note: Hold down the Ctrl key on your keyboard and left-click the expenditure item to select
it.

10. (B) Reverse 1

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 35
 Oracle Project Costing automatically creates the reversing expenditure item.

Enter a Corrected Expenditure Item

11. Place your cursor in the first empty row after the reversing expenditure item.

12. Enter a new corrected expenditure item as specified in the following tables:

Expnd Item Project Number Task Expnd Type Assignment Name

Date Number
Same date as the XXCS 3.0 Sales Unscheduled
reversing item

Work Type UOM Quantity Comment

Internal-Overhead Hours 10 Sales meeting

13. (I) Save

Submit and Release the Batch

14. Close the Expenditures window and return to the Expenditure Batches window.

15. (B) Submit

16. (B) Release

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 36
17. Close the Expenditure Batches window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 37
Processing Adjustments

Processing Adjustments
After you perform adjustment actions, run the appropriate programs to process the adjustments:
1. Distribute Costs - Run the appropriate cost distribution programs to process the
adjustments. For example, if you adjust timecard expenditure items on a project that uses
total burdened accounting, then you run PRC: Distribute Labor Costs and PRC: Distribute
Total Burdened Costs.
2. Generate Accounting Events - Next, run PRC: Generate Cost Accounting Events to
derive the default credit accounts as needed and generate accounting events for the
adjustments in Oracle Subledger Accounting. You can either run the program separately
for each type of cost (select appropriate process category) or once for all unprocessed cost
distribution lines (leave the Process Category parameter blank).
3. Create Accounting - Finally, run PRC: Create Accounting to create subledger accounting
entries in Oracle Subledger Accounting for the accounting events. You can set the
Transfer to General Ledger parameter to Yes to enable the program to automatically
transfer the final accounting to Oracle General Ledger and run the Journal Import
program. If you choose to transfer to Oracle General Ledger, then you can also set the
parameter Post in General Ledger to Yes to enable the program to automatically post

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 38
 successfully imported journal entries in Oracle General Ledger. Otherwise, you can run
PRC: Transfer Journal Entries to GL to transfer the final subledger journal entries from
Oracle Subledger Accounting to Oracle General Ledger. You can either run the programs
separately for each type of cost (select appropriate process category) or once for all
unprocessed cost distribution lines (leave the Process Category parameter blank).
Alternatively, you can also choose the Run Request button on the Expenditure Items window or
Project Expenditure Items window to initiate a streamline process. In addition, you can submit
project and interface streamline processes from the Submit Request window.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 39
Results of Adjustment Processing

Results of Adjustment Processing

After you run the appropriate programs to recalculate the adjusted expenditure items, you can
review the results of the adjustments. When you process an adjustment, a cost adjustment
results if one or more of the following attributes is different from the original value:
• Raw cost amount
• Burden cost amount
• Account to which the cost is charged
• Billable/Capitalizable status of the item
Corrections to Pre-Approved Expenditure Items, Transfers, and Splits
When processing a reversing item which resulted from a correction of a pre-approved
expenditure item, a transfer, or a split, the cost distribution programs use the same cost rate as
the original item to ensure that the cost nets to zero for the original and reversing item. The
program charges the reversing item to an account based on the original distribution line. The
program processes the new positive item resulting from a transfer just as a new expenditure
item is processed. To process new items for a split the same way that a new expenditure item is
processed, you must mark the item for recalculation.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 40
 Accounting for Cost Adjustments
When a cost distribution program encounters an item that requires a cost adjustment, the
program updates the expenditure item with the new raw and burden cost rates and amounts,
and creates new cost distribution lines. The program creates a reversing cost distribution line
and a new cost distribution line. These lines form the audit trail of cost adjustments.
As a result of adjustment processing, the following two different sets of account code
combinations exist:
• The original cost account code combination and original cost clearing account code
combination.
• The adjustment cost account code combination and adjustment cost clearing account code
combination.
Oracle Project Costing copies the account code combination IDs (CCIDs) from the original
transaction to the reversing transaction and assigns the cost adjustment lines to the earliest
open or future GL period. For additional information, see the Oracle Project Costing User
Guide.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 41
Agenda

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 42
Audit Reporting for Expenditure Adjustments

Audit Reporting for Expenditure Adjustments

Oracle Project Costing provides an audit trail of all adjustments performed on an expenditure
item. The audit trail records the following information about the adjustment:
• The name of the user who performed the adjustment.
• The type of adjustment action performed.
• The date and time that the adjustment was performed.
• The window from which the adjustment action was performed.
Run audit report concurrent programs to produce reports for review:
• AUD: Project Expenditure Adjustment Activity - Use this report to review all
adjustments users made to expenditure items of a particular project. Your accounting
department can submit this report regularly to audit the kinds of expenditure adjustments
being made for a project. For example, they can use this report to identify any expenditure
adjustments that are unauthorized or against company policy.
• AUD: Supplier Cost Audit Report - Use this report to audit transactions between Oracle
Project Costing, Oracle Purchasing, Oracle Payables, Oracle Subledger Accounting, and
Oracle General Ledger. This report lists all supplier cost transactions in Oracle Project

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 43
 Costing for a selected operating unit. When you run the report, you can specify an
adjustment type to limit the transactions that you want to include in the report.
• MGT: Transfer Activity - Use this report to review the expenditure item transfers into
and out of a particular project. You can use this report as an audit tool to control project
costs by identifying incorrect or unauthorized transfers for a project. You can also use this
report to verify any expenditure item transfers that you perform. For each specified
project, this report shows you the expenditure items transferring into or out of the project
and the transfer history of each of these expenditure items. For each expenditure item
listed, this report displays the item’s cost amount, its quantity, and either the destination
project and task numbers or the originating project and task numbers, depending on the
expenditure item’s transfer direction.

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 44
Summary

Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 45
 Copyright © 2007, Oracle. All rights reserved.

Performing Cost Adjustments

Chapter 10 - Page 46
 Integration with Oracle
Purchasing and Oracle
Payables
Chapter 11

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 2
Integration with Oracle Purchasing and Oracle Payables

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 5
Overview of Supplier Costs

Overview of Supplier Costs

Oracle Project Costing fully integrates with Oracle Purchasing and Oracle Payables and
enables you to enter project-related documents using those products. You can use both Oracle
Purchasing and Oracle Payables, or just Oracle Payables. In addition, you can use Oracle
iProcurement to enter project-related requisitions.
When you enter project-related transactions in Oracle Purchasing and Oracle Payables, you
enter project information on your source document. Oracle Purchasing, Oracle Payables, and
Oracle Project Costing carry the project information through the document flow: from the
requisition to the purchase order in Oracle Purchasing, to the supplier invoice in Oracle
Payables, and to the project expenditure in Oracle Project Costing. The accounting method for
your ledger determines when you can interface supplier costs to Oracle Project Costing.
Note: You can use Transaction Import in Oracle Project Costing to import accounted supplier
invoices directly into Oracle Project Costing from 3rd party systems.
Note: For information about project-related contingent worker timecards with purchase order
integration see lessons titled "Entering Expenditures" and "Integration with Oracle Time and
Labor."

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 6
Oracle Purchasing and Oracle Payables (Accrual)

Oracle Purchasing and Oracle Payables (Accrual)

When the primary accounting method is accrual basis accounting, you interface perpetual
receipt accruals, invoice variances, invoice distributions, and payment discounts to Oracle
Project Costing as actual costs.
Managing Project-Related Supplier Costs in Oracle Purchasing
In Oracle Purchasing, you can enter project information for requisition distribution lines to
associate cost commitments with projects. You can also enter project information on
requisitions in Oracle iProcurement.
When you autocreate a purchase order, Oracle Purchasing copies the distribution lines from the
requisition to the purchase order. You can also create a purchase order without first entering a
requisition. In this case, you enter project information for the purchase order distribution lines
to associate cost commitments with projects. For a blanket purchase order, you enter project
information when you create a release.
You can optionally enable the Accrue at Receipt check box when you enter a purchase order
shipment to make it eligible for receipt accrual processing. After you enter a receiving
transaction for an accrue-on-receipt purchase order shipment, you create subledger accounting

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 7
 for the receiving transaction. Next, you interface the costs associated with the receipt to Oracle
Project Costing as actual costs.
Managing Project-Related Supplier Costs in Oracle Payables
In Oracle Payables, you can match a supplier invoice to an existing purchase order or receiving
transaction. Oracle Payables automatically copies the project information from the purchase
order distribution lines when you perform the match. You can also create non-matched supplier
invoices in Oracle Payables and enter invoice distributions to charge invoice costs to projects.
After you validate the invoice and create accounting for it in final mode, you interface project-
related invoice distributions to Oracle Project Costing as actual costs. In addition, this program
sends any supplier invoice cost variances from receipt accruals to Oracle Project Costing.
Project-Related Prepayment Invoices
Oracle Project Costing summarizes prepayment invoices that are not matched to purchase
orders as cost commitments, not as actual costs, and displays the commitments in the Project
Status Inquiry window or the Project Performance page, depending on the summarization
model you use. Oracle Project Costing tracks only prepayment invoices not matched to
purchase orders as commitments because Oracle Project Costing tracks commitments for
prepayment invoices matched to purchase orders as purchase order commitments. The
unmatched prepayment invoice commitment amount is the outstanding unapplied amount of
the prepayment invoice. Oracle Project Costing calculates the amount by subtracting
prepayment application amounts from the prepayment invoice amount.
Project-Related Payment Discounts
You can set up Oracle Payables to apply discounts to payments. After you enter a payment
with discounts, you interface the discounts to Oracle Project Costing to adjust the previously
interfaced supplier costs. When the program PRC: Interface Supplier Costs interfaces discount
amounts to Oracle Project Costing, the interface program creates an expenditure item for each
discount line. If you pay an invoice before you interface the invoice distribution lines to Oracle
Project Costing, and you set the parameters for the program PRC: Interface Supplier Costs to
interface both supplier invoices and discounts, then the interface program creates the invoice
distribution expenditure items and invoice discount expenditure items at the same time.
Interfacing Supplier Costs to Oracle Project Costing
You run the program PRC: Interface Supplier Costs to interface actual costs to Oracle Project
Costing from Oracle Purchasing and Oracle Payables. This program uses Transaction Import to
move the costs into the expenditures table in Oracle Project Costing. Each distribution line
becomes a separate expenditure item in Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 8
Oracle Purchasing and Oracle Payables (Cash)

Oracle Purchasing and Oracle Payables (Cash)

When the primary accounting method in Oracle Payables is cash basis accounting, you
interface payments to Oracle Project Costing as actual costs.
Managing Project-Related Supplier Costs in Oracle Purchasing
In Oracle Purchasing, you can enter project information for requisition distribution lines to
associate cost commitments with projects. Oracle Project Costing tracks project-related
supplier costs in Oracle Purchasing as commitments. You can also enter project information on
requisitions in Oracle iProcurement.
When you autocreate a purchase order, Oracle Purchasing copies the distribution lines from the
requisition to the purchase order. You can also create a purchase order without first entering a
requisition. In this case, you enter project information on purchase order distribution lines to
associate cost commitments with projects. For a blanket purchase order, you enter project
information when you create a release.
You enter receiving transactions for purchase order lines in Oracle Purchasing. With cash basis
accounting, you do not flag purchase order lines to accrue at receipt and you cannot interface
receipts to Oracle Project Costing as actual costs.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 9
 Managing Project-Related Supplier Costs in Oracle Payables
In Oracle Payables, you can match a supplier invoice to an existing purchase order or receiving
transaction. Oracle Payables automatically copies the project information from the purchase
order distribution lines when you perform the match. You can also create non-matched supplier
invoices in Oracle Payables and enter invoice distributions to charge invoice costs to projects.
You cannot interface costs from Oracle Payables to Oracle Project Costing as actual costs until
you pay the invoice.
After you enter payments for a supplier invoice, you interface payments to Oracle Project
Costing as actual costs. Oracle Payables allocates payment amounts to invoice distributions.
You can interface partially paid invoices to Oracle Project Costing. If you void a payment in
Oracle Payables, then Oracle Payables automatically reverses the project-related costs when
you interface the reversing items to Oracle Project Costing.
Project-Related Prepayment Invoices
Oracle Projects summarizes prepayment invoices that are not matched to purchase orders as
cost commitments, not as actual costs, and displays the commitments in the Project Status
Inquiry window or the Project Performance page, depending on the summarization model you
use. Oracle Projects tracks only prepayment invoices not matched to purchase orders as
commitments because Oracle Projects tracks commitments for prepayment invoices matched to
purchase orders as purchase order commitments. The unmatched prepayment invoice
commitment amount is the outstanding unapplied amount of the prepayment invoice. Oracle
Projects calculates the amount by subtracting prepayment application amounts from the
prepayment invoice amount. In addition, you cannot interface discounts related to prepayments
to Oracle Projects as actual costs.
Project-Related Payment Discounts
You can set up Oracle Payables to apply discounts to payments. If you set up Oracle Project
Costing to interface discounts, then the interface program creates an expenditure item for the
amount of the payment, minus the discount amount. If you set up Oracle Project Costing so
that the interface program does not interface discounts, then interface program creates the two
expenditure items. One expenditure item is for the payment amount minus the discount, and
the other expenditure item is for the amount of the discount. Together, the two expenditure
items total to the full amount of the cost.
Interfacing Supplier Costs to Oracle Project Costing
You run the program PRC: Interface Supplier Costs to interface supplier costs to Oracle
Project Costing from Oracle Payables as actual costs. This program uses Transaction Import to
move the costs into the expenditures table in Oracle Project Costing. Each distribution line
becomes a separate expenditure item in Oracle Project Costing.
Note: The parameter Interface AP Discounts does not apply to cash basis accounting.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 10
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 11
Entering Project-Related Information

Entering Project-Related Information

When you enter requisitions, purchase orders, and supplier invoices, you specify the following
project-related information:
• Project number - The project incurring the charge.
• Task Number - The lowest level task incurring the charge
• Expenditure Type - A classification of the cost. The expenditure type must have an
expenditure type class of Supplier Invoices or Expense Reports.
• Expenditure Organization - The organization that is ordering or has ordered the goods or
services, which can be different from the project owning organization. The organization
you specify in the profile option PA: Default Expenditure Organization in AP/PO is the
default value for the expenditure organization.
• Expenditure Item Date - The date that you expect to incur the expense for the goods or
services that you are requesting for a requisition or purchase order, or the date that you
incur the charge for an invoice. This date is used during online validation using project
transaction controls, and becomes the expenditure item date on the expenditure item in
Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 12
 Oracle Payables uses the profile option PA: Default Expenditure Item Date for Supplier
Cost during the invoice match process to determine the default expenditure item date for
supplier invoice distribution lines. Oracle Payables also uses the profile option to
determine the default expenditure item date when you enter supplier invoice distribution
lines for unmatched invoices. Oracle Project Costing uses this profile option when you run
the program PRC: Interface Supplier Costs to determine the expenditure item date for
Oracle Purchasing receipts, invoice payments, and discounts.
• Project Quantity - The quantity of goods or services for which you are charged. You can
enter data in this field only in Oracle Payables, as this field is applicable for invoice lines
and distributions only.
If the Rate Required option for the selected expenditure type is enabled in Oracle Project
Costing, then you must enter a quantity. When you interface the invoice distribution to
Oracle Project Costing, Oracle Project Costing copies the quantity and amount to the
expenditure item and calculates the rate. If Rate Required option for the selected
expenditure type is disabled, then the quantity of the expenditure item is set to the amount
you enter in Oracle Payables.
You do not enter the Projects Quantity for documents in Oracle Purchasing because you
do not know the quantity for which you will be invoiced. Oracle Payables automatically
sets the Projects Quantity field to the quantity invoiced of the invoice distribution line
when you match an invoice to a purchase order or receipt.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 13
Validating Project Information

Validating Project Information

When you enter project information and either save or move to the next distribution line, the
information is validated against the project transaction control information in Oracle Project
Costing. This validation ensures that you can charge the type of expenditure to the project and
task on the expenditure item date that you specified. If the information that you entered does
not pass, then you must enter valid chargeable project information based on the transaction
controls in Oracle Project Costing before you can continue. If you cannot determine valid
project information that is chargeable, you can delete the values and close the window.
When you create a distribution set in Oracle Payables, the project information for a distribution
set line is not validated against the project transaction control information in Oracle Project
Costing, because you do not enter an expenditure item date which is required for transaction
control validation. When you create the distribution set lines, Oracle Payables validates the
project and task number.
When you enable enhanced period processing in Oracle Project Costing, Oracle Payables gives
you a warning message during data entry if a project-related supplier invoice distribution falls
into a GL period with a status other than Open or Future in Oracle Project Costing. Oracle
Payables notifies you if a project-related invoice has a distribution that fails validation.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 14
Budgetary Control Activation

Budgetary Control Activation

In Oracle Purchasing and Oracle Payables, you can activate budgetary control validation when
you select the Check Funds option for a transaction, and also during the transaction approval
process. You can enforce budgetary controls against a GL budget and a project cost budget.
When you select the Check Funds option, a successful budgetary control result does not update
budgetary control balances. You use the Check Funds option to verify available funds for a
transaction before requesting approval for the transaction. During the transaction approval
processes, a validation of budgetary controls is automatically performed. If the validation is
successful, the transaction is approved and budgetary control balances are updated.
You can enforce budgetary controls against a project budget. Budgetary controls enable you to
monitor and control expense commitment transactions entered for a project, based on a project
cost budget. Expense commitment transactions are transactions for non-inventory items.
For additional information, see the lesson titled "Appendix B: Budgetary Controls and Budget
Integration."

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 15
Commitment Reporting

Commitment Reporting
You can report the total cost of a project by reporting the committed cost along with the actual
cost. You can report the flow of committed cost, including associated nonrecoverable tax
amounts, through Oracle Purchasing and Oracle Payables. These committed costs can include:
• Open requisitions (unpurchased requisitions).
• Open purchase orders (uninvoiced and non-delivered).
• Prepayment invoices that are not matched to a purchase order, and not yet applied to a
supplier invoice.
- Note: The unmatched prepayment invoice commitment amount is the outstanding
unapplied amount of the prepayment invoice. Oracle Project Costing calculates the
amount by subtracting prepayment application amounts from the prepayment invoice
amount.
• Unmatched pending invoices (supplier invoices not yet interfaced to Oracle Project
Costing to be included in project costs).
Oracle Project Costing shows prepayment invoices that are not matched to purchase orders as
invoice commitments. The matched prepayment invoice does not appear as a separate
commitment.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 16
 Both unapproved and approved open requisitions and purchase orders show as commitments
after you run the concurrent program to update project summary amounts. When you drill-
down to view commitment details, if the Approved check box is enabled, then the requisition or
purchase order associated with the commitment has been approved.
You can report summary committed cost amounts for your projects and tasks, and can also
review detail requisitions and purchase orders that backup the summary amounts.
Note to students: You will view committed and actual supplier costs on your project in
upcoming practices.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 17
Guided Demonstration - Review Committed Costs
Review Committed Costs

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Project Status window.

• (N) Project Status Inquiry > Project Status Inquiry

3. Find the Cost Reimbursable project.

• Enter the find criteria:

− Operating Unit = Vision Services
− Number = Cost Reimbursable
− Name = Cost Reimbursable

• (B) Find

4. View the amount in the Commit Amt column.

5. View the details of the commitments

• (B) Commitments

This project has Supplier Invoice, Purchase Orders, and Requisition commitments.

• Review the document number related to each commitment.

• Review whether the each commitment is related to an approved document or not.

6. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 18
Accounting Transactions

Accounting Transactions
Oracle Purchasing and Oracle Payables use the Account Generator to determine the default
accounting for each project-related distribution line based on the project information that you
enter.
Oracle Purchasing builds the account number for the charge, accrual, and variance distribution
accounts based on the Account Generator assignments that you define during implementation.
You can define your Account Generator processes so that project-related requisitions and
purchase orders use project-related information in the Account Generator assignments and non-
project-related documents use the Account Generator assignments predefined by Oracle
Purchasing. If you use encumbrance accounting, you can also define assignments for the
budget account based on project information.
In Oracle Payables, the Account Generator builds the default expense account number for
project-related invoices using assignments that you define during implementation. You must
enter the account number for non-project-related invoices. The Account Generator determines
the default liability account for all invoices based on the liability account defaults provided by
Oracle Payables.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 19
 When you create subledger accounting for the distributions lines, Oracle Subledger Accounting
uses the predefined setup that Oracle Purchasing, Oracle Payables, and Oracle Project Costing
provide so that the create accounting program accepts the default accounts without change. If
you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites the default account.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 20
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 21
Integration with Oracle Purchasing

Integration with Oracle Purchasing

When you enter project-related transactions in Oracle Purchasing and Oracle iProcurement,
you only need to enter project information on the source document; either the requisition or the
purchase order.
Entering Requisitions
You enter project-related purchase requisitions using the Requisitions window in Oracle
Purchasing. A requisition can have a combination of project-related and non-project-related
distribution lines. In addition, you can use the Buyer WorkCenter in Oracle Purchasing to
review requisitions. You can also use Oracle iProcurement to enter project-related purchase
requisitions.
Using AutoCreate
When you automatically create purchase orders from project-related requisitions in the
AutoCreate Documents window, Oracle Purchasing copies the project information and the
accounting information from the requisition to the purchase order. You do not need to enter
any additional project-related information on your purchase order when you use this feature.
You can change the project information on the purchase order that was copied from the
requisition, though in this case, the project information on the requisition is not updated.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 22
 Entering Purchase Orders
If your company does not use online requisitions or the AutoCreate feature, you can enter
project-related information directly on your standard purchase orders. The Account Generator
automatically creates the account information, based on the project-related information you
enter. You can also use the Buyer WorkCenter in Oracle Purchasing to enter project-related
purchase orders.
Entering Releases
You enter project-related releases against blanket purchase agreements and planned purchase
orders. If the release distribution line is project-related, then you can specify project
information.
Recording Receipts and Delivery
When a purchase order shipment is flagged to accrue at receipt and the purchased goods are
delivered to an expense destination, you enter a receiving transaction for the purchase order in
Oracle Purchasing. Next, you interface receipt accruals to Oracle Project Costing as actual
transactions. This feature enables you to recognize the cost to your project in the period in
which it is incurred rather than in the period in which it is invoiced.
Note: You must create subledger accounting for receiving transactions in final mode before
you can:
• View accounting for receipt accrual expenditure items in Oracle Project Costing.
• Create accounting for adjustments made in Oracle Project Costing to receipt accrual
expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 23
Documents in Oracle Purchasing

Documents in Oracle Purchasing

You enter project information for distribution lines in Oracle Purchasing:
• Requisitions have three levels: the requisition header, requisition lines, and requisition
distributions.
• Releases have three levels: the release header, release lines, and release distributions.
• Purchase orders have four levels: the purchase order header, purchase order lines,
purchase order shipments, and purchase order distributions.
You can create project-oriented folders at the distribution line level to make it easier and faster
to enter project-related information.
For information about entering requisitions, releases, and purchase orders, see the Oracle
Purchasing User's Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 24
Practice - Enter a Project-Related Requisition
Overview
In this practice, you will create a project-related requisition in Oracle iProcurement and charge it
to your XX Capital Services project.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

• If the student is not using the SERVICES User ID, then the instructor must ensure that
each employee associated with a User ID is assigned a position in Oracle HRMS and
that the position has adequate signing authority in Oracle Purchasing.

Tasks
Enter and Submit a Requisition in Oracle iProcurement

Your project manager has asked you to order 10 coffee makers for the project offices. You can
charge the coffee makers to task 1.2 of the XX Capital Services project.

Enter and submit a non-catalog requisition in Oracle iProcurement. Use the responsibility
iProcurement, Vision Services (USA). Enter the request information as specified on the following
table:

Field Value
Item Type Goods billed by quantity
Item Description Coffee makers for project office
Category MISC.MISC
Quantity 10
Unit of Measure Each
Unit Price 35.99
Currency USD
RFQ Required No
Negotiated No
Contract Number Leave Blank
New Supplier No
Supplier Name Consolidated Supplies

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 25
 Site HOUSTON
Contact Name Fuller, Ernie
Phone 713 678-4553
Supplier Item Leave Blank

During checkout, charge the project as specified in the following table:

Field Value
Project XXCS
Task 1.2
Expenditure Type Supplies
Expenditure Org Services-East
Expenditure Item Date Today's Date

Be sure to enter a brief justification and a message to the buyer. Your requisition does not require
any approvals. Submit your requisition.

Note your requisition number: ________________________________

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 26
Solution - Enter a Project-Related Requisition
Enter and Submit a Requisition in Oracle iProcurement

1. Responsibility = iProcurement, Vision Services (USA)

2. Enter a non-catalog request.

• (T) Shop

• (ST) Non-Catalog Request

• Enter the request information as specified on the following table:

Field Value
Item Type Goods billed by quantity
Item Description Coffee makers for project office
Category MISC.MISC
Quantity 10
Unit of Measure Each
Unit Price 35.99
Currency USD
RFQ Required No
Negotiated No
Contract Number Leave Blank
New Supplier No
Supplier Name Consolidated Supplies
Site HOUSTON
Contact Name Fuller, Ernie
Phone 713 678-4553
Supplier Item Leave Blank

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 27
 • (B) Add to Cart

3. (B) View Cart and Checkout

4. (B) Checkout

5. Revise the project information in the Billing region as specified in the following table:

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 28
 Field Value
Project XXCS
Task 1.2
Expenditure Type Supplies
Expenditure Org Services-East
Expenditure Item Date Today's Date

6. (B) Next

7. Enter a justification and a note to the buyer.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 29
 Note: Your requisition does not require any approvals.

8. (B) Next

9. Review and submit the requisition.

• (H) Show

• Review the information

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 30
 • (B) Submit

• Note your requisition number: ________________________________

10. (H) Close Window

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 31
Practice - AutoCreate a Project-Related Purchase Order
Overview
In this practice, you will AutoCreate a purchase order in Oracle Purchasing using the requisition
that you submitted in the previous practice. You will also view the purchase order as a
commitment in Project Status Inquiry.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

• If the student is not using the SERVICES User ID, then the instructor must ensure that
the employee associated with the student's User IDs is set up as a Buyer in Oracle
Purchasing and that the employee's position has adequate signing authority.

• IMPORTANT: The instructor must set the current reporting period for Vision Services
operating unit to the period for the current week before students update summary
amounts:

• Responsibility = Projects, Vision Services (USA)

• (N) Setup > System > PA Periods

• (B) Set Reporting Period

• Select the period for the current week.

• (B) OK

• (I) Save

Tasks
AutoCreate a Purchase Order

The project manager of the XX Capital Services project has asked you to create a purchase order
for the coffee makers. In Oracle Purchasing, use your requisition from the previous practice to
AutoCreate a new purchase order. Use the responsibility Purchasing, Vision Services (USA).

Record your new document number ______________________

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 32
Review and Approve the Purchase Order

After you AutoCreate the new purchase order, review the project charging instructions on the
Project tab of the Distributions window (accessed from the Shipments window). You entered
this project information on the requisition and Oracle Purchasing copied it to the purchase order.

When you are ready, approve the purchase order. Verify that the status of the purchase order is
Approved.

View the Commitment in Project Status Inquiry

Switch your responsibility to Projects, Vision Services (USA) to view the commitment against
your project. First run the program PRC: Update Project Summary Amounts for a Single Project
for your XX Capital Services project.

Note your Request ID __________________________

Use Project Status Inquiry to review the commitment details.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 33
Solution - AutoCreate a Project-Related Purchase Order
AutoCreate a Purchase Order

1. Responsibility = Purchasing, Vision Services (USA)

2. Navigate to the Find Requisition Lines window.

• (N) AutoCreate

3. Find the line from your requisition.

• (B) Clear

• Enter the following find criteria:

− Operating Unit = Vision Services
− Approved = Yes
− Requisition = Your requisition number from the previous practice

• (B) Find

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 34
4. Enable the check box next to the line for your requisition.

5. (B) Automatic

6. Review the information on the New Document window. Accept the default values.

7. (B) Create

8. Record your new document number ______________________

Review and Approve the Purchase Order

9. Review the purchase order header information.

10. Review the project-related distribution line.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 35
 • (B) Shipments

• (B) Distributions

• (T) Project

Note: You entered this project information on the requisition and Oracle Purchasing copied
it to the purchase order.

11. Close the Distributions and the Shipments windows.

12. (B) Approve

13. Enable the Submit for Approval option.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 36
14. (B) OK

15. Verify that the status of the purchase order is now Approved.

16. Close the AutoCreate for Purchase Orders window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 37
View the Commitment in Project Status Inquiry

17. Switch your responsibility.

• (M) File > Switch Responsibility

• Select Projects, Vision Services (USA).

• (B) OK

18. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

19. Select to run a Single Request.

20. (B) OK

21. Select the program PRC: Update Project Summary Amounts for a Single Project from the
list of values in the Name field and Vision Services for the operating unit.

22. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS
Through Date Leave Blank
Summarize Cost Yes
Expenditure Type Class Leave Blank
Summarize Revenue Yes
Summarize Budgets Yes
Budget Type Leave Blank
Summarize Commitments Yes

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 38
23. (B) OK

24. (B) Submit

• Note your Request ID __________________________

25. (B) No in the Decision dialog box

26. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

27. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

28. Review the output report.

• (B) View Output

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 39
29. Close the output page and the Requests window.

30. Navigate to the Find Project Status window.

• (N) Project Status Inquiry > Project Status Inquiry

31. Find the XX Capital Services project.

• Enter the find criteria:

− Operating Unit = Vision Services
− Number = XXCS
− Name = XX Capital Services

• (B) Find

32. View the amount in the Commit Amt column.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 40
33. View the details of the commitments

• (B) Commitments

• (B) Find

34. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 41
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 42
Supplier Costs and Accounting Methods

Supplier Costs and Accounting Methods

When you define a ledger, you can enable an option for the ledger to use cash basis
accounting. Otherwise, the ledger uses accrual basis accounting.
• Accrual basis accounting - Oracle Payables creates accounting entries for invoices and
payments. If you use accrual basis accounting, then you can set up Oracle Purchasing to
accrue expense items at receipt.
• Cash basis accounting - Oracle Payables accounts only for payments and does not record
liability information for invoices.
When you define a primary ledger, you can optionally assign one or more secondary ledgers to
it. The primary ledger acts as the main record-keeping ledger. The secondary ledger is an
optional, additional ledger that is associated with the primary ledger. For example, one ledger
can use accrual basis accounting and the other can use cash basis accounting. This approach is
also known as combined basis accounting. Oracle Payables records invoice accounting entries
in both ledgers. The accounting method of the primary ledger, cash basis or accrual basis,
determines the flow of actual costs to Oracle Project Costing. When you make supplier cost
adjustments in Oracle Project Costing, Oracle Project Costing does not create accounting
entries for a secondary ledger if the accounting basis differs from the primary ledger.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 43
Integration with Oracle Payables (Accrual)

Integration with Oracle Payables (Accrual)

When the primary accounting method is accrual basis accounting, you interface perpetual
receipt accruals, invoice variances, invoice distributions, and payment discounts to Oracle
Project Costing as actual costs.
Matching Invoices
If you use Oracle Purchasing and have already associated project-related information to a
purchase order, then you can match the invoice to a purchase order or receipt using the
Invoices window. Oracle Payables automatically copies the project information to the invoice.
You cannot change the project information that is copied from the purchase order to the
invoice, with the exception of the expenditure item date. Oracle Payables uses the profile
option PA: Default Expenditure Item Date for Supplier Cost during the invoice match process
to determine the default expenditure item date for supplier invoice distribution lines. You can
override the default expenditure item date for invoice distribution lines on the Invoice
Workbench in Oracle Payables.
Entering Invoices
You can enter project-related invoices directly in Oracle Payables. You can enter project-
related information at the invoice level, which populates the project-related information at the

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 44
 invoice line level. You can override these default values at the invoice line level. The project-
related information that you enter at the invoice line level populates the invoice distributions
for the line. You can override this default information at the invoice distribution line level. An
invoice can have both project-related and non-project-related distributions.
Importing Invoices
You can import projects-related invoices through the Payables Open Interface tables. For
example, you can import expense report invoices from Oracle Internet Expenses.
Tracking Commitments
You can track project-related invoices as commitments in Oracle Project Costing before you
interface them as actual costs.
Posting Invoices
If you use accrual basis accounting, then you must validate the invoice and create subledger
accounting for it in final mode in Oracle Payables before you can interface the invoice to
Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 45
Integration with Oracle Payables (Cash)

Integration with Oracle Payables (Cash)

When the primary accounting method in Oracle Payables is cash basis accounting, you
interface payments to Oracle Project Costing as actual costs. You cannot interface costs from
Oracle Payables to Oracle Project Costing as actual costs until you pay the invoice. You can
interface partially paid invoices to Oracle Project Costing.
Entering Invoices
As with accrual basis accounting, you can match invoices to purchasing documents, manually
enter a supplier invoice, and import supplier invoices from an external source.
Tracking Commitments
You can track project-related invoices as commitments in Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 46
Invoices in Oracle Payables

Invoices in Oracle Payables

Invoices in Oracle Payables have three levels: the invoice header, invoice lines, and invoice
distributions. You can create project-oriented folders at all three levels to make it easier and
faster to enter project-related information for your invoices.
For information about entering invoices, invoice lines, and invoice distributions, see the Oracle
Payables User's Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 47
Practice - Create a Project-Related Supplier Invoice
Overview
In this practice, you will create an Oracle Payables supplier invoice and match it to the purchase
order that you created in the previous practice. After you review the invoice distributions, you
will validate the invoice and create final subledger accounting for it.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

• IMPORTANT: The instructor must verify that the current AP period is open:

• Responsibility = Payables, Vision Services (USA)

• (N) Setup > Calendar > Accounting > Accounting Periods

• If necessary, open the period for the current month.

Match the Supplier Invoice to a Purchase Order

You received the invoice for the coffee makers that you ordered. In Oracle Payables, create an
invoice. Use the responsibility Payables, Vision Services (USA). Enter or verify the invoice
header information as specified in the following table:

Field Value
Operating Unit Vision Services
Type Standard
Trading Partner Consolidated Supplies (view only)
Supplier Num 1014 (view only)
Supplier Site HOUSTON
Invoice Date Today's Date
Invoice Number XX-INV
Invoice Curr USD
Invoice Amount 359.90
Match Action Purchase Order
GL Date Today's Date
Terms 4/10, 3/20, 2/30 Net 60

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 48
 Payment Method Check
Pay Group Standard
Payment Curr USD
Payment Rate Date Today's Date
Terms Date Today's Date
Taxation Country United States

Match the invoice to the purchase order that you created in the previous practice. After you find
your purchase order and complete the match, review the invoice line and the invoice distribution
line.

Validate the Invoice and Create Accounting

You must validate the invoice and create final subledger accounting before you can interface the
supplier costs to Oracle Project Costing as actual costs. First, validate the invoice. After the
invoice is validated, create final subledger accounting for it. Select the Final Post option when
you create accounting. Verify that the invoice status is Validated and that Accounted is Yes.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 49
Solution - Create a Project-Related Supplier Invoice
Match the Supplier Invoice to a Purchase Order

1. Responsibility = Payables, Vision Services (USA)

2. Navigate to the Invoices window.

• (N) Invoices > Entry > Invoices

3. Enter or verify the invoice header information as specified on the following table:

Field Value
Operating Unit Vision Services
Type Standard
Trading Partner Consolidated Supplies (view only)
Supplier Num 1014 (view only)
Supplier Site HOUSTON
Invoice Date Today's Date
Invoice Number XX-INV
Invoice Curr USD
Invoice Amount 359.90
Match Action Purchase Order
GL Date Today's Date
Terms 4/10, 3/20, 2/30 Net 60
Payment Method Check
Pay Group Standard
Payment Curr USD
Payment Rate Date Today's Date
Terms Date Today's Date
Taxation Country United States

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 50
4. (B) Match

5. Find the purchase order to match.

• Enter the find criteria:

− Num = Your purchase order number from the previous practice.

• (B) Find

6. Select the Match check box next to the line for your purchase order.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 51
7. (B) Match on the Match to Purchase Orders window.

8. Review the invoice distributions

• (T) Lines

• Select the invoice line.

• (B) Distributions

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 52
 • Scroll to the right to view the project information.

• Close the Distributions window.

Validate the Invoice and Create Accounting

9. Validate the invoice.

• (T) General

• (B) Actions... 1

• Enable the Validate option.

• (B) OK

10. Create accounting for the invoice.

• (B) Actions... 1

• Enable the Create Accounting option.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 53
 • Select the Final Post option.

• (B) OK

• (B) OK for the note.

11. Verify that the invoice status is Validated and that Accounted is Yes.

12. Close the Invoices window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 54
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 55
Interfacing Supplier Costs

Interfacing Supplier Costs

You run the program PRC: Interface Supplier Costs to bring project-related supplier costs into
Oracle Project Costing from Oracle Purchasing and Oracle Payables. The interface process
groups the items into expenditure batches by transaction source.
• For accrual basis accounting, this program interfaces receipt accruals from Oracle
Purchasing and supplier invoice-related costs, receipt accrual price variances, and
discounts from Oracle Payables to Oracle Project Costing as actual costs. You must
validate invoices and create accounting for them before you can interface the costs to
Oracle Project Costing.
• For cash basis accounting, this program interfaces payments and discounts from Oracle
Payables to Oracle Project Costing as actual costs.
If you make adjustments to project-related supplier costs in Oracle Purchasing or Oracle
Payables, then this program interfaces the adjusting distribution lines to Oracle Project
Costing.
The program selects transactions based on the parameter values that you enter. It first retrieves
all eligible accounted, project-related supplier costs. The program then interfaces the amounts

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 56
 to Oracle Project Costing. The program groups the items into expenditure batches by
transaction source.
Each time you run the program PRC: Interface Supplier Costs, Oracle Project Costing
generates reports you can use to track the interfaced costs, as well as those invoice lines and
receipt accruals that the process rejected during interface.
Import and Expenditure Item Dates
For receipt accruals, payments, and discounts, the program uses the profile option PA: Default
Expenditure Item Date for Supplier Cost to determine the expenditure item date. The program
validates expenditure item dates for supplier costs. If the expenditure item date for an
expenditure item fails validation, then the program rejects the transaction and leaves it in the
Oracle Project Costing interface table. You must either change the date setup in Oracle Project
Costing or change the date for the expenditure item. You can use the Review Transactions
window to change the date for a rejected expenditure item and validate the new date. If the new
date passes validation, then Oracle Project Costing marks it as pending so that PRC: Interface
Supplier Costs interfaces the transaction the next time you run the program.
Note: To update the expenditure item date in the Review Transactions window, the Allow
Interface Modifications option must be enabled for the transaction source.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 57
Predefined Transaction Sources

Predefined Transaction Sources

Oracle Project Costing predefines transaction sources to import supplier costs from Oracle
Purchasing and Oracle Payables and expense reports from Oracle Payables.
• You can define preprocessing and postprocessing extensions to customize the predefined
supplier cost transaction sources. See: Oracle Projects APIs, Client Extensions, and Open
Interfaces Reference.
• The program PRC: Interface Supplier Costs only rejects the expenditure items that fail
validation. The program interfaces the remaining expenditure items to Oracle Projects.
This functionality only applies to predefined transaction sources for supplier costs.
Important: Do not use these transaction sources to import transactions from non-Oracle
sources. These transaction sources are intended only for use by the Oracle Project Costing
processes that import supplier costs and expense report costs from Oracle Purchasing and
Oracle Payables.
Note: You run the program PRC: Interface Expense Reports from Payables to interface
expense report costs to Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 58
Predefined Transaction Sources (continued)

Predefined Transaction Sources (continued)

You must enable the Allow Interface Modifications option for predefined supplier cost
transaction sources to use the Review Transactions window to modify the expenditure item
date for expenditure items that fail date validation during import.
If you enable the Allow Adjustments option for a predefined transaction source for supplier
costs, then you must complete at least one of the following setup steps to create accounting for
supplier cost adjustments:
• Specify the default supplier cost credit account for supplier cost adjustments in Oracle
Projects implementation options for each operating unit.
• Set up Oracle Subledger Accounting to determine the supplier cost credit account.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 59
Practice - Interface Supplier Costs
Overview
In this practice, you will interface supplier costs from the supplier invoice that you validated in
the previous practice to Oracle Project Costing. You will also use Expenditure Inquiry to review
the supplier cost expenditure item.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Interface Supplier Costs

In the previous practice, you validated and created final subledger accounting for your supplier
invoice. You can now interface the supplier costs to Oracle Project Costing as actual costs. Use
the responsibility Projects, Vision Services (USA). Run the program PRC: Interface Supplier
Costs. Ensure that you select your project as a program parameter. The program PRC: Interface
Supplier Costs automatically submits the program AUD: Supplier Costs Interface Audit. Review
the output report for AUD: Supplier Costs Interface Audit.

Note your Request ID __________________________

View the Expenditure Item

Use expenditure inquiry to query the expenditure item from the supplier invoice. Drill down to
view the invoice overview information and invoice workbench for the supplier cost expenditure
item.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 60
Solution - Interface Supplier Costs
Interface Supplier Costs

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Interface Supplier Costs from the list of values in the Name field
and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS
Batch Name Leave Blank
Through GL Date Leave Blank
Through Transaction Date Leave Blank
Interface Supplier Invoices Yes
Interface Receipt Accruals No
Interface AP Discounts No

7. (B) OK

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 61
8. (B) Submit

• Note your Request ID __________________________

9. (B) No in the Decision dialog box

10. Find your request.

• Select the All My Requests option button.

• (B) Find

11. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing.

Note: Wait for the program with your Request ID to complete. The program PRC:
Interface Supplier Costs automatically submits the program AUD: Supplier Costs
Interface Audit. Look for the AUD: Supplier Costs Interface Audit program request with
your Request ID in the parameters.

12. Review the output report for AUD: Supplier Costs Interface Audit.

• (B) View Output

13. Close the output page and the Requests window.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 62
View the Expenditure Item

14. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

15. Query the expenditure items from the invoice XX-INV on your project.

• Enter the header find criteria::

− Project Number = XXCS
− Project Name = XX Capital Services

• (T) Supplier

• Enter supplier find criteria:

− Invoice Number = XX-INV

• (B) Find

16. Drill down to the invoice item details information.

• (B) Item Details

• Select AP Invoice.

• (B) OK

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 63
 • (B) Invoice Workbench

17. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 64
Supplier Cost Audit Report

Supplier Cost Audit Report

Run the program AUD: Supplier Cost Audit in Oracle Project Costing to generate the Supplier
Cost Audit Report. You can use this report to track supplier cost transactions in Oracle Project
Costing. This report lists all supplier cost transactions in Oracle Project Costing for a selected
operating unit.
• For accrual basis accounting, the report includes raw costs associated with unmatched
invoices, PO-matched or receipt-matched invoices, accrued receipts, and payments
associated with discounts.
• For cash basis accounting, the report includes payments and prepayment applications
associated with invoices.
When you submit the report, you can enter values for parameters such as From Project
Number, To Project Number, Supplier, Transaction Type, From GL Period, To GL Period, and
Adjustment Type to restrict the supplier cost transactions that the program includes on the
report. For a complete list of the parameters, see: Supplier Cost Audit Report, Oracle Projects
Fundamentals.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 65
Expenditure Inquiry

Expenditure Inquiry
You can use the Find Project Expenditure Items window or the Find Expenditure Items
window in Oracle Project Costing to query supplier cost expenditure items. You can select a
combination of find criteria to limit the search. For example, you can enter find criteria specific
to supplier costs on the Supplier tab to query the expenditure items for a specific supplier
invoice, payment, or receipt. After you query the expenditure items, you use the Expenditure
Items window or Project Expenditure Items window to review them. You can use folder tools
to add additional columns that provide supplier cost-specific information.
You can review the item details for supplier cost expenditure items. For supplier costs from
supplier invoices, you can choose AP Invoice to drill down to the invoice overview in Oracle
Payables. If the invoice is matched to a purchase order, then you can drill down to the purchase
order from the Invoice Workbench. For expenditure items from receipt accrual transactions,
you can choose PO Receipt to drill down to the receipt transaction summary in Oracle
Purchasing. You can also drill down to the related purchase order from the Receipt Transaction
Summary window. For expenditure items from purchase order-related contingent worker labor
costs, you can choose Purchase Order Details to drill down to the purchase order details in
Oracle Purchasing.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 66
Viewing Project Adjustments from the Invoice Workbench

Viewing Project Adjustments from the Invoice Workbench

You can access Expenditure Inquiry from the Invoice Workbench in Oracle Payables to view
adjustments to supplier costs in Oracle Project Costing. The adjustments are to supplier costs
that you previously interfaced to Oracle Project Costing and then adjusted in Oracle Project
Costing. You can use this option to help reconcile costs between Oracle Payables and Oracle
Project Costing because you do not interface adjustments that users make in Oracle Project
Costing back to Oracle Payables.
On the Invoice Workbench in Oracle Payables, select the View Project Adjustments option
from the Tools menu to open the Find Expenditure Items window. This option is context-
sensitive; Oracle Payables automatically enters find criteria based on the position of your
cursor. When your cursor is on the invoice header or an invoice line, you can optionally revise
the find criteria before you search for the expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 67
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 68
Managing Subcontractor Payments

Managing Subcontractor Payments

If Oracle Services Procurement has been licensed and implemented, then you can take
advantage of additional features for procuring complex services. Complex services can include
consulting, advertising, construction, research and development, and professional services, and
they typically require negotiated contracts with complex terms and payment arrangements.
Oracle's Complex Work feature streamlines all aspects of the acquisition process for complex
services including:
• Negotiation of service contracts with emphasis on terms related to contract financing and
progress payment arrangements.
• Tracking of work progress against an agreed schedule in the contract.
• Processing of payment requests.
The role that Oracle Purchasing plays is primarily in the authoring and monitoring portion of
the Complex Work flow. In addition, the purchase order styles that dictate which of the
complex payment attributes are available are created in Oracle Purchasing. Complex payment
attributes include:
• Progress Payments - For partial payments during performance of the contract. For
example, progress payment pay items include:

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 69
 - Milestone - Payments based on progress events.
- Rate - Payment amount is pro-rated based on the percentage of work completed.
- Lump Sum - Payment amount is a fixed amount based on the percentage of work
completed.
• Advances - For advance payments (prepayments).
• Retainage - To withhold a portion of the payment until all work under a contract is
accepted is to be allowed.
Oracle's Complex Work feature provides a streamlined process for contractors to report
progress and request payments using either a Work Confirmation Request or an Invoice, each
of which can then be electronically routed for approval. You can optionally track the progress
of project-related work against project deliverables that you define in Oracle Project
Management.
When the work is complete, multiple methods exist for submitting a Work Confirmation
Request:
• The contractor can create and submit a Work Confirmation Request in Oracle iSupplier
Portal.
• The project manager can create a Work Confirmation request on behalf of the contractor
in iProcurement.
• The buyer can create and submit a Work Confirmation on behalf of the contractor.
The buyer or contract administrator can then confirm the progress.
For additional information about procuring complex services, see the Oracle Purchasing
User's Guide and the course titled "R12 Oracle Purchasing Fundamentals."

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 70
Managing Financing and Advances

Managing Financing and Advances

You assign financing terms that allow prepayments to a purchase order header in the Buyer
WorkCenter in Oracle Purchasing. Oracle Payables imports prepayment invoices that Oracle
Purchasing generates based on information from the purchase order financing terms. You
cannot interface project-related prepayment invoices to Oracle Project Costing as actual costs.
Prepayment invoices appear as commitments in Oracle Project Costing as follows:
• A project-related prepayment invoice that is not matched to a purchase order appears as
separate commitment. Once you apply the prepayment invoice to a standard invoice,
Oracle Project Costing relieves the cost commitment for the prepayment invoice.
• A project-related prepayment invoice that is matched to a purchase order appears as a
purchase order commitment, not as an invoice commitment.
With accrual basis accounting, you interface the actual cost from the standard invoice, and not
the prepayment, to Oracle Project Costing. With cash basis accounting, after you apply the
prepayment invoice to a standard invoice, you interface the actual cost from the standard
invoice to Oracle Project Costing. The actual cost amount that you interface to Oracle Project
Costing is equal to the amount of the prepayment applied to the standard invoice.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 71
Managing Retainage

Managing Retainage
Retainage is an agreed upon amount, typically a percentage, that you withhold from a
subcontractor until the subcontractor makes predetermined progress for a particular scope of
work. Retainage is also known as retention or contractual withholds. With Oracle's Complex
Work feature, contract administrator can negotiate retainage terms with the contractor and
capture these as part of the contract. For example, the contract can specify that you will retain
20 percent from all payments until 25 percent of work is complete. Therefore, whenever the
subcontractor sends you an invoice, you retain 20 percent of each payment until the overall
progress reaches 25 percent.
Oracle Payables automatically calculates the retainage amount for a supplier invoice based on
the retainage rate and maximum retainage amount that you specify on the purchase order
header in the Buyer WorkCenter in Oracle Purchasing. It stores the retainage amount as a
separate distribution line with a distribution line type of Retainage. Oracle Payables has one
retainage account it uses for each operating unit.
Oracle Project Costing does not report on or interface project-related retainage distribution
lines as commitments or actual costs. Instead, Oracle Project Costing captures the full amount
of the expense as a commitment and, when applicable, for budgetary control. Later, the full

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 72
 amount of the expense is interfaced to Oracle Project Costing as an actual cost. Retainage is
related to the payment of the invoice and it ultimately does not impact the overall project cost.
Retainage Release
The contractor can submit a Retainage Release Invoice for release of retainage withheld. If the
contractual clauses or other conditions governing the release of the retainage are met, then the
buyer can release the applicable retainage. For additional information, see the Oracle
Purchasing User's Guide and the Oracle Payables User's Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 73
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 74
Supplier Cost Adjustments Overview

Supplier Cost Adjustments Overview

You can make adjustments to supplier costs in Oracle Project Costing, Oracle Purchasing, and
Oracle Payables.
In Oracle Project Costing, you can make the following adjustments to supplier cost and
expense report cost expenditure items:
• Transfer an expenditure item to another project or task
• Split an expenditure item
• Reclassify the billable or capitalizable status
• Place a billing hold or one-time hold
• Release a billing hold
• Recalculate burden costs
• Recalculate raw costs
• Recalculate revenue
• Change comment
• Change project functional currency attributes

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 75
 • Reprocess cross charge transactions
• Mark for no cross charge processing
• Change transfer price currency attributes
In Oracle Purchasing and Oracle Payables, you can adjust the project-related information such
as the invoice amount, supplier, project, task, expenditure type, expenditure organization and
expenditure item date.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 76
Restrictions to Supplier Cost Adjustments in Oracle Project
Costing

Restrictions to Supplier Cost Adjustments in Oracle Project Costing

Oracle Project Costing restricts the types of adjustments that you can make to supplier cost
expenditure items in Oracle Project Costing. The restrictions apply to supplier costs interfaced
to Oracle Project Costing from Oracle Purchasing and Oracle Payables, and to expense report
costs interfaced from Oracle Payables.
Allow Adjustments Option for Supplier Cost Transaction Sources
If your implementation team does not enable the Allow Adjustments check box for predefined
supplier cost transaction sources in the Transaction Sources window, then Oracle Project
Costing restricts the types of adjustments that you can perform in Oracle Project Costing. The
default value for this option is No.
Automatic Offsets in Oracle Payables
If you enter invoices in Oracle Payables for more than one balancing segment, then you can
use the Automatic Offsets feature to keep your Oracle Payables transaction accounting entries
balanced. When you use Automatic Offsets, Oracle Payables automatically creates balancing
accounting entries for your transactions. When Automatic Offsets is enabled in Oracle

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 77
 Payables, you can make adjustments to supplier cost expenditure items in Oracle Project
Costing under the following conditions:
• When the Automatic Offset Method is Balancing, you can make an adjustment in Oracle
Project Costing if the adjustment does not cause a change in the balancing segment value.
• When the Automatic Offset Method is Account, you can make an adjustment in Oracle
Project Costing if the adjustment only affects the value of the natural account segment. If
the adjustment affects the value of any other accounting segment, then you cannot make
the adjustment.
Combined Basis Accounting
With combined basis accounting, if you make supplier cost adjustments in Oracle Project
Costing, then Oracle Project Costing does not create accounting entries for a secondary ledger
if the accounting basis differs from the primary ledger. If you enter adjustments in Oracle
Payables, then the adjustment activity updates both the primary ledger and the secondary
ledger. You must make supplier cost adjustments in Oracle Payables if you want all adjustment
activity to update both ledgers. Your implementation team can disable the Allow Adjustments
check box for the predefined supplier cost transaction sources in the Transaction Sources
window in Oracle Project Costing to prevent users from adjusting supplier cost expenditure
items in Oracle Project Costing.
Adjustments that Affect Tax Recoverability
When you attempt to adjust a supplier cost expenditure item in Oracle Project Costing, if the
adjustment has a potential impact on the tax recoverability, then Oracle Project Costing does
not allow the adjustment. This restriction ensures the integrity of tax information stored in
Oracle E-Business Tax. You must make the adjustment in the source application (Oracle
Purchasing or Oracle Payables).
Adjustments to Historical (Prior to Release 12) Prepayment Invoices
You cannot adjust expenditure items for historical (prior to Release 12) prepayment invoices in
Oracle Project Costing. You must make these adjustments in Oracle Payables.
Adjustments to Canceled Supplier Invoices
If you cancel a supplier invoice, then you cannot make further adjustments to expenditure
items associated with the invoice in either Oracle Payables or Oracle Project Costing.
Adjustments to Receipt Accruals and Exchange Rate Variance
If you allow users to make adjustments in Oracle Project Costing to expenditure items that
represent receipts, receipt nonrecoverable tax, or exchange rate variances, then Oracle Project
Costing does not perform accounting for adjustments in the following ledgers:
• Reporting currency ledgers
• Secondary ledgers if the secondary ledger currency differs from the primary ledger
currency
During implementation, you set the profile option PA: Allow Adjustments to Receipt Accruals
and Exchange Rate Variance to specify whether you can adjust receipt, receipt nonrecoverable
tax, and exchange rate variance expenditure items in Oracle Project Costing when exchange
rate variance exists and you convert journals to another currency.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 78
Guided Demonstration - Allow Adjustments for a Supplier Cost
Transaction Source
Allow Adjustments for a Supplier Cost Transaction Source

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Transaction Sources window.

• (N) Setup > Expenditures > Transaction Sources

3. Find the Oracle Payables Supplier Invoices transaction source.

4. Enable the Allow Adjustments transaction source option.

5. (B) OK for the Note

6. (I) Save

7. Close the Transaction Sources window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 79
Adjusting Project-Related Documents in Oracle Purchasing

Adjusting Project-Related Documents in Oracle Purchasing

Requisition Adjustments
You can update project information on a requisition only if it is not approved and before it is
included on a purchase order. The Account Generator builds a new default account number
value when you change the project information. The new project information is used in
commitment reporting.
If encumbrance accounting is enabled for the project, and the requisition is reserved, then you
cannot change any of the project attributes. If you unreserve the requisition, then Oracle
Purchasing reverses all encumbrance accounting entries and you can modify the project
attributes.
Purchase Order Adjustments
You can update project information on a purchase order, even after it is approved and invoiced.
However, you cannot update project information if there has been any accounting activity on
the purchase order (for example, if it is encumbered, or if it is accrued on receipt and the
distribution has been received or billed). If the purchase order is invoiced before you update
the project information, the invoice is not updated with the new project information. If the

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 80
 purchase order line is invoiced on a new invoice after you change the project information, then
Oracle Payables copies the new project information to the new invoice.
To update the project information on a purchase order, you must first return all goods that you
have received for the purchase order. In addition, if you have previously interfaced receipts and
returns for the purchase order to Oracle Project Costing, then you must interface all receipts
and returns to Oracle Project Costing before you update project information. If you have not
previously interfaced receipts or returns for the purchase order to Oracle Project Costing, then
you do not have to interface receipts and returns before you update project information. The
Account Generator builds a new default account number when you change the project
information. The new project information is used in commitment reporting.
If encumbrance accounting is enabled for the project, and the purchase order is reserved, then
you cannot change any of the project attributes. If you unreserve the purchase order, then
Oracle Purchasing reverses all encumbrance accounting entries and you can modify the project
attributes.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 81
Writing Off Receipt Accruals in Oracle Purchasing

Writing Off Receipt Accruals in Oracle Purchasing

After you enter receipt transactions and match and approve your invoices, you can run the AP
and PO Accrual Reconciliation Report in Oracle Purchasing to identify any differences
between your Oracle Purchasing receipts and Oracle Payables invoices. After you identify the
entries you want to write off, you create a manual journal entry to write off the transactions.
When you write off a receipt accrual in Oracle Purchasing, you must manually adjust the cost
in Oracle Project Costing. Because the receipt accrual write-off is recorded as a manual journal
entry, Oracle Purchasing does not interface write-off adjustments to Oracle Project Costing.
For additional information on receipt accruals and receipt accrual write-offs, see the discussion
about receiving in the Oracle Purchasing User's Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 82
Adjusting Project-Related Documents in Oracle Payables

Adjusting Project-Related Documents in Oracle Payables

Matched Invoices
If you match an invoice to a purchase order, then you cannot directly change any of the project
information copied from the purchase order, with the exception of the expenditure item date.
Oracle Project Costing uses the profile option PA: Default Expenditure Item Date for Supplier
Cost during the invoice match process in Oracle Payables to determine the default expenditure
item date for supplier invoice distribution lines. You can override the default expenditure item
date for invoices on the Invoice Workbench in Oracle Payables.
If you accidentally matched to the wrong purchase order document (purchase order, shipment,
distribution, or receipt), you can reverse matched distributions and create new distributions by
matching to new purchase order shipments or distributions of the same purchase order or of
another purchase order. If you add or reverse invoice distributions, then you must also change
the scheduled payment amounts to match the new invoice total, or Oracle Payables places
holds on the invoice during validation.
Note: If you use the Retroactive Pricing of Purchase Orders feature in Oracle Purchasing, and
change project information on an invoice, you must update the same project information on
any subsequent purchase order price adjustment or adjustment documents.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 83
 Manually Entered, Unvalidated Invoices
You can change the project information before an invoice is validated. The Account Generator
derives a new default account number based on the new project information that you enter.
Manually Entered, Validated Invoices
You cannot directly change any project information on a validated invoice. You must reverse
the distribution line and create a new distribution line with the new project information using
the Distributions window in Oracle Payables.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 84
Adjusting Supplier Costs for Non-Capital Assets

Adjusting Supplier Costs for Non-Capital Assets

You can enter invoices for asset items in Oracle Payables and run the Mass Additions Create
concurrent program in Oracle Payables to transfer the specified asset item distributions to the
interface table in Oracle Assets. You then create assets from the distributions in Oracle Assets.
If the invoice distributions are associated with a project, then you also interface the invoice
distributions from Oracle Payables to Oracle Project Costing as supplier costs.
When you adjust supplier cost expenditure items in Oracle Project Costing that affect non-
capital assets, Oracle Project Costing provides the adjustment information to the Mass
Additions Create concurrent program in Oracle Payables. This program transfers the
adjustment information to Oracle Assets. Adjustment costs in Oracle Project Costing are
eligible for interface to Oracle Assets when the following conditions are met:
• The final account type in Oracle Subledger Accounting for the charge account for the cost
adjustment is Asset.
• You successfully generate accounting events for the adjustment and create the final
accounting in Oracle Subledger Accounting.
Oracle Project Costing sends adjustments to the Mass Additions Create concurrent program in
transaction, ledger, and reporting currencies.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 85
Manually Adjusting Unmatched Reversing Expenditure Items

Manually Adjusting Unmatched Reversing Expenditure Items

Typically, when Oracle Purchasing or Oracle Payables sends a reversing expenditure item to
Oracle Project Costing, Oracle Project Costing accepts the reversal, associates it with the
original expenditure item, and marks both expenditure items so that they are not eligible for
further adjustments in Oracle Project Costing. Two scenarios exist in which Oracle Project
Costing cannot automatically create the appropriate adjustment transactions, when you:
• Cancel a historical (prior to Release 12) supplier invoice.
• Perform a partial return or partial correction of a receipt.
The program PRC: Interface Supplier Costs interfaces the unmatched reversing expenditure
items from Oracle Payables or Oracle Purchasing to Oracle Project Costing. These items do not
contain a reference to other expenditure items. You must manually adjust these unmatched
reversing expenditure items in Oracle Project Costing. You must also separately adjust any
related expenditure items, such as invoice price variance, exchange rate variance, and tax.
You can run the Supplier Cost Audit Report to research the unmatched reversing expenditure
items. You can also enable the Unmatched Reversing Items that Require Adjustment check box
on the Supplier tab of the Find Expenditure Items or Find Project Expenditure Items window to
query unmatched reversing expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 86
Processing Adjustments

Processing Adjustments
To Process Adjustments to Supplier Costs or Expense Reports in Oracle Project Costing:
1. Perform the adjustment in Oracle Project Costing.
2. Process the adjustment by running either PRC: Distribute Supplier Cost Adjustments,
PRC: Distribute Supplier Cost Adjustments for a Range of Projects, or PRC: Distribute
Expense Report Adjustments.
3. Run PRC: Generate Cost Accounting Events. Optionally, you can select Supplier Cost for
the Process Category parameter to process only supplier cost and expense report
adjustments.
4. Run PRC: Create Accounting to create the accounting for the accounting events in Oracle
Subledger Accounting. Run the program in final mode to complete the processing.
Optionally, you can select Supplier Cost for the Process Category parameter to process
only supplier cost and expense report adjustments. When you run the program in final
mode, you can also choose to transfer the final subledger accounting to Oracle General
Ledger and to post the journal entries.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 87
Processing Adjustments

Processing Adjustments
To Process Adjustments to Supplier Costs or Expense Reports in Oracle Payables:
1. Perform the adjustment in Oracle Payables.
2. Validate the new invoice distribution lines.
3. Run Create Accounting in Oracle Payables to create the accounting for the invoice in
Oracle Payables. Run the program in final mode to complete the processing. When you
run the program in final mode, you can also choose to transfer the final subledger
accounting to Oracle General Ledger and to post the journal entries.
4. Interface the adjustment to Oracle Project Costing:
- Run PRC: Interface Supplier Costs in Oracle Project Costing to interface the
adjustment to Oracle Project Costing.
- Run PRC: Interface Expense Reports from Payables in Oracle Project Costing to
interface the adjustment to Oracle Project Costing.
For information about other methods you can use to validate supplier invoices and create
accounting in Oracle Payables, see the Oracle Payables User's Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 88
Prioritizing Supplier Costs Adjustments

Prioritizing Supplier Costs Adjustments

You can make adjustments to supplier costs in Oracle Project Costing or in the source system
(Oracle Payables and Oracle Purchasing). Adjustments that you make in the source system take
precedence over adjustments that you make in Oracle Project Costing. The following pages
present an example of the accounting.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 89
Prioritizing Supplier Costs Adjustments

Prioritizing Supplier Costs Adjustments

First, you create a supplier invoice in Oracle Payables. You charge $10 USD to Project A, Task
1. In Oracle Payables, you validate the invoice and the create accounting in final mode in
Oracle Subledger Accounting. In Oracle Project Costing, you run the program PRC: Interface
Supplier Costs to interface the invoice to Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 90
Prioritizing Supplier Costs Adjustments

Prioritizing Supplier Costs Adjustments

You transfer the expenditure item in Oracle Project Costing from Project A, Task 1 to Project
B, Task 1. When you make the adjustment, Oracle Project Costing, creates a reversing
expenditure item for $10 USD for Project A, Task 1 and a new $10 USD expenditure item for
Project B, Task 1. You generate cost accounting events for the transfer and create accounting
in final mode in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 91
Prioritizing Supplier Costs Adjustments

Prioritizing Supplier Costs Adjustments

Oracle Payables has no knowledge of the adjustments that you made and accounted for in
Oracle Project Costing. Next, you make an adjustment to the original invoice distribution in
Oracle Payables to move the cost to Project C, Task 1. You reverse the original distribution
line for $10 USD for Project A, Task 1 and create a new distribution line for $10 USD for
Project C, Task 1. In Oracle Payables, you revalidate the invoice and the create accounting for
the adjustments in final mode in Oracle Subledger Accounting. The following table shows you
the resulting distribution lines in Oracle Payables.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 92
Prioritizing Supplier Costs Adjustments

Prioritizing Supplier Costs Adjustments

You run the program PRC: Interface Supplier Costs to interface the adjustments to Oracle
Project Costing. The program interfaces the reversing expenditure item for $10 for Project A,
Task 1 and the new expenditure item for $10 USD for Project C, Task 1 to Oracle Project
Costing.
When the interface program receives reversals and adjustments from a source system after you
have made adjustments in Oracle Project Costing, the program automatically reverses both the
last entry recorded in Oracle Project Costing and the reversing entry recorded by the source
system. In this example, the program reverses both the new expenditure item from the
adjustment you made in Oracle Project Costing to transfer $10 USD to Project B, Task 1, and
the expenditure item from reversing invoice distribution in Oracle Payables. This second
reversal is necessary because Oracle Project Costing previously reversed the original
expenditure item for Project A, Task 1 when you performed the transfer in Oracle Project
Costing. You generate cost accounting events for the two reversing expenditure items that the
interface program created and create accounting in final mode in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 93
Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments

After you adjust supplier cost or expense report cost expenditure items in Oracle Project
Costing, you must process the adjustment to create accounting entries in Oracle Subledger
Accounting. The program PRC: Generate Cost Accounting Events sorts transactions to process
reversals before the new transactions. For additional information about Oracle Subledger
Accounting, see the lesson titled "Accounting for Costs" and the Oracle Subledger Accounting
Implementation Guide.
If multiple adjustments exist for the same transaction within the same processing batch, then
Oracle Project Costing processes them in the order they were made. Oracle Project Costing
generates accounting events for only the most recent adjustment if the GL date is the same for
all adjustments. If the GL date is not the same for all adjustments, then Oracle Project Costing
generates accounting events for all adjustments. If the program rejects one of the adjustments
in the sequence, it also rejects all subsequent adjustments. Once you correct the original failure,
Oracle Project Costing attempts to generate accounting events for the failed adjustment and all
subsequent adjustments.
The following pages present an example of the accounting. For additional information, see the
Oracle Project Costing User Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 94
Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments

First, you create a supplier invoice in Oracle Payables. The Account Generator in Oracle
Payables generates the default accounting for the supplier invoice. The default credit account
comes from the account that is assigned to the invoice supplier site. After you validate the
invoice and the create accounting in final mode, you interface the supplier costs to Oracle
Project Costing. The interface program interfaces the default debit account, but not the default
credit account. The following table shows the default accounting for the transaction.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 95
Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments

In this example, you have set up your own user-defined rules for Oracle Payables in Oracle
Subledger Accounting. As a result, Oracle Subledger Accounting overwrites the default
accounts from Oracle Payables when you create the subledger accounting in final mode.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 96
Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments

You adjust the supplier cost expenditure item in Oracle Project Costing and run the program
PRC: Distribute Supplier Cost Adjustments. This program uses AutoAccounting in Oracle
Project Costing to determine the default expense account for the new expenditure item.
Next, you run the program PRC: Generate Cost Accounting Events to generate accounting
events for the adjustments. This program uses the default supplier cost credit account from
Oracle Projects implementation options for the operating unit to determine the default liability
account for the reversal and the new expenditure item.
Note: If your implementation team does not specify a default supplier cost credit account in
Oracle Projects implementation options, then your implementation team must define a rule in
Oracle Subledger Accounting to determine the account.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 97
Accounting for Supplier Cost Adjustments

Accounting for Supplier Cost Adjustments

Next, you run the program PRC: Create Accounting in final mode to create the subledger
accounting for the accounting events. The program copies the expense account for the reversal
from the original accounting entry in Oracle Subledger Accounting. No override is allowed for
this account.
In this example, you have set up your own user-defined rules in Oracle Subledger Accounting.
As a result, Oracle Subledger Accounting overwrites the default accounts from Oracle Project
Costing when it creates the final accounting for the reversal liability account, and the new
transaction expense and liability accounts. For information about setting up rules in Oracle
Subledger Accounting, see the Oracle Subledger Accounting Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 98
Practice - Adjust Supplier Costs
Overview
In this practice, you will

• Transfer the supplier cost expenditure item from the previous practice to a different
task.

• Distribute the supplier cost adjustment in Oracle Project Costing.

• Cancel the invoice in Oracle Payables.

• Create final subledger accounting for the cancelled invoice.

• Interface supplier costs from the canceled invoice to Oracle Project Costing.

• Analyze the expenditure items that result from the multiple adjustments.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

• The instructor must complete the activities in previous guided demonstration to allow
adjustments for the Oracle Payables Supplier Invoices transaction source.

Tasks
Transfer an Expenditure Item in Oracle Projects

The project manager of the XX Capital Services project notifies you that you need to charge the
coffee makers to task 3.0 and not task 1.2. In Oracle Project Costing, transfer the expenditure
item to task 3.0 and then run the program PRC: Distribute Supplier Cost Adjustments to
distribute the adjustment. Ensure that you select your project as a program parameter. Review the
output report.

Note your Request ID __________________________

Cancel the Invoice in Oracle Payables

You discover that you have not yet received the coffee makers. After contacting the supplier, you
learn that the coffee makers are discontinued and will not be shipped. In Oracle Payables, find
and cancel the unpaid supplier invoice that you previously entered and validated. Use the
responsibility Payables, Vision Services (USA). After you cancel the invoice, create final

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 99
subledger accounting for the invoice. Select the Final Post option when you create accounting.
Verify that the invoice status is Cancelled and that Accounted is Yes.

Interface Supplier Costs

Interface the canceled invoice costs to Oracle Project Costing. Use the responsibility Projects,
Vision Services (USA). Run the program PRC: Interface Supplier Costs. Ensure that you select
your project as a program parameter. Review the output report for the program AUD: Supplier
Costs Interface Audit.

Note your Request ID __________________________

View the Results in Expenditure Inquiry

Query all of the expenditure items from your XX-INV supplier invoice in Expenditure Inquiry.
Limit the find criteria to query only the expenditure items related to your supplier invoice.
Provide a brief analysis of when each expenditure item was created and the purpose of each
expenditure item:

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 100
Solution - Adjust Supplier Costs
Transfer an Expenditure Item in Oracle Projects

1. Navigate to the Find Project Expenditure Items window.

• (N) Expenditures > Expenditure Inquiry > Project

2. Query the expenditure items from the invoice XX-INV on your project.

• Enter the header find criteria::

− Project Number = XXCS
− Project Name = XX Capital Services

• (T) Supplier

• Enter supplier find criteria:

− Invoice Number = XXINV

• (B) Find

3. Position your cursor on the supplier cost expenditure item.

4. Transfer the expenditure item.

• (M) Tools > Transfer 1

• Enter the transfer information as specified in the following table:

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 101
 Field Value
Project Number XXCS
Name XX Capital Services
Task Number 3.0
Name Project Management

• (B) OK

• (B) Yes in the Decision dialog box

• (B) OK in the Note dialog box

• (B) Yes in the Decision dialog box

5. Review the results. You will see two new expenditure items:
− A new expenditure item for task 3.0
− A reversing expenditure item of for task 1.2

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 102
6. Close the open windows and return to the navigator.

7. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

8. Select to run a Single Request.

9. (B) OK

10. Select the program PRC: Distribute Supplier Cost Adjustments from the list of values in the
Name field and Vision Services for the operating unit.

11. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 103
12. (B) OK

13. (B) Submit

• Note your Request ID __________________________

14. (B) No in the Decision dialog box

15. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

16. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

17. Review the output report.

• (B) View Output

18. Close the output page and the Requests window.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 104
Cancel the Invoice in Oracle Payables

19. Switch your responsibility.

• (M) File > Switch Responsibility

• Select Payables, Vision Services (USA)

• (B) OK

20. Navigate to the Find Invoices window.

• (N) Invoices > Entry > Invoices

• (I) Find

21. Find your invoice.

• Enter the header find criteria::

− Invoice Number = XX-INV

• (B) Find

22. Cancel the invoice.

• (B) Actions... 1

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 105
 • Enable the Cancel Invoices option.

• (B) OK

• (B) OK for the Caution message.

23. Create accounting for the invoice.

• (B) Actions... 1

• Enable the Create Accounting option.

• Select the Final Post option.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 106
 • (B) OK

• (B) OK for the message.

24. Verify that the invoice status is Cancelled and that Accounted is Yes.

25. Close the Invoices window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 107
Interface Supplier Costs

26. Switch your responsibility.

• (M) File > Switch Responsibility

• Select Projects, Vision Services (USA)

• (B) OK

27. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

28. Select to run a Single Request.

29. (B) OK

30. Select the program PRC: Interface Supplier Costs from the list of values in the Name field
and Vision Services for the operating unit.

31. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS
Batch Name Leave Blank
Through GL Date Leave Blank
Through Transaction Date Leave Blank
Interface Supplier Invoices Yes
Interface Receipt Accruals No
Interface AP Discounts No

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 108
32. (B) OK

33. (B) Submit

• Note your Request ID __________________________

34. (B) No in the Decision dialog box

35. Find your request.

• Select the All My Requests option button.

• (B) Find

36. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing.

Note: Wait for the program with your Request ID to complete. The program PRC:
Interface Supplier Costs automatically submits the program AUD: Supplier Costs
Interface Audit. Look for the AUD: Supplier Costs Interface Audit program request with
your Request ID in the parameters.

37. Review the output report for AUD: Supplier Costs Interface Audit.

• (B) View Output

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 109
38. Close the output page and the Requests window and return to the Navigator.

View the Results in Expenditure Inquiry

39. Navigate to the Find Project Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

40. Query the expenditure items from the invoice XX-INV on your project.

• Enter the header find criteria:

− Project Number = XXCS
− Project Name = XX Capital Services

• (T) Supplier

• Enter supplier find criteria:

− Invoice Number = XX-INV

• (B) Find

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 110
 Summary of the six expenditure items:

First, you interfaced supplier costs to Oracle Project Costing, which created the new
supplier cost expenditure item for task 1.2.

Second, you transferred the cost to task 3.0. The transfer created a new expenditure item
for task 3.0 and a reversal for the original expenditure item for task 1.2.

Third, you cancelled the invoice in Oracle Payables and interfaced supplier costs to
Oracle Project Costing. The program PRC: Interface Supplier Costs created an
expenditure item to reverse the transferred expenditure item on task 3.0. Oracle
Payables did not know about the adjustment activity in Oracle Project Costing, so the
cancellation created an expenditure item to reverse the original expenditure item for
task 1.2. Because the transfer previously reversed the original expenditure item in
Oracle Project Costing, the interface program created an expenditure item to reverse the
cancellation reversal (appears as a positive expenditure item for task 1.2). The net
outcome is that the total cost is now zero.

41. Close the open windows and return to the Navigator when finished.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 111
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 112
Oracle Purchasing and Oracle Payables Integration
Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 113
Oracle Purchasing and Oracle Payables Integration
Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 114
Implementing Oracle Purchasing and Oracle Payables Integration

Implementing Oracle Purchasing and Oracle Payables Integration

Oracle Purchasing
Install and implement Oracle Purchasing to use Oracle Purchasing to enter project-related
requisitions, releases, and purchase orders, and then report outstanding committed costs of
requisitions and purchase orders on your projects. You can also interface project-related receipt
accruals from Oracle Purchasing to Oracle Project Costing as actual supplier costs.
Oracle Payables
Install and implement Oracle Payables to perform any of the following activities:
• Enter project-related expense reports in Oracle Payables in the Invoice Workbench. To
enter project-related expense reports for an employee in the Invoice Workbench, you must
first associate a supplier with the employee. Note that the entry of contingent worker
expense reports in the Invoice Workbench is not supported.
• Enter project-related expense reports in Oracle Internet Expenses and import them into
Oracle Payables.
• Use supplier and invoice information in Oracle Payables to create expenditure items for
projects in Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 115
Set Profile Options for Project-Related Documents

Set Profile Options for Project-Related Documents

Set the following profile options for project-related documents:
• PA: Allow Adjustments to Receipt Accruals and Exchange Rate Variance - Specify
whether you can adjust receipt, receipt nonrecoverable tax, and exchange rate variance
expenditure items in Oracle Project Costing when exchange rate variance exists and you
convert journals to another currency.
• PA: Allow Override of PA Distributions in AP/PO - Specify whether Oracle
Purchasing and Oracle Payables pass user-entered account segment values to the Account
Generator workflow. To enable users to override generated accounts, you must set this
profile option to Yes and also set the Replace Existing Value attribute in the Account
Generator workflow to False. The default value for the Replace Existing Value is False.
• PA: AP Discounts interface start date (mm/dd/yyyy) - Specify when Oracle Project
Costing retrieves and interfaces payment discounts from Oracle Payables. The system
assigns a default start date of 01/01/2051. You can enter a different date to override the
default system value. Oracle Project Costing allows you to enter either a historical date or
future date. If you enter a historical date, then the system will retroactively retrieve
discount amounts from the specified date forward the next time you run the PRC:

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 116
 Interface Supplier Costs grogram. If you specify a future date, the program will begin
interfacing discount amounts as of that date.
• PA: Default Expenditure Item Date for Supplier Cost - Specify the source for the
expenditure item date. Oracle Project Costing uses this profile option when you run the
program PRC: Interface Supplier Costs to determine the expenditure item date for Oracle
Purchasing receipts, invoice payments, and discounts. In addition, Oracle Payables uses
this profile option during the invoice match process, and when you enter unmatched
invoices, to determine the default expenditure item date for supplier invoice distribution
lines.
• PA: Default Expenditure Organization in AP/PO - Specify the default expenditure
organization for project-related information in Oracle Payables and Oracle Purchasing.
• PA: Expense Report Invoices Per Set - Specify the number of expense report invoices
(entered in Oracle Internet Expenses or Oracle Payables) for the program PRC: Interface
Expense Reports from Payables to process in each set.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 117
Define the Supplier Invoice Account Generator

Define the Supplier Invoice Account Generator

The Account Generator uses Oracle Workflow to derive default account code combinations.
Oracle Payables use the Account Generator to determine the default account code
combinations for supplier invoices and expense reports based on the project information
entered. You define functions and processes to derive the Accounting Flexfield combinations.
You can optionally customize the Account Generator for each set of defined ledgers.
For details about each workflow, see the Oracle Projects Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 118
Defining a Project-Related Purchasing Transactions Account
Generator

Defining a Project-Related Purchasing Transactions Account Generator

Oracle Purchasing uses item types to generate account numbers for all requisitions and
purchase orders, whether they are project-related or not. Oracle Purchasing provides a set of
default account generator processes for the accounts it needs to build. To derive the accounts
based on project information, you must modify the default processes to use project
information. The Account Generator workflows in Oracle Purchasing generate the following
accounts:
• Purchase Order Charge Account
• Purchase Order Budget Account
• Purchase Order Variance Account
• Purchase Order Accrual Account
• Requisition Charge Account
• Requisition Budget Account
• Requisition Variance Account
• Requisition Accrual Account

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 119
Specify a Default Supplier Cost Credit Account

Specify a Default Supplier Cost Credit Account

Specify a default supplier cost credit account in Oracle Projects implementation options. The
program PRC: Generate Cost Accounting Events uses the specified account as the default
account for supplier cost adjustments and expense report cost adjustments that you perform in
Oracle Project Costing.
If you allow adjustments to supplier cost expenditure items in Oracle Project Costing, then you
must either specify a default supplier cost credit account in Oracle Project Costing or set up a
rule to derive the account in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 120
Guided Demonstration - Specify a Default Supplier Cost Credit
Account
Specify a Supplier Default Cost Credit Account

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Transaction Sources window.

• (N) Setup > System > Implementation Options

3. Select Vision Services in the Operating Unit field.

4. (B) Find

5. (T) Expnd/Costing

6. Enter 01-000-2220-000 as the Default Supplier Cost Credit Account.

7. (I) Save

8. Close the Implementation Options window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 121
Define Project-Related Distribution Sets

Define Project-Related Distribution Sets

In the Distribution Sets window of Oracle Payables, you can define project-related distribution
sets. When you assign a project-related distribution set to an invoice you are entering, Oracle
Payables automatically creates project-related invoice distributions for the invoice.
For more information, see: Distribution Sets, Oracle Payables Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 122
Define Oracle Payables Descriptive Flexfields and Related
Profiles

Define Oracle Payables Descriptive Flexfields and Related Profiles

• PA: Transfer DFF with AP - Specifies whether the program PRC: Interface Supplier
Costs and the program PRC: Interface Expense Reports from Payables interface
descriptive flexfield segments from Oracle Payables to Oracle Project Costing.
• PA: Transfer DFF with PO - Specifies whether the program PRC: Interface Supplier
Costs interfaces descriptive flexfield segments from Oracle Purchasing to Oracle Project
costing. This profile option only applies to receipt accruals.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 123
Summary

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Purchasing and Oracle Payables

Chapter 11 - Page 124
 Integration with Oracle
Internet Expenses
Chapter 12

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 2
Integration with Oracle Internet Expenses

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 5
Oracle Internet Expenses

Oracle Internet Expenses

With Oracle Internet Expenses, employees and contingent workers can enter and submit
expense reports using a standard Web browser or a Web-enabled mobile device. Oracle
Workflow automatically routes expense reports for approval and enforces reimbursement
policies. Oracle Internet Expenses integrates with Oracle Payables to provide quick processing
of expense reports for payment.
You can create project-related expense reports using Oracle Internet Expenses. You send
expense reports entered in Oracle Internet Expenses to Oracle Payables and then to Oracle
Project Costing.
Note: You can enter expense reports containing project and task information in Oracle Internet
Expenses or Oracle Payables. Additionally, you can import fully-accounted project-related
expense reports into Oracle Project Costing from third-party systems using Transaction Import.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 6
Expense Report Flow

Expense Report Flow

Enter and Submit Project-Related Expense Reports
You can enter and submit project-related expense reports in Oracle Internet Expenses.
Approve and Audit Expense Reports
You approve and audit expenses report in Oracle Internet Expenses to enforce policies.
Run Expense Report Export
After an expense report is approved and audited in Oracle Internet Expenses, you run the
program Expense Report Export from an expense report audit responsibility to send this
information to the Oracle Payables invoice tables. Oracle Payables identifies invoices created
from Oracle Internet Expenses expense reports with a source of Oracle Internet Expenses.
Validate and Process Invoices
For accrual basis accounting, you must validate the expense report invoice and create
subledger accounting in final mode before you can interface expense reports to Oracle Project
Costing. For cash basis accounting, you must pay the invoice before you can interface expense
reports to Oracle Project Costing. You can interface partially paid expense report invoices.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 7
Expense Report Flow

Expense Report Flow

Interface Expense Reports from Oracle Payables
In Oracle Project Costing you run the program PRC: Interface Expense Reports from Payables
to interface project-related expense report costs to Oracle Project Costing. This information
initially goes to the interface tables. The program continues and automatically calls Transaction
Import to import the transactions to the Expenditure Items table with a source of Oracle
Payables Expense Reports. You run this program for expense reports that you create in Oracle
Internet Expenses (and for expense reports that you enter directly into Oracle Payables). The
program generates a report that lists the interfaced and rejected invoice distribution lines, as
well as a summary of the total number and cost of the distribution lines.
You can use either Oracle Project Costing or Oracle Payables to adjust expense reports that
you entered in Oracle Internet Expenses or Oracle Payables. If you make adjustments in Oracle
Project Costing, then you run programs in Oracle Project Costing to distribute the expense
report adjustments, generate cost accounting events, and create accounting for the adjustments
in Oracle Subledger Accounting. If you make adjustments in Oracle Payables, then you
revalidate the invoices and create final subledger accounting in Oracle Payables, and run the
program PRC: Interface Expense Reports from Payables in Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 8
Deriving Project Data from Expense Reports

Deriving Project Data from Expense Reports

When you create expense reports in Oracle Internet Expenses, you directly enter some of the
project-related information. This information includes the project and lowest task that is
associated with each receipt line. Oracle Internet Expenses derives other project-related
information from other data associated with the expense report. The derived information
includes the expenditure type, expenditure organization, expenditure item date, and quantity.
Note: The profile option PA: Default Expenditure Item Date for Supplier Cost does not apply
to expense reports.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 9
Disconnected Expense Reporting Process

Disconnected Expense Reporting Process

Employees who are traveling or do not have access to the company’s intranet can create
expense reports using the disconnected expense reporting process. The disconnected expense
reporting process involves entering expenses in a Microsoft Excel spreadsheet on a personal
computer or laptop and then importing this spreadsheet into Oracle Internet Expenses. Oracle
Internet Expenses provides a Microsoft Excel expense spreadsheet template to create a
disconnected expense report. You can configure this spreadsheet template to meet the needs of
your enterprise.
For additional information regarding the template, see the Oracle Internet Expenses
Implementation and Administration Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 10
Adjusting Expense Reports

Adjusting Expense Reports

You can adjust expense reports that you enter in Oracle Internet Expenses in both Oracle
Project Costing and Oracle Payables.
When you make adjustments to expense report costs in Oracle Project Costing, you run the
following processes to distribute the costs, create cost accounting events for the adjustments,
and create accounting for the accounting events in Oracle Subledger Accounting:
• PRC: Distribute Expense Report Adjustments
• PRC: Generate Cost Accounting Events
• PRC: Create Accounting
When you make adjustments to expense report invoices in Oracle Payables, you revalidate the
invoice and create accounting for it in Oracle Payables. You then run the process PRC:
Interface Expense Reports from Payables in Oracle Projects to interface the adjustments to
Oracle Project Costing.
Adjustments to project-related expense reports follow the same logic as adjustments to project-
related supplier costs. For a detailed discussion about supplier cost adjustments, see the lesson
titled "Integration with Oracle Purchasing and Oracle Payables."

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 11
Practice - Enter and Approve an Expense Report
Overview
In this practice, you will enter and submit an expense report for Amy Marlin. You will then
approve the expense report as Casey Brown and audit the expense report as Donald Gray.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Enter an Expense Report

You traveled to Montreal to meet with clients regarding the XX Capital Services project. Enter
an expense report for your travel expenses. In Oracle Internet Expenses, create a new expense
report. Use the responsibility iExpenses, Vision Services (USA). Enter the general expense report
information as specified in the following table:

Field Value
Name Marlin, Ms. Amy (34)
Services Department 422
Reimbursement Currency USD - US dollar
Expense Template Travel
Purpose Meeting in Montreal
Approver Brown, Ms. Casey

Enter the receipt-based expenses as specified in the following table:

Line Date Receipt Receipt Expense Justification

Amount Currency Type
1 Yesterday's Date 260.50 USD Airfare Bird Airlines to Montreal
2 Today's Date 198.00 CAD Hotel Le Chateau Simard

Enter the project allocations as specified in the following table:

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 12
 Line Project Task Project Expenditure
Number Number Organization
1 XXCS 2.2 Services-East
2 XXCS 3.0 Services-East

Submit the expense report.

Record the expense report number: _______________________

Approve an Expense Report

You are now in the role of Casey Brown, the expense report approver. Log in as CBROWN with
the password of WELCOME and select the iExpenses responsibility. Find the notification for
your expense report (look for your expense report number) and approve it.

Audit the Expense Report

Log in as DGRAY with the password of WELCOME and select the Internet Expenses Auditor,
Vision Services responsibility to audit the expense report. Use the advanced search option on the
Expenses Audit tab to find your expense report. Enter today's date as the Receipt Package
Received Date. Verify that you received the two receipts and then complete the audit.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 13
Solution - Enter and Approve an Expense Report
Enter an Expense Report

1. Responsibility = iExpenses, Vision Services (USA)

2. Navigate to the Expense Reports page.

• (N) Expenses Home

3. (B) Create Expense Report

4. Enter the general expense report information as specified in the following table:

Field Value
Name Marlin, Ms. Amy (34)
Services Department 422
Reimbursement Currency USD - US dollar
Expense Template Travel
Purpose Meeting in Montreal
Approver Brown, Ms. Casey

5. (B) Next

6. (B) Show Receipt Currency

7. Enter the receipt-based expenses as specified in the following table:

Line Date Receipt Receipt Expense Justification

Amount Currency Type
1 Yesterday's Date 260.50 USD Airfare Bird Airlines to Montreal
2 Today's Date 198.00 CAD Hotel Le Chateau Simard

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 14
 • (B) Save

• (B) Next

8. Allocate the costs to your XX Capital Services project.

• (ST) Project Allocations

• Enter the project allocations as specified in the following table:

Line Project Task Project Expenditure

Number Number Organization
1 XXCS 2.2 Services-East
2 XXCS 3.0 Services-East

• (B) Save

9. Review the expense report.

• (B) Next

10. (B) Save

11. Review the Reimbursable Amounts.

• (B) Next

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 15
 • Click the Warning icon to view any policy violations.

• (B) Return

12. (B) Submit

You have submitted the expense report for approval.

• Record the expense report number: _______________________

Approve an Expense Report

13. (H) Logout

14. Log in as Casey Brown.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 16
 Field Value
User Name CBROWN
Password WELCOME

15. Responsibility = iExpenses

16. Approve the expense report.

• Review the list of open notifications on the Expenses Home page.

• Select the hyperlink for the expense report that you created (look for your expense report
number).

• Review the expense report.

• (B) Approve

• (H) Home

17. (H) Logout

Audit the Expense Report

18. Log in as Donald Gray.

Field Value
User Name DGRAY
Password WELCOME

19. Responsibility = Internet Expenses Auditor, Vision Services

20. Find your expense report.

• Enter the expense report number in the Search by Expense Report Number field.

• (B) Go

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 17
21. Complete the audit.

• Enter today's date in the Receipt Package Received Date field.

• Select the Receipt Verified check box for the two receipts.

• Select Complete Audit from the list in the Expense Report Action field.

• (B) Apply

22. (H) Logout

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 18
Guided Demonstration - Run Expense Report Export
Run Expense Report Export

1. Log out

2. Log in Donald Gray.

Field Value
User Name DGRAY
Password WELCOME

3. Responsibility = Internet Expenses Auditor, Vision Services

4. (T) Expenses Export

5. Accept the default values on the Schedule Request: Name page.

6. (B) Next

7. Accept the default values on the Schedule Request: Parameters page.

8. (B) Next

9. Accept the default values on the Schedule Request: Schedule page.

10. (B) Next

11. Accept the default values on the Schedule Request: Notifications page.

12. (B) Next

13. Accept the default values on the Schedule Request: Printing page.

14. (B) Next

15. Review the request parameters.

16. (B) Submit

17. (B) OK

18. Select the Refresh button to update the status until the program is complete.

19. (ST) Export Results and review any rejections.

20. (H) Logout

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 19
Practice - Interface Expense Report Costs
Overview
In this practice, you will validate and create final subledger accounting for your expense report
invoice in Oracle Payables. Next, you will interface the expense report costs for you project to
Oracle Project Costing and review the expense report expenditure items.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Validate and Create Accounting for the Expense Report Invoice

As a result of the instructor running Expense Report Import in the previous guided
demonstration, your expense report is now an expense report invoice in Oracle Payables. Log in
as SERVICES with the password of WELCOME and select the Oracle Payables, Vision Services
(USA) responsibility.

First, find the invoice on the Invoice Workbench in Oracle Payables. Next, validate the invoice.
After the invoice is validated, create final subledger accounting for the invoice. Select the Final
Post option when you create accounting. Verify that the invoice status is Validated and that
Accounted is Yes.

Interface Expense Report Costs

Switch your responsibility to Projects, Vision Services (USA) and Run the program PRC:
Interface Expense Reports from Payables. Ensure that you select your project as a program
parameter. The program PRC: Interface Expense Reports from Payables automatically submits
the program AUD: Supplier Costs Interface Audit. Review the output report for AUD: Supplier
Costs Interface Audit.

Note your Request ID __________________________

View the Results in Expenditure Inquiry

After the program is complete, query the expense report expenditure items for your XX Capital
Services project in Expenditure Inquiry. Review the expenditure items.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 20
Solution - Interface Expense Report Costs
Validate and Create Accounting for the Expense Report Invoice

1. Log in as SERVICES:

Field Value
User Name SERVICES
Password WELCOME

2. Responsibility = Payables, Vision Services (USA)

3. Navigate to the Find Invoices window.

• (N) Invoices > Entry > Invoices

• (I) Find

4. Find your expense report invoice.

• Enter the header find criteria::

− Invoice Number = Enter your expense report number

• (B) Find

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 21
5. Validate the invoice.

• (B) Actions... 1

• Enable the Validate option.

• (B) OK

6. Create accounting for the invoice.

• (B) Actions... 1

• Enable the Create Accounting option.

• Select the Final Post option.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 22
 • (B) OK

• (B) OK for the message.

7. Verify that the invoice status is Validated and that Accounted is Yes.

8. Close the Invoices window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 23
Interface Expense Report Costs

9. Switch your responsibility.

• (M) File > Switch Responsibility

• Select Projects, Vision Services (USA)

• (B) OK

10. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

11. Select to run a Single Request.

12. (B) OK

13. Select the program PRC: Interface Expense Reports from Oracle Payables from the list of
values in the Name field and Vision Services for the operating unit.

14. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS
Batch Name Leave Blank
End GL Date Leave Blank
End Expenditure Item Date Leave Blank

15. (B) OK

16. (B) Submit

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 24
 • Note your Request ID __________________________

17. (B) No in the Decision dialog box

18. Find your request.

• Select the All My Requests option button.

• (B) Find

19. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing.

Note: Wait for the program with your Request ID to complete. The program PRCPRC:
Interface Expense Reports from Payables automatically submits the program AUD:
Supplier Costs Interface Audit. Look for the AUD: Supplier Costs Interface Audit
program request with your Request ID in the parameters.

20. Review the output report for AUD: Supplier Costs Interface Audit.

• (B) View Output

21. Close the output page and the Requests window and return to the Navigator.

View the Results in Expenditure Inquiry

22. Navigate to the Find Project Expenditure Items window

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 25
 • (N) Expenditures > Expenditure Inquiry > Project

23. Query the expenditure items from the expense report on your project.

• Enter the find criteria:

− Project Number = XXCS
− Project Name = XX Capital Services
− Expenditure Type Class = Expense Reports

• (B) Find

24. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 26
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 27
Integration with Oracle Internet Expenses Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 28
Install and Implement Oracle Internet Expenses

Install and Implement Oracle Internet Expenses

To use integration with Oracle Internet Expenses, you must first implement Oracle Internet
Expenses. For details, see the setup steps in the Oracle Internet Expenses Implementation and
Administration Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 29
Set Profile Options for Project-Related Expense Report Entry

Set Profile Options for Project-Related Expense Report Entry

• PA: Allow Project-Related Entry in Oracle Internet Expenses - Specify whether you
can enter project-related information on expense reports. If you set this option to Yes, then
you must set the OIE: Enable Projects profile option to Yes or Required.
• OIE: Enable Projects - Specify whether you can enter project-related information on
expense reports in Oracle Internet Expenses. If you set this option to Yes or Required, then
you must set PA: Allow Project-Related Entry in Oracle Internet Expenses profile option
to Yes. Select one the following values:
- Yes - Enables the entry of project information.
- No - Disables the entry of project information.
- Required - Requires the entry of project information.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 30
Set Profile Options for Project-Related Expense Report Approval

Set Profile Options for Project-Related Expense Report Approval

• PA: AutoApprove Expense Reports - Specify whether to automatically approve project-
related expense reports submitted in Oracle Internet Expenses. If you set the profile option
PA: AutoApprove Expense Reports to Yes, then Oracle Internet Expenses does not use the
approver specified on the expense report, even if you set the profile option OIE: Approver
Required is set to Yes or Yes with Default. Instead, Oracle Internet Expenses approves the
expense report without management involvement.
• OIE: Enable Approver - Specify whether to enable the Approver field in Oracle Internet
Expenses. When you set this profile option to Yes, the Approver field is available for you
to specify a different employee to approve your expense report. When this profile option is
set to No, the Approver field is hidden.
• OIE: Approver Required - Specify whether you must designate an approver for your
expense reports. Select one the following values:
- Yes - You must always designate an approver.
- Yes with Default - You must always designate an approver and an employee's
supervisor, as defined in Oracle HRMS, is the default value in the Approver field.
- No - You are not required to designate an approver.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 31
 Note: If you set the OIE: Approver Required profile option to Yes or Yes with Default, do not
set the OIE: Enable Approver profile option to No. If you do, the Approver field does not
appear on the General Information page, but users receive a message that the field is required.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 32
Define the Project Expense Report Account Generator

Define the Project Expense Report Account Generator

The Project Expense Report Account Generator is an Oracle Project Costing workflow process
that determines the default account for each project-related expense line created in Oracle
Internet Expenses. When you submit a projects-related expense report, the Expense Report
workflow process uses the Project Expense Report Account Generator to assign the proper
accounting to each project-related expense line on the expense report. The default logic of this
process returns the CCID (Code Combination ID) of the employee who incurred the project-
related expenses. You can define the Project Expense Report Account Generator to meet your
requirements.
Note: When you adjust expense report expenditure items in Oracle Project Costing, Oracle
Project Costing uses AutoAccounting (not the employee's default expense account) to
determine the default expense report cost account. See the lesson titled "Accounting for Costs."
For additional discussion regarding the account generator and Oracle Project Costing, see the
Oracle Projects Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 33
Define a Project-Related Expense Report Template

Define a Project-Related Expense Report Template

In the Expense Report Templates window in Oracle Payables, define project-related expense
report templates. You must define at least one project-related template to submit project-related
expense reports using Oracle Internet Expenses. To define an expense report template for
project-related expense reports:
• Enable the template for Oracle Internet Expenses.
• Assign an Oracle Project Costing expenditure type to each expense item.
- Note: If you want the expense types that appear in the Expense Type list of values in
Oracle Internet Expenses to match the names of the expenditure types in Oracle
Project Costing, then you can define an expense report template where you name each
expense item with the same name as its associated expenditure type.
Instruct users who enter project-related expense reports in Oracle Internet Expenses to use this
template. For additional information about defining expense report templates, see the Oracle
Payables Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 34
Summary

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 35
 Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Internet Expenses

Chapter 12 - Page 36
 Integration with Oracle Time
and Labor
Chapter 13

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 2
Integration with Oracle Time and Labor

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 5
Oracle Time & Labor Overview

Oracle Time & Labor Overview

Oracle Time & Labor integrates with Oracle Project Costing to enable employees and
contingent workers to enter and submit project-related timecards. Employees and contingent
workers enter their own time, which you can subject to an approval process according to your
business rules. You can transfer approved timecards to Oracle Project Costing, Oracle Payroll,
and Oracle Human Resources. After you import the timecards into Oracle Project Costing, you
cost the timecards and derive the default accounting using AutoAccounting. During cost
processing, the raw cost and any additional burden cost is calculated. Finally, you generate cost
accounting events and create accounting for the timecards in Oracle Subledger Accounting.
Oracle Time & Labor integration includes:
• Entry of project information on timecards
• Validation of time against chargeable projects, tasks, and expenditure types and against
transaction controls that you may have implemented
• Transfer of project-related timecards to both Oracle Project Costing and Oracle Payroll
• Automatic population of timecards with projects and expenditure types from your
resource assignments when you use Oracle Project Resource Management

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 6
Disconnected Time Entry

Disconnected Time Entry

You can record your time when away from the office using a spreadsheet and then upload the
spreadsheet to Oracle Time & Labor for review and submission. Once you save the template as
a spreadsheet, you can enter your time for the week. You can add or update existing line items
as desired. You can scroll down within the saved file to view the valid list of projects and
tasks. This feature allows you to select and enter the correct project and task information on the
timecard. When you have entered all the time data, save your work and upload to Oracle Time
& Labor.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 7
Collecting and Processing Project-Related Timecards

Collecting and Processing Project-Related Timecards

The following steps outline the procedure for collecting project-related timecards in Oracle
Time & Labor and processing project-related timecards in Oracle Project Costing:
1. Enter and submit timecards - Employees and contingent workers enter and submit
project-related timecards. People assigned to projects managed through Oracle Project
Resource Management can use the Autopopulate template to automatically record their
projects, tasks, and expenditure types.
2. Approve timecards - During implementation, you define approval and routing rules
using Oracle Workflow. You can set up Oracle Time & Labor to automatically approve
timecards, or require management review and approval.
3. Transfer time to Oracle Project Costing and import transactions - Oracle Human
Resources, Oracle Payroll, and Oracle Project Costing can retrieve timecards from Oracle
Time & Labor. In Oracle Time & Labor, you assign an application set and retrieval rule
group to employees and contingent workers. The application set determines which
applications can retrieve the timecards for an employee or contingent worker and the
retrieval rule group determines the retrieval rules for each application. The retrieval rules
specify which approval processes must be complete for a timecard before another

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 8
 application can retrieve the data. For information about defining application sets, retrieval
rule groups, and retrieval rules, see the Oracle Time & Labor Implementation and User
Guide.
When the timecards are ready for retrieval, you run the program PRC: Transaction Import
to transfer timecards from Oracle Time & Labor to Oracle Project Costing. This program
transfers timecards that belong to employees and contingent workers with Oracle Project
Costing in their application set and retrieval rule group, and that meet the retrieval rules
for Oracle Project Costing. When you submit PRC: Transaction Import, select Oracle
Time and Labor for the Transaction Source parameter and leave the Batch Name
parameter blank.
4. Distribute labor costs - In Oracle Project Costing, run the program PRC: Distribute
Labor Costs or the program PRC: Distribute Labor Costs for a Range of Projects. The
program computes the labor costs for timecard hours and determines the default GL cost
account.
5. Generate cost accounting events - Run the program PRC: Generate Cost Accounting
Events for the Labor Costs process category to derive a default cost clearing account
using AutoAccounting and to create accounting events in Oracle Subledger Accounting.
6. Create accounting and transfer to GL - Run the program PRC: Create Accounting for
the Labor Costs process category to create accounting for the timecards in Oracle
Subledger Accounting. When you run the process in final mode, you can choose to
transfer the final journal entries to Oracle General Ledger and to post the journal entries
in Oracle General Ledger.
For additional discussion regarding costing processes, see the lesson titled “Performing Cost
Processing.”

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 9
Guided Demonstration - Set Timecard Approval Style
The approval process alerts the appropriate person when timecards are ready for review and
approval. In Oracle Time & Labor, the approval style defines who approves timecards. The
approval style also defines what data needs to be approved for each application, and which data
changes require resubmission. For more information about defining approval styles, see the
Oracle Time & Labor Implementation and User Guide.

In this guided demonstration, the instructor will set the Proj Override timecard approval style to
Project Manager. As a result, when you submit a timecard for Amy Marlin in the next practice,
Oracle Time & Labor will route it for approval to the project manager for each charged project.

Approve Timecards

1. Responsibility = OTL Application Developer, Vision Services (USA)

2. Navigate to the Preferences window.

• (N) Preferences

3. Update the approval style.

• (T) Preferences

• Select and expand the Preferences Tree tree node.

• Select and expand Proj Overrides tree node.

• Select Proj Override - Approval Style tree node.

• Click in the Preferences Values field.

• Change the values as specified in the following table:

Field Value
Approval Style Project Manager
Override Approval Style Project Manager

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 10
 • (B) OK

• (I) Save

4. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 11
Practice - Enter and Approve a Timecard
Overview
In this practice, you will enter a timecard and charge time to your XX Capital Services project
and to the Feasibility Study project. You will then approve the resulting timecards as Donald
Gray, the project manager of the XX Capital Services project, and as Bob Cochran, the project
manager of the Feasibility Study project.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Prerequisite
IMPORTANT: Each student will submit a timecard as Amy Marlin. Because a person can have
only one timecard for a period, the instructor must assign each student a period for which to
create and submit a timecard for Amy Marlin. Starting with the period for next week, the
instructor will assign each student a unique period to use for this practice.

Tasks
Enter a Timecard

Submit your timecard in Oracle Time & Labor to account for your work for the week. Use the
responsibility OTL, Vision Services (USA).

Enter the general timecard information as specified in the following table:

Field Value
Period IMPORTANT: Select the unique period
that the instructor assigns to you.
Overriding Approver Leave Blank
Comments Enter brief comments
Template Leave blank
Overwrite No

You worked 6 hours a day, Monday through Friday, performing professional duties on your XX
Capital Services project. Charge this time to task 3.0. You also worked 2 hours a day performing
clerical duties for the Feasibility Study project. Charge this time to task 1.1.1. After you enter the
timecard lines, review and submit the timecard.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 12
In the previous demonstration, the instructor changed the timecard approval style to route
timecards to project managers for approval. As a result, Oracle Time & Labor will route the
approval notification for the XXCS project to Donald Gray for approval and the approval
notification for the Feasibility Study project to Bob Cochran for approval.

Approve the Timecard for the XXCS Project as Donald Gray

Log in as the user DGRAY with the password of WELCOME. Navigate to Donald Gray's
worklist. Select the hyperlink for the notification for the timecard that you submitted for Amy
Marlin, review the notification, and approve the timecard. The 30 hours represents the amount
charged to the XXCS project where Donald Gray is the project manager.

Important: Select the hyperlink that has the dates for the timecard period that your instructor
assigned to you.

Approve the Timecard for the Feasibility Study Project as Bob Cochran

Log in as the user BCOCHRAN with the password of WELCOME. Navigate to Bob Cochran's
worklist. Select the hyperlink for the notification for the timecard that you submitted for Amy
Marlin, review the notification, and approve the timecard. The 10 hours represents the amount
charged to the Feasibility Study project where Bob Cochran is the project manager.

Important: Select the hyperlink that has the dates for the timecard period that your instructor
assigned to you.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 13
Solution - Enter and Approve a Timecard
Enter a Timecard

1. Responsibility = OTL, Vision Services (USA)

2. Navigate to the Recent Timecards page.

• (N) Time > Time Entry

3. (ST) Create Timecard

4. Enter the general timecard information as specified in the following table:

Field Value
Period IMPORTANT: Select the unique period
that the instructor assigns to you.
Overriding Approver Leave Blank
Comments Enter brief comments
Template Leave blank
Overwrite No

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 14
 Important: Be sure to select the period that your instructor has assigned to you. Amy
Marlin can have only one timecard per period.

5. Enter the project information in the first timecard line as specified in the following table:

Field Value
Project XXCS
Task 3.0
Type Professional - (Straight Time)

6. Enter 6 hours of time for each day, Monday-Friday for the first line.

7. Enter the project information in the second timecard line as specified in the following table:

Field Value
Project Feasibility Study
Task 1.1.1
Type Clerical - (Straight Time)

8. Enter 2 hours of time for each day, Monday-Friday for the second line.

9. (B) Save

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 15
10. (B) Continue

11. (B) Submit

In the previous demonstration, the instructor changed the timecard approval style to route
timecards for the appropriate project managers for approval. As a result, Oracle Time &
Labor will route the time for the XXCS project to Donald Gray for approval and the time for
the Feasibility Study project to Bob Cochran for approval.

Approve the Timecard for the XXCS Project as Donald Gray

12. (H) Logout

13. Log in as Donald Gray, as specified in the following table:

Field Value
User Name DGRAY
Password WELCOME

14. Responsibility = Workflow

15. Navigate to the Worklist.

• (N) Self Service Workflow > Notifications

16. Approve your timecard.

• Select the hyperlink for the notification for the timecard that you submitted for Amy
Marlin.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 16
 Important: Select the hyperlink that has the dates for the timecard period that your
instructor assigned to you.

• Review the notification.

• (B) Approve

17. (H) Logout

Approve the Timecard for the Feasibility Study Project as Bob Cochran

18. Log in as Bob Cochran, as specified in the following table:

Field Value
User Name BCOCHRAN
Password WELCOME

19. Responsibility = Workflow

20. Navigate to the Worklist.

• (N) Self Service Workflow > Notifications

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 17
21. Approve your timecard.

• Select the hyperlink for the notification for the timecard that you submitted for Amy
Marlin.

Important: Select the hyperlink that has the dates for the timecard period that your
instructor assigned to you.

• Review the notification.

• (B) Approve

22. (H) Logout

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 18
Guided Demonstration - Import Timecard Costs
Import Timecard Costs

1. Log in as SERVICES as specified in the following table:

Field Value
User Name SERVICES
Password WELCOME

2. Responsibility = Projects, Vision Services (USA)

3. Navigate to the Submit Request window for Transaction Import.

• (N) Expenditures > Transaction Import > Import Transactions

4. Define the parameters for the program PRC: Transaction Import as specified in the
following table:

Field Value
Transaction Source Oracle Time and Labor
Batch Name Leave Blank

5. (B) OK

6. (B) Submit

7. (B) No in the Decision dialog box

8. Find your request.

• (M) View > Requests

• Select the All My Requests option button.

• (B) Find

9. Wait for the programs to finish.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

10. (B) View Output

11. Review the output report.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 19
12. Close the report page and open windows and return to the Navigator when finished.

Review the Imported Expenditure Items in Expenditure Inquiry

13. Navigate to the Find Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > All

14. Query all expenditure items for the class.

• Enter the header find criteria:

− Operating Unit = Vision Services
− Item Dates (From) = Monday of the current week

• (T) Expenditure

• Enter supplier find criteria:

− Transaction Source = Oracle Time and Labor

• (B) Find

• (B) Yes for the Decision message

15. Review the imported expenditure items.

16. Close the open windows and return to the Navigator when finished.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 20
Editing Timecards in Oracle Time & Labor

Editing Timecards in Oracle Time & Labor

A retro adjustment is a change made to a timecard in Oracle Time & Labor after you have
transferred it to other applications. The preference Timecard Status Allowing Edits in Oracle
Time & Labor controls whether you can edit existing timecards. The preference specifies
whether you can only edit new, working, and rejected timecards, or can also edit submitted,
approved, or even processed timecards in Oracle Time & Labor. The preference also specifies
the age of the oldest timecard that you can edit, and how far in advance you can enter
timecards.
Note: If you made any changes to the original timecard data in Oracle Project Costing, then
you cannot edit the timecard in Oracle Time & Labor. You receive an error when you try to
submit the adjusted timecard.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 21
Contingent Worker Timecards with PO Integration

Contingent Worker Timecards with PO Integration

Contingent workers can enter project-related timecards in Oracle Time & Labor with Oracle
Purchasing integration:
• Each timecard line is related to a project and purchase order line.
• The contingent worker must enter a timecard line for each type of work performed (for
example, regular and overtime).
• An amount check is performed against the purchase order during timecard approval.
• You interface approved timecards to Oracle Purchasing and Oracle Project Costing.
• Oracle Project Costing uses the cost rates stored on the purchase order to calculate
contingent worker labor costs.
• You interface additional cost, such as nonrecoverable tax or invoice price variances, to
Oracle Project Costing from the supplier invoice in Oracle Payables.
• You can bill contingent worker costs as labor.
To use this integration, you must enable the Import Contingent Worker Timecards with
Purchase Order Integration implementation option. You can optionally set up AutoAccounting

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 22
 function transactions to determine default credit and debit accounts for contingent worker labor
costs that are different from the default accounts for employee labor costs.
Note: When contingent workers are allowed to enter timecards that are not related to a
purchase order, you must ensure that the purchase order is not related to a project. Otherwise,
the cost for the contingent work will be recorded in Oracle Project Costing twice, once as labor
and once as supplier cost.
Entering Contingent Worker Timecards with Oracle Purchasing Integration
1. Enter a project-related purchase order for the contingent worker labor in Oracle
Purchasing. Associate the purchase order and purchase order line to the contingent worker
assignment in Oracle HRMS.
2. Contingent worker enters project-related timecards in Oracle Time & Labor and assigns a
purchase order and purchase order line to each timecard line.
3. Contingent worker submits timecard for approval. An amount check takes place against
the purchase order during approval processing.
4. Manager approves timecard.
5. Process contingent worker timecards in Oracle Project Costing:
a. Run PRC: Transaction Import for the transaction source Oracle Time and Labor.
b. Run PRC: Distribute Labor Costs. The program retrieves cost rates from purchase
order.
c. Run PRC: Generate Cost Accounting Events (for the process category Labor Cost).
d. Run PRC: Create Accounting (for the process category Labor Cost).
6. Process contingent worker timecards in Oracle Purchasing and Oracle Payables:
a. Run the program Retrieve Time from OTL in Oracle Purchasing to automatically
generate purchase order receipts from approved timecards.
b. Match supplier invoice to the receipt to reduce outstanding balances.
c. Process and pay supplier invoice in Oracle Payables.
d. Run PRC: Interface Supplier Costs in Oracle Project Costing to interface any
additional costs, such as nonrecoverable tax or invoice price variances.
For information about uploading contingent worker timecards using Microsoft Excel, see the
lesson titled "Entering Expenditures."

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 23
Agenda

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 24
Integration with Oracle Time & Labor Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 25
Install and Implement Oracle Time & Labor

Install and Implement Oracle Time & Labor

Some implementation considerations to review for project-related timecards:
• Timecard layouts - Using the Timecard Layout preference, assign timecard layouts to
people who will submit timecards. The layout determines the fields that they can enter,
how the fields are arranged on the page, and the instruction text that they see. Oracle Time
& Labor provides a predefined layout for project-related timecards.
• Timecard templates - A template stores timecard data for reuse. Oracle Time & Labor
predefines a dynamic template named Oracle Project Resource Management Assignments.
This template generates time and labor entries from the project, type, and hours information
held in Oracle Project Resource Management for the person’s assignments. Optionally, you
can enable users to create their own private templates.
• Override approvers - The predefined Oracle Project Costing timecard layout has an
Override Approver field. You can restrict the availability and use of this field. You can also
define and apply a custom Override Approval Style segment and not use the predefined
Oracle Project Costing Override Approver.
For details, see the Oracle Time & Labor Implementation and User Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 26
Set Profile Options for Project-Related Timecards

Set Profile Options for Project-Related Timecards

Set the following profile options related to project-related timecards in Oracle Time & Labor:
• PA: Allow Time Entry of Negative Hours - Determines whether you can enter negative
hours on timecards in Oracle Time & Labor.
• PA: AutoApprove Timesheets - Indicates whether to automatically approve timecards
submitted in Oracle Time & Labor. If you set this profile option to yes, then you do not
need to route or review your timecards.
• PA: Enable Business Messages on Time Entry - Indicates whether Oracle Time &
Labor displays a business message. If you set this profile option to Yes, then Oracle Time
& Labor calls the Business Message Display client extension. For information about the
Business Message Display client extension, see Oracle Time & Labor Implementation and
User Guide.
• PA: Override Approver - Indicates whether you can enter an overriding approver for
timecards in Oracle Time & Labor.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 27
Implement Client Extensions to Route and Approve Timecards

Implement Client Extensions to Route and Approve Timecards

You can modify the AutoApproval client extensions to route and approve timecards according
to your requirements and to enforce business rules. The AutoApproval Extensions contain
procedures to define conditions under which timecards are approved automatically.
• AutoApproval Profile Options Extension - This procedure performs custom validation
for all the expenditure items in an expenditure.
• Expenditure Summary AutoApproval Extension - This procedure contains default
logic to read the values of the PA: AutoApprove Timesheets profile option.
• Timecard AutoApproval Extension - Use this procedure to incorporate additional
approval logic for timecards.
• AutoApproval Routing Extension - Use this procedure to define rules for routing
timecards for approval.
• Timecard Entry AutoApproval Extension - Use this procedure to define validations
during entry and approval of timecards in Oracle Time & Labor.
For information, see: Oracle Projects APIs, Client Extensions, and Open Interfaces Reference
and Oracle Time & Labor Implementation and User Guide.

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 28
Summary

Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 29
 Copyright © 2007, Oracle. All rights reserved.

Integration with Oracle Time and Labor

Chapter 13 - Page 30
 Allocations and
AutoAllocations
Chapter 14

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 2
Allocations and AutoAllocations

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 5
Overview of Allocations

Overview of Allocations
The allocations feature can distribute amounts between and within projects and tasks, or to
projects in other organizational units. For example, you can distribute amounts such as salaries,
administrative overhead, and equipment charges across several projects and tasks. Your
allocations can be as simple or elaborate as you like.
You identify the amounts to allocate (source) and then define the targets, the projects and tasks
to which you want to allocate the source amounts. Optionally, you can offset the allocations
with reversing transactions. Oracle Project Costing gathers source amounts into a source pool,
and then allocates to the targets using the basis method that you specify in the allocation rule.
When you allocate amounts, you create expenditure items whose amounts are derived from one
or more sources:
• Existing summarized expenditure items in Oracle Project Costing
• A fixed amount
• Amounts in an Oracle General Ledger account balance

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 6
Allocation Terminology

Allocation Terminology
• Allocation - An allocation distributes existing amounts between and within projects and
tasks.
• Allocation Rule - A set of attributes that describes how to allocate amounts in a source
pool to specified target projects and tasks.
• Autoallocation Set - A group of allocation rules that you can run in a sequence that you
specify (step-down allocations) or at the same time (parallel allocations).
• Basis Method - How you use an allocation rule to allocate the amounts from a source
pool to target projects. The basis methods include options to spread the amounts evenly,
allocate by percentage, or prorate amounts based on criteria you specify.
• Full Allocation - An allocation method that distributes the total amounts in the specified
source pool. Use a full allocation to process an allocation rule only once in a run period.
• GL Allocation Batch - Allocation batches created in Oracle General Ledger. For
example, GL allocation batches include Mass Allocation, Recurring Journals, and Mass
Budget.
• Incremental Allocation - An allocation method that creates expenditure items based on
the difference between the transactions processed from one allocation to the next. This

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 7
 method is generally suitable if you want to use an allocation rule in allocation runs several
times in a given run period.
• Offsets - Reversing transactions that you can use to balance allocation transactions with
the source or other project.
• Source Pool - A combination of all allocation rule defined source amounts. These costs
can be comprised of summarized projects costs, posted Oracle General Ledger balances,
or fixed amounts.
• Target - The projects and tasks that receive allocation amounts. Allocation rules specify
the targets.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 8
Difference between Allocation and Burdening

Difference between Allocation and Burdening

Allocation uses existing amounts to generate expenditure items, which you can then assign to
specified projects. Burdening uses a set percentage to increase the total cost amount of
expenditure items. This set percentage is an estimate of the overhead. Whether your company
uses allocations, burdening, or both in a particular situation depends on how your company
works and how you have implemented Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 9
Allocation Rules Implementation Steps

Allocation Rules Implementation Steps

Steps to define an allocation rule:
1. Name the allocation rule and define the basic allocation rule information.
2. Define the sources.
3. Define the targets.
4. Define the offset. (optional)
5. If the basis method is Prorate, then specify how to prorate the amounts.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 10
Allocation Rules

Allocation Rules
Allocation rules define how Oracle Project Costing generates allocation transactions:
• The source of the amounts you are allocating.
• The targets - the projects and tasks to which to allocate amounts.
• How much of the source pool you want to allocate, and if you want to include a fixed
amount, GL balance, or client extension (or any combination of these).
• The time period during which the rule is valid.
You can create as many rules as needed, and use them in as many allocation runs as needed.
You can leave the original expenditure amounts in the source project, or offset the amounts
with reversing transactions. In most cases, the reversing transactions decrease the project
balance by the amount of the allocation.
Each allocation rule belongs to an operating unit and cannot be shared with other operating
units. Allocation rule source projects must be from the same operating unit. When cross-charge
is enabled, depending on the Targets Selection, you can allocate to target projects that are in
different operating units, legal entities, or business groups from the source project operating
unit. Offset projects must always be in the same operating unit as source projects.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 11
Basis Method

Basis Method
The basis method defines how the rule divides amounts in the source pool among the targets.
• Spread Evenly - This method is the most simple and direct. The rule divides the source
pool amount equally among all the chargeable target tasks included in the rule.
• Target % and Spread Evenly - Specify the percentage of the source pool to allocate to
each target line. The rule calculates the amount to allocate to the line, and then spreads the
results evenly among the tasks.
• Prorate and Target % and Prorate - These two proration basis methods provide precise
control over how the rule distributes the source pool. The rule uses the attributes set in the
Basis window to derive the rate at which the source pool amount is apportioned among the
target projects and tasks. For the Prorate basis method, the rule uses the basis attributes to
apportion the source amount among all the tasks defined by the rule. For the Target % and
Prorate method, the rule first uses the target percentage to calculate the amount to allocate
to the line, and then goes on to apportion the results among all the tasks.
• Use Client Extension Basis - Another way to define percentages and a basis is to use the
Allocation Basis extension. If you use this extension, then you cannot use the Basis
window.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 12
Basis Method - Spread Evenly

Basis Method - Spread Evenly

In the example, project P1 has three chargeable tasks (A, B, and C) and project 2 has two
chargeable tasks (Y and Z). Using the spread evenly basis method, the allocation program
divides the total amount of the source pool evenly among all chargeable tasks.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 13
Basis Method - Target Percent and Spread Evenly

Basis Method - Target Percent and Spread Evenly

In the example, project P1 has three chargeable tasks (A, B, and C) and project 2 has two
chargeable tasks (Y and Z). Using the target percent and spread evenly basis method, the
allocation program first multiplies the source pool amount by the target line percentage. Within
each target line, the allocation program then divides the source pool amount evenly among the
chargeable tasks.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 14
Basis Method - Prorate

Basis Method - Prorate

In the example, project P1 has three chargeable tasks (A, B, and C) and project 2 has two
chargeable tasks (Y and Z). Using the prorate basis method, the allocation program prorates the
costs based on the total labor hours for each chargeable target task. For example, because
project 1, task A has 10% of the labor hours (40 hours out of 400 hours), it receives 10% of the
source pool allocation ($100 out of $1000). Note that while this example uses labor hours, you
can use other options for the proration basis.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 15
Basis Method - Target Percentage and Prorate

Basis Method - Target Percentage and Prorate

In the example, project P1 has three chargeable tasks (A, B, and C) and project 2 has two
chargeable tasks (Y and Z). Using the target percentage and prorate basis method, the
allocation program first multiplies the source pool amount by the target line percentage that
you assign to each project. Within each target line, the allocation program then prorates the
source pool amount among the chargeable tasks based on the total labor hours for each
chargeable target task. Note that while this example uses labor hours, you can use other options
for the proration basis.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 16
Allocation Rule Definition

Allocation Rule Definition

1. Select the operating unit that owns the allocation rule.
2. Enter a unique rule name and optional description, and specify the effective dates.
3. Select a basis method.
4. For Allocation Method, select Full or Incremental:
- To use the rule only once within the same GL or PA run period, select Full.
- Full allocations distribute all the amounts in the specified projects in the
specified amount class.
- If you generate allocation transactions using a full allocation rule more than
once in a run period, then you will create duplicate transactions in your target
projects. If this happens, then you can reverse the duplicates.
- To use the rule several times within the same GL or PA run period, select
Incremental.
- Incremental allocations create expenditure items based on the difference
between the transactions processed in the previous and current run.
5. For Allocation Period Type, select GL or PA.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 17
 - This field specifies if you want to identify amounts based on the Oracle General
Ledger (GL) fiscal calendar or the Oracle Projects (PA) calendar.
6. Specify the attributes that you want to associate with this rule:
- Target Selection
- Select Operating Unit, Legal Entity, Business Group, or All. The last three
options require cross-charge setup.
- The option you select determines the available project when you select targets
on the Targets window.
- Auto Release
- Enable this option to release the allocation transactions automatically. If this
option is not enabled, then you must release the transactions in a separate step.
- Allow Duplicate Targets (Available only if the rule uses the full allocation method.)
- Enable this option to be able to allocate an amount to a chargeable task two or
more times.
- If you do not allow duplicates, then the rule creates one transaction per target
project and task, even if an allocation run returns a particular target project and
task several times.
7. Select the Allocation Transaction Attributes
- Expenditure Organization
- Expenditure Type Class
- Expenditure Type

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 18
Source Definition

Source Definition
The rule accumulates the amounts for the source pool during a specific period of time. The end
date of that time period is based on the amount class. The amount class is the period or periods
during which the amounts are accumulated. The allocation period type and the amount class
determine the start date.
You must define at least one source. All source projects and tasks must be open and from the
same operating unit. The exception report for the allocation run lists any duplicate projects.
If you are using projects as sources, then the results can change each time you run the
allocation if project statuses change.
To define sources:
1. In the Allocation Pool % field, enter a percentage to specify how much of the source pool
to allocate. The default value is 100%.
2. (Optional) In the Fixed Source Amount field, enter an amount to include in the source
pool.
3. For Amount Class, select from the list of values. Depending on the allocation period type
you selected in the Allocation Rule window, PA or GL precedes the field name.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 19
 4. To use projects as sources, go to Step 5. To use only GL accounts as sources, skip to Step
7.
5. For Amount Type, select from the list of values.
6. Specify the projects whose amounts you want to include in the allocation pool.
- Client extension
- To use projects designated in the Allocation Source client extension, enable the
use Client Extension Sources check box.
- Designate one or more projects
- For Line Num, enter a number greater than 0. You can enter project information
in the following fields: Project Org, Project Type, Class Category, Class Code,
Project, and Task. To exclude a line, select the Exclude check box on the
appropriate line. If you do not enter a task, then the rule uses the amounts for all
the tasks on the source line. You can add columns (Project Name, Service Type,
Task Name, and Task Org) to the Sources window.
- Limit the resources that are part of the designated projects (optional)
- If you do not limit the resources, the rule uses all the resource types in the
specified project in the source pool amount. Select the Resources button. In the
Resources window, enter a name for the resource list. In the Resource field, you
can enter the resource or resource group and the percent you want to include. To
exclude a specific resource, select Exclude on the appropriate line.
- If you exclude a resource, then Oracle Project Costing excludes the entire
amount for that resource regardless of the specified percentage.
7. (Optional) One or more GL accounts whose amounts you want to include in the allocation
pool in the GL Sources region:
- For Line Num, enter an integer greater than 0. Then select from the list of values for
Account and Description.
- You cannot select or enter GL summary accounts (also known as accounts that
contain a parent segment value).
- In the % field, enter the percentage of the account balance that you want to include.
- To subtract the amount in the GL summary account from the source amount, select
Subtract.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 20
Target Definition

Target Definition
Targets are the projects and tasks to which the allocation distributes amounts. You specify the
projects and tasks either in the Target window or with the Allocation Target client extension.
You must define at least one target. Target projects must be open and target tasks must be
chargeable.
How the Target Interacts with the Basis
The rule charges allocation transactions to the target projects and tasks according to the basis
method. The rule first allocates the specified percentage of the source pool to each target line,
and then uses the information in the Basis window to prorate the allocated amount across the
tasks on each line.
Duplicate Target Projects
You can include the same project on multiple lines in the Target window. For example, you
can enter Project Y in the Project field on one line, and then specify a project organization that
includes Project Y on a different line. If you include the same project on multiple lines, then
the Allow Duplicate Targets option in the Allocation Rule window affects the way the rule
behaves:

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 21
 • If you allow duplicate targets, then the rule allocates amounts to the project as many times
as it appears in the transactions the PRC: Generate Allocations Transactions program
generates.
• If you do not allow duplicate targets, then the rule allocates amounts only to the project
with the lowest line number.
To define targets:
To use projects designated in the Allocation Target client extension, enable the Use Client
Extension Targets option.
Specify one or more open projects to which to distribute the amounts in the allocation pool:
• Enter a number in the Line Num field, and then select from the list of values to enter
project information in the Project Org, Project Type, Class Category, Class Code, Project,
and Task fields.
• If you do not enter a task, then the rule distributes the allocation to all the chargeable tasks
in the proportion specified by the basis method.
• You can add columns (Billable/Capitalizable, Service Type, Task Name, and Task Org) to
the Targets window.
• (Optional) If you selected one of the target percentage basis methods in the Allocation
Rule window (Target % and Spread Evenly or Target % and Prorate), then enter a value in
the % field. The value is the percentage of the source pool to allocate to the line. The total
percentage for included targets must equal 100.
• To exclude a project from the target definition, select Exclude on the appropriate line. To
exclude a specific task within a project, enter the project on two lines: on one line, leave
the Task field blank; on the other line, enter the task that you want to exclude and select
Exclude.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 22
Offset Definition

Offset Definition
Offsets are reversing transactions that you can use to balance the allocation transactions with
the source or other project. All projects and tasks to which you apply offsets must be open and
chargeable. Do not specify an offset to the source project if you do not want to change the total
amount in the source project. All offset projects and tasks must be open and chargeable, and in
the same operating unit as the source projects. The rule creates the offset transactions for the
offset project and task when you run PRC: Generate Allocations Transactions.
To define the offset:
1. Select an offset method.
If the source is an Oracle General Ledger account and you want to create offsetting
transactions, then select the offset method Use Client Extension for Project and Task or
Specific Project and Task.
- None - The rule does not create any offset transactions.
- Source Project and Task - The rule creates reversing transactions for the source
projects and tasks.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 23
 - Source Project, Use Client Extension for Task - The rule creates reversing
transactions in specific tasks in the source project. Specify the tasks in the Allocation
Offset Tasks client extension.
- Use Client Extension for Project and Task - The rule creates reversing transactions
in projects and tasks as specified in the Allocation Offset Projects and Tasks client
extension.
- Specific Project and Task - The rule creates reversing transactions in one project
and one of its tasks, as specified in the Project and Task fields.
2. For the fields in the Offset Transaction Attributes region, select from the list of values:
- Expenditure Organization
- Expenditure Type Class
- Expenditure Type

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 24
Prorated Basis Method Definition

Prorated Basis Method Definition

1. In the Allocation Rule window, select the Basis button.
2. Enter the Basis information:
- Basis Category - Select Budget (to use the estimated amounts from the project
budget) or Actual (to use the actual amounts in the project).
- Relative Period - Enter a number to denote the current (0) or earlier (less than 0)
period. For example, to use the period preceding the current one, enter -1.
- Budget Type (Available only if the basis category is Budget) - Select from the list of
budget types. The list of values displays only cost (non-revenue) budget types. The
allocation program uses the latest budget baseline to compute the basis.
3. For Resource List, choose from the list of values those resources to include in the basis
computation.
4. In the Resources area, choose resources and resource groups from the list of values. To
exclude a specific resource or resource group, select Exclude on the appropriate line.
- If you include a resource group, then you cannot also include a resource that is a
member of that group. However, you can exclude the resource.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 25
Copy Allocation Rules

Copy Allocation Rules

Copy a rule to use an existing rule as a template. You can copy rules only within the same
operating unit. For example, the definition of a set of rent allocation rules can be basically the
same; with only a few differences from rule to rule (such as identifying a different set of target
projects). Create the first rule and then copy it to create other similar rules.
To copy an allocation rule:
1. In the Allocation Rule window, find an existing rule that you want to use as a template.
2. Select the Copy To button.
3. Enter a new name and optional description, and then choose OK.
- You see the new rule in the Allocation Rule window.
4. Change the attributes of the rule as needed.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 26
Deleting or Modifying Allocation Rules

Deleting or Modifying Allocation Rules

If an allocation run exists for a rule, you cannot:
• Delete the rule.
• Modify the allocation method.
• Modify the basis method, allocation period type, source amount class, source amount type,
or offset method for an incremental rule.
• Delete or modify source lines.
Error messages notify you of other restrictions as you work with an allocation rule.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 27
Practice - Define an Allocation Rule
Overview
In this practice, you will define an allocation rule to allocate a fixed amount of shared cost to
tasks in your XX Capital Services project.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define the General Allocation Rule Information

The finance department has asked you to define an allocation rule to allocate a fixed amount of
shared costs each month to the tasks in your XX Capital Services project. The costs must be
allocated in full once each GL period. The rule should prorate the costs based on the total
burdened cost for each chargeable task.

Name your rule XXService Allocation. Enter the allocation rule information as specified in the
following table:

Field Value
Operating Unit Vision Services
Name XXService Allocation
Description Enter a brief description
Effective Date From Today's Date
Effective Date To Leave Blank
Basis Method Prorate
Allocation Method Full
Allocation Period Type GL
Targets Selection Operating Unit
Expnd Org Services-East
Expnd Type Class Miscellaneous Transaction
Expnd Type Support Svcs Allocation
Auto Release No
Allow Duplicate Targets No

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 28
Define the Source

The finance department has calculated that they need to allocate a fixed shared cost amount of
100,000.00 USD each month. Use this information to define the source for the allocation rule.

Define the Targets

Allocate the costs to your XX Capital Services project. Your project manager has obtained an
exception that exempts task 3.0 of your XX Capital Services project from the allocation. Define
the targets for the allocation rule accordingly.

Define the Offset

The finance department wants you to create a transaction on task 8.0 of the Service Center
project to offset the allocation transactions. Use the same expenditure organization, expenditure
type class, and expenditure type for the offset transaction that you use for the allocation
transactions.

Define the Basis Information

The amount that the rule allocates to each chargeable task is based on the actual total burdened
cost for the fiscal year to date. Define the basis method and specify a relative period of 0 (current
period) to determine the actual total burdened cost for each task.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 29
Solution - Define an Allocation Rule
Define the General Allocation Rule Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Allocation Rule window.

• (N) Allocations > Allocation Rules

3. Enter the allocation rule information as specified in the following table:

Field Value
Operating Unit Vision Services
Name XXService Allocation
Description Enter a brief description
Effective Date From Today's Date
Effective Date To Leave Blank
Basis Method Prorate
Allocation Method Full
Allocation Period Type GL
Targets Selection Operating Unit
Expnd Org Services-East
Expnd Type Class Miscellaneous Transaction
Expnd Type Support Svcs Allocation
Auto Release No
Allow Duplicate Targets No

4. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 30
Define the Source

5. (B) Sources

6. Enter the source information as specified in the following table:

Field Value
Allocation Pool % 100
Fixed Source Amount 100,000.00

7. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 31
8. Close the Sources window.

Define the Targets

9. (B) Targets

10. Enter the target information as specified in the following table:

Line Project Task Exclude

Num
10 XXCS Leave Blank No
20 XXCS 3.0 Yes

11. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 32
12. Close the Targets window.

Define the Offset

13. (B) Offset

14. Select the Specific Project and Task option button.

15. Specify the project and task as specified in the following table:

Field Value
Project Service Center
Task 8.0

16. Specify the Offset Transaction Attributes as specified in the following table:

Field Value
Expenditure Organization Services-East
Expenditure Type Class Miscellaneous Transaction
Expenditure Type Support Svcs Allocation

17. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 33
18. Close the Offset window.

Define the Basis Information

19. (B) Basis

20. Enter the Basis information as specified in the following table:

Field Value
Basis Category Actuals
Amount Type Total Burdened Cost
GL Amount Class FYTD
Relative Period 0

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 34
 The basis uses the total burdened cost on each chargeable target task for the fiscal year to
date to determine how much of the source to allocate to each task. The system creates an
allocation transaction for each chargeable task based on its relative percentage of burdened
cost within the project.

21. (I) Save

22. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 35
Client Extensions for Allocations

Client Extensions for Allocations

• Allocation Source Extension - Oracle Project Costing calls this extension when you
enable the Use Client Extension Sources check box in the Source window. Use the
Allocation Source extension to include or exclude projects or tasks temporarily when
creating a source pool.
• Allocation Target Extension - Oracle Project Costing calls this extension when you
enable the Use Client Extension Targets check box in the Targets window. Use the
Allocation Targets extension to include or exclude projects or tasks temporarily when
allocating amounts to target projects and tasks.
• Allocation Offset Tasks Extension - Oracle Project Costing calls this extension when
you enable the Use Client Extension for Task check box in the Offsets window. Use the
Allocation Offset Tasks extension to offset some source tasks but not others.
• Allocation Offset Projects and Tasks Extension - Oracle Project Costing calls this
extension when you enable the Use Client Extension for Project and Task check box in the
Offsets window. Use this extension to specify more or different projects and tasks than are
defined in the Sources window.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 36
 • Allocation Basis Extension - Oracle Project Costing calls this extension when you enable
the Use Client Extension Basis check box in the Allocation Rule window. During the
allocation run, the program calls the procedure to get the basis amount for each target
project and task. Use the Allocation Basis extension to use amounts other than target costs
to calculate the basis rate for target projects and tasks.
• Allocation Descriptive Flexfields Extension - Use this extension to define descriptive
flexfields to use when you when define allocation rules. The allocation program can use
the descriptive flexfields when it creates allocation and offset transactions.
• Allocation Dependencies Extension - Use this extension to verify compliance with the
business rules of your choice. For example, you can verify that certain projects or tasks are
never included in a source pool, or that the previous allocation run used a particular rule.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 37
Agenda

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 38
Allocating Costs

Allocating Costs
After you define a rule for allocating costs, you can use the rule in an allocation run.
Processing the rule generates allocation transactions and (if specified) offset transactions in a
draft. The draft is a trial allocation run that you can review and evaluate. If the draft allocation
fails or does not produce the results you expect, then you can delete the draft, change the rule
parameters, and then create another draft. You can create, review, and delete draft runs until
you are satisfied with the results. However, you cannot create a draft if another draft exists for
the same rule. When you are satisfied with the draft run and its status is Draft Success, you can
release the allocation run.
Although you can run the program to generate allocations at any time, it is a good practice to
interface supplier costs and expense reports, run all costing programs, and run summarization
programs to prepare for the allocation to ensure that the allocation run includes all relevant
amounts.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 39
Creating Allocation Runs

Creating Allocation Runs

When you submit the concurrent program PRC: Generate Allocation Transactions, specify the
following parameters:
• Rule Name - Enter the name of the allocation rule to use in this allocation run.
• Period Name - Select the period from which the program will accumulate the source
amount.
• Expenditure Item Date - Enter the expenditure item date for the generated allocation
transactions. The default value is the system date.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 40
Allocation Run Statuses

Allocation Run Statuses

• In Process - The program is not yet complete.
• Draft Success - The program created draft transactions that are ready for release. Oracle
Project Costing does not create the transactions for the target and (if specified) offset
projects and tasks until you release the draft.
• Draft Failure - The program encountered issues and could not create draft transactions.
• Release Success - Oracle Project Costing created the transactions for the target and offset
projects and tasks.
• Release Failure - Oracle Project Costing did not create the transactions, perhaps because
projects or tasks included in the draft run were deleted or closed after the program created
the draft. Delete the run, fix the problem, and then run the generate program again.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 41
Deleting Allocation Runs

Deleting Allocation Runs

During review, if you determine that the allocation is not correct, then you can delete the draft
allocation run for the allocation rule that you specify.
To delete an allocation run:
1. Navigate to the Allocations Runs window.
2. Select the allocation run to delete. The status of the run must be Draft Success, Draft
Failure, or Release Failure.
3. Select the Delete button.
- Initiates the program PRC: Delete Allocations Transactions.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 42
Releasing Allocation Runs

Releasing Allocation Runs

To allocate the transactions to the targets, you release the run. You can release a draft run after
the effective dates of the rule.
To release an allocation run:
1. Navigate to the Allocations Runs window.
2. Select the allocation run to release. The status of the run must be Draft Success.
3. Select the Release button.
- Initiates the program PRC: Release Allocations Transactions.
- After you release the run, the status changes to Release Success or Release Failure.
- You can also use the Submit Request window to submit PRC: Release Allocations
Transactions to release the run.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 43
Reversing Allocation Runs

Reversing Allocation Runs

You can reverse any successful allocation run (the status is Release Success). The reversal
creates reversing expenditure items. If you transferred or split expenditure items before
reversal, then Oracle Project Costing reverses the transferred or split items. Oracle Project
Costing creates reversal entries in the allocation history, so that generate allocations program
considers the reversed amounts for the next incremental allocation. Reversing the allocation
run reverses all of the transactions and you cannot reverse individual transactions. You cannot
reverse an allocation run if any of the target projects in the run cannot accept new transactions.
To reverse an allocation run:
1. Navigate to the Review Allocation Runs window.
2. Select an allocation run that has a status of Release Success.
3. Select the Reverse button.
4. In the Reverse an Allocation Run window, enter the parameters.
5. Select the OK button.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 44
Practice - Process an Allocation Rule
Overview
In this practice, you will update project summary amounts for your project. You will then
generate, review, and release allocation transactions for the allocation rule that you defined in the
previous practice.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Prerequisite

If not done previously, the instructor must set the current reporting period for Vision Services
operating unit to the period for the current week:

• Responsibility = Projects, Vision Services (USA)

• (N) Setup > System > PA Periods

• (B) Set Reporting Period

• Select the period for the current week.

• (B) OK

• (I) Save

Update Project Summary Amounts

Run the program PRC: Update Project Summary Amounts for a Single Project for your XX
Capital Services project to summarize the costs. The allocation rule in this practice uses a prorate
basis method. This basis method uses summary amounts during allocation generation processing
to determine the basis percentage for each chargeable target task.

Generate the Allocation Transactions

You are ready to generate allocation transactions for the current GL period. Submit the program
PRC: Generate Allocation Transactions for the Vision Services operating unit. Specify your rule
name, the current GL period, and today's date as the expenditure item date in the program
parameters.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 45
Note your Request ID __________________________

Review the output report. You may see exceptions on the report. For example, the exception
code PA_AL_ZERO_TXN_BASIS_AMT means that no actual total burdened costs are
associated with the target task. As a result, the program did not allocate costs to the task.

Review and Release the Allocation Run

Use the Review Allocation Runs window to review the status, basis details, source details, and
transaction totals for the allocation run. Release the allocation run. When you release the
allocation run, Oracle Project Costing submits the concurrent program PRC: Release Allocation
Runs.

Note the request ID (appears at the bottom of the window):

Monitor the progress of the request and review the output report.

View the Expenditure Items

Use the Review Allocation Runs window to verify that the run is in Release Success status.
Record the information in the Allocation Expnd Batch field: ________________

Use Expenditure Inquiry (All) to review the released expenditure items. Enter the expenditure
batch number for your allocation run in the Find Expenditure Items window to limit your query.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 46
Solution - Process an Allocation Rule
Update Project Summary Amounts

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Update Project Summary Amounts for a Single Project from the
list of values in the Name field and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS
Through Date Leave Blank
Summarize Cost Yes
Expenditure Type Class Leave Blank
Summarize Revenue Yes
Summarize Budgets Yes
Budget Type Leave Blank
Summarize Commitments Yes

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 47
7. (B) OK

8. (B) Submit

• Note your Request ID __________________________

9. (B) No in the Decision dialog box

10. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

11. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

12. Review the output report.

• (B) View Output

13. Close the output report page.

Generate the Allocation Transactions

14. (B) Submit a New Request...

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 48
15. Select to run a Single Request.

16. (B) OK

17. Select the program PRC: Generate Allocation Transactions from the list of values in the
Name field and Vision Services for the operating unit.

18. Define the parameters for the program as specified in the following table:

Field Value
Rule Name XXService Allocation
Period Name Select Period for the Current Month
Expenditure Item Date Today's Date

19. (B) OK

20. (B) Submit

• Note your Request ID __________________________

21. (B) No in the Decision dialog box

22. Find your request.

• (B) Find Requests

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

23. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 49
24. (B) View Output

Review the output report. You may see exceptions on the report. For example, the exception
code PA_AL_ZERO_TXN_BASIS_AMT means that no actual total burdened costs are
associated with the target task. As a result, the program did not allocate costs to the task.

25. Close the output page and the Requests window and return to the Navigator.

Review and Release the Allocation Run

26. Navigate to the Find Allocation Runs window.

• (N) Allocations > Review Allocation Runs

27. Find your allocation rule.

• Enter the find criteria:

− Operating Unit = Vision Services
− Rule Name = XXService Allocation

• (B) Find

28. Verify that the Run Status is Draft Success.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 50
29. Review the basis details.

• (B) Basis Details

• Close the Basis Details window.

30. Review the source details.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 51
 • (B) Source Details

• Close the Source Details window.

31. Review the transactions.

• (B) Transactions

• (B) Totals

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 52
 The totals are all zeros because your rule uses an offset.

• Close the Transactions window.

32. Release the allocation run.

• (B) Release...

• (B) OK on the Caution dialog box

When you release the allocation run, Oracle Project Costing submits the concurrent
program PRC: Release Allocation Runs.

Note the request ID (appears at the bottom of the window):

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 53
33. Close the open windows and return to the Navigator.

34. Monitor the program.

• (M) View > Requests

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

35. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing.

36. (B) View Output

37. Close the output page and the Requests window and return to the Navigator.

View the Expenditure Items

38. Navigate to the Find Allocation Runs window.

• (N) Allocations > Review Allocation Runs

39. Find your allocation rule

• Enter the find criteria:

− Rule Name = XXService Allocation

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 54
 • (B) Find

40. Record the information in the Allocation Expnd Batch field: ________________

41. Close the open windows and return to the navigator.

42. Navigate to the Find Expenditure Items window.

• (N) Expenditures > Expenditure Inquiry > All

43. Query all expenditure items for your allocation batch.

• Enter the header find criteria:

− Operating Unit = Vision Services

• (T) Expenditure

• Enter supplier find criteria:

− Expenditure Batch = The information you recorded from the Allocation Expnd
Batch field

• (B) Find

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 55
44. Review the expenditure items.

45. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 56
Agenda

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 57
Overview of AutoAllocations

Overview of AutoAllocations
AutoAllocations provide the ability to generate allocations more efficiently. You can group
processes and run them in a specified sequence or at the same time. AutoAllocations is an
Oracle General Ledger and Oracle Project Costing feature. In Oracle General Ledger, the
allocation definition is called a batch. In Oracle Project Costing, the allocation definition is
called a rule.
From an Oracle Project Costing responsibility, you can create AutoAllocation sets that contain
project allocation rules. If Oracle Project Costing is integrated with Oracle General Ledger,
then you can also include GL allocation batches. You can also view AutoAllocation sets that
you create using an Oracle Project Costing responsibility.
From an Oracle General Ledger responsibility, you can create AutoAllocation sets that contain
only Oracle General Ledger batches. You can also view AutoAllocation sets that you create
using an Oracle General Ledger responsibility.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 58
Overview of AutoAllocations

Overview of AutoAllocations
Each rule or batch has a different effect when you run the autoallocation set, depending on the
set type:
• Step-down allocations - Use the results of each step in subsequent steps of the
AutoAllocation set. Oracle Workflow controls the flow of the AutoAllocations set.
• Parallel allocations - Carry out the specified rules all at once.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 59
Overview of AutoAllocations

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 60
AutoAllocation Rules Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 61
AutoAllocation Set Definition

AutoAllocation Set Definition

1. Using an Oracle Project Costing responsibility, navigate to the AutoAllocation
Workbench window.
2. For Allocation Set, enter a unique name for the set.
3. Select the operating unit that owns the set.
4. (Optional) For Description, enter a set description.
5. For Allocation Set Type, select Step-Down or Parallel.
- After you save the allocation set, you cannot change the allocation set type.
- If you create a step-down allocation that contains an Oracle Project Costing allocation
rule, then you cannot roll back any allocations transactions that you generate. You
can, however, choose View Status to see which steps are complete and which failed.
6. Complete the remaining fields:
- Default Contact (Available only for step-down AutoAllocations) - Select the user ID
for the person that you want to approve or notified about the status of the process.
- Step - Enter a step number. The program carries out the steps in numerical order,
although you can enter the steps in any order.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 62
 - Type - Select the type of allocation to include in the set.
- Batch/Rule - Select a GL allocation batch (if Oracle General Ledger is installed and
integrated) or a project allocation rule from the list of values. Items available in the
list of values depend on the selection in the Type field.
- Contact (Available only for step–down AutoAllocations) - Select the user ID (or
accept the default) for the person to notified about the status of the process for this
rule.
- Allocation Method (For GL batches) - Select Incremental or Full.
- Allocation Method (Displayed only for project allocation rules) - The system
displays the allocation method of the selected rule.
7. You can view information about the set or the steps within the set:
- The status of a submitted AutoAllocation set.
- Choose the View Status button.
- Information about the allocations rule or batch for a step.
- Select a step, and then choose the button in the lower-left corner of the
AutoAllocations Workbench window. The window that you see depends on the
type of batch or rule that you select. If you select a project allocation rule, then
you see the Allocations Rules window. If you select a batch, then you see the
appropriate Oracle General Ledger window.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 63
Implementing Workflow and Client Extensions for AutoAllocations

Implementing Workflow and Client Extensions for AutoAllocations

You can implement Workflow and client extensions to expand the capabilities of
AutoAllocations.
Implementing Workflow for AutoAllocations
The PA Step Down Allocations workflow (item type) automates the execution of step-down
autoallocation sets. For more information, see the Oracle Projects Implementation Guide.
Implementing the Allocation Extension
You can use the allocation extension to expand the capabilities of the AutoAllocations feature.
For more information, see the Oracle Projects APIs, Client Extensions, and Open Interfaces
Reference.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 64
Guided Demonstration - Review an AutoAllocation Set
Review the AutoAllocation Set Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the AutoAllocation Workbench window.

• (N) Allocations > AutoAllocations > Workbench

3. Query the RENT ALLOCATION SET AutoAllocation set.

Review the Steps

4. Review the AutoAllocation steps as specified in the following table:

Step Type Batch/Rule Contact Allocation Method

1 Recurring Rent Recurring Journal SERVICES N/A
Journal
2 Project Rent Allocation to Ind & Cap Proj SERVICES Incremental
Allocation

5. Review the Recurring Journal batch.

• Position your cursor on the first step

• (B) Recurring Journals

Oracle Project Costing opens the Define Recurring Journal Formula window.

• (B) Lines

This batch creates a recurring journal for account 01-840-7420-000.

• Close the Journal Entry Line and Define Recurring Journal Formula windows.

6. Review the Project Allocation rule.

• Position your cursor on the second step.

• (B) Project Allocation

Oracle Project Costing opens the Allocation Rule window.

• (B) Sources

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 65
 Note that the source for this allocation rule is account 01-840-7420-000 in Oracle
General Ledger. The GL Allocation Batch in step one posts an amount to this account.
The Project Allocation Rule then allocates the amount in this account to the target
projects.

7. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 66
Agenda

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 67
Submitting an AutoAllocation Set

Submitting an AutoAllocation Set

1. Using an Oracle Project Costing responsibility, navigate to the AutoAllocation
Workbench.
2. In the Allocation Set field, find the set to submit.
3. Choose Submit or Schedule.
4. Enter information for this AutoAllocation set. The fields displayed vary depending on
whether the allocation set contains GL batches, project allocation rules, or both.
- GL batches: Name, Period, and Budget (if your allocation uses budget amounts)
Note: If your set contains Oracle General Ledger batches and your Oracle General
Ledger uses an average balance ledger, then enter a Journal Effective Date,
Calculation Effective Date, and Usage (Standard Balances or Average Balances).
- Project allocation rules: GL Period or PA Period and Expenditure Item Date
5. Select the Submit button or the Schedule button.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 68
Viewing the Status of AutoAllocation Sets

Viewing the Status of AutoAllocation Sets

1. Using an Oracle Project Costing responsibility, navigate to the View AutoAllocation
Statuses window.
2. Select the set to view and then choose a Find or Query command from the View menu.
- To see the Allocation Workbench for this set, select the Allocation Workbench
button.
- You can see more information about a step by selecting the step, and then selecting an
option:
- To see more information about a step, select the Step Detail button.
- To see more information about the workflow process for the step, select the
Monitor Workflow button.

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 69
Summary

Copyright © 2007, Oracle. All rights reserved.

Allocations and AutoAllocations

Chapter 14 - Page 70
 Asset Capitalization
Chapter 15

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 2
Asset Capitalization

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 5
Overview of Asset Capitalization

Overview of Asset Capitalization

Using capital projects, you can define capital assets and capture construction-in-process (CIP)
and expense costs for assets you are creating. When you are ready to place assets in service,
you can generate asset lines from the CIP costs and send the lines to Oracle Assets for posting
as fixed assets. You use capital projects to capture the costs of capital assets you are building,
installing, or acquiring.
You can also define retirement adjustment assets and capture cost of removal and proceeds of
sale amounts (collectively referred to as retirement costs, retirement work-in-process, or
RWIP) for assets you are retiring that are part of a group asset in Oracle Assets. When your
retirement activities are complete, you can generate asset lines for the RWIP amounts and send
the lines to Oracle Assets for posting as adjustments to the accumulated depreciation accounts
for the group asset that corresponds to each asset.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 6
Overview of Asset Capitalization

Overview of Asset Capitalization

Using Capital Projects to Create Capital Assets
You define and build capital assets in capital projects using information specified in the project
work breakdown structure (WBS). You define asset grouping levels and assign assets to the
grouping levels to summarize the CIP costs for capitalization.
You can review and adjust capital project costs before and after capitalization. For example,
you can allocate costs collected under common tasks to multiple CIP assets before you place
them in service. You can also account for additional costs incurred after capitalization, because
Oracle Project Costing allows you to place assets in service before completion of a project.
When you are ready to place a CIP asset in service, you send the capital project amounts to
Oracle Assets as asset lines. Oracle Assets places the asset lines in a holding area where your
fixed assets department can post the capital costs in Oracle Assets as fixed assets. You can
review detail transactions associated with the asset lines in Oracle Project Costing and Oracle
Assets.
Using Capital Projects to Process Retirement Costs
You capture retirement costs in a capital project by recording cost of removal and proceeds of
sale amounts to a task that is designated as a retirement cost task

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 7
 To distinguish cost of removal and proceeds of sale amounts, you must enter proceeds of sale
amounts using expenditure types that you define to specifically classify these amounts. Oracle
Project Costing automatically classifies amounts for all other expenditure types as cost of
removal.
To associate retirement costs with a group asset in Oracle Assets, you create a retirement
adjustment asset in the capital project and identify it with a specific group asset. As with
capital assets, you define asset grouping levels and assign retirement adjustment assets to the
grouping levels to summarize the retirement cost amounts for posting to Oracle Assets.
When retirement activities are complete, you generate asset lines for the retirement cost
amounts and send the lines to Oracle Assets for posting as adjustments to the accumulated
depreciation accounts for the group assets. To communicate notice of an asset retirement to
Oracle Assets, you can optionally initiate retirement requests in Oracle Project Costing that are
automatically passed to Oracle Assets.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 8
Project-Related Asset Processing Flow

Project-Related Asset Processing Flow

You charge expenditures to capital projects in Oracle Project Costing. You collect supplier costs in
Oracle Purchasing and Oracle Payables and run the program PRC: Interface Supplier Costs in Oracle
Project Costing to interface project-related receipt accrual cost from Oracle Purchasing and supplier
costs from Oracle Payables to Oracle Project Costing. Oracle Project Costing, Oracle Purchasing, and
Oracle Payables create accounting entries for CIP, RWIP, and expensed cost in Oracle Subledger
Accounting. In addition, Oracle Project Costing creates accounting in Oracle Subledger Accounting for
supplier cost adjustments in Oracle Project Costing. Oracle Subledger Accounting transfers accounting
entries to Oracle General Ledger.
Oracle Payables uses the Mass Additions Create program to send non-CIP assets to Oracle Assets. If
the non-CIP asset is associated with a capital project, then Oracle Project Costing interfaces the asset
and associated costs from Oracle Payables. In this case, Oracle Project Costing interfaces the non-CIP
asset and asset cost to Oracle Assets.
When you place a CIP asset in service, you interface the asset and associated CIP asset lines to Oracle
Assets. When you retire an asset, you interface the retirement adjustment asset and associated RWIP
asset lines to Oracle Assets. Oracle Assets creates accounting in Oracle Subledger Accounting to clear
the CIP and RWIP accounts and to post asset costs to the appropriate asset or group depreciation
reserve account.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 9
Accounting Example

Accounting Example
In this example, you create a capital project to capture the costs of building a new clean room
and installing air quality monitors. As part of this project, you are removing several air quality
monitors from an existing clean room that is being designated for other uses and retiring them.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 10
Accounting Example

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 11
Accounting Example

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 12
Accounting Example

Accounting Example
In this example, after you transfer the final accounting for the adjustment to Oracle General
Ledger, the total amount in Oracle General Ledger for the CIP-Clean Room account is
9,205.00.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 13
Accounting Example

Accounting Example
Each asset line created by the program to generate asset lines has an associated general ledger
account. After you post the asset lines in Oracle Assets, you can create accounting in Oracle
Subledger Accounting to relieve the CIP or RWIP account, and transfer the amount to the
appropriate asset cost or group depreciation reserve account. Oracle Subledger Accounting
transfers the final accounting entries to Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 14
Accounting Example

Accounting Example
As the final step in the process of accounting for the asset transactions illustrated in this
example, you initiate an asset retirement transaction in Oracle Assets for the air quality
monitors that you removed from the clean room that you are taking out of service. You then
create journal entries to account for the retirement of the group asset cost associated with these
monitors. For more information on processing retirement transactions, see: Asset Retirements,
Oracle Assets User Guide.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 15
Agenda

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 16
Project Types for Asset Capitalization

Project Types for Asset Capitalization

When you create a capital project, you must copy a project template or existing project that is
associated with capital class project type. You cannot change the class (capital, contract, or
indirect) of a project. Capitalization Information specified for a project type:
• Cost Type - Specifies whether to capitalize costs at their burdened or raw cost amount.
• Require Complete Asset Definition - Specifies whether you must complete an asset
definition in Oracle Project Costing before you can interface costs to Oracle Assets. If you
select this option, then you do not need to enter information for the imported asset line in
the Prepare Mass Additions window in Oracle Assets. The interface program places asset
lines with complete definitions directly into the Post queue.
• Override Asset Assignment - This field interacts with the assignment status of the asset
to either call or disregard the Asset Assignment client extension.
• Asset Cost Allocation Method - You can select one of several predefined allocation
methods to automatically distribute indirect and common costs across multiple assets.
Options include Actual Units, Current Cost, Client Extension, Estimated Costs, None,
Standard Cost, and Spread Evenly.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 17
 • Event Processing Method - You can specify a capital event processing method to control
how assets and costs are grouped over time. You can choose to use either periodic or
manual events.
• Grouping Method Specify how to summarize asset lines. You can choose from the
following options:
- All (highest level of summarization)
- CIP Grouped by Client Extension
- Expenditure Category
- Expenditure Category, Nonlabor Resource
- Expenditure Type
- Expenditure Type, Nonlabor Resource
• Group Supplier Invoices - Select to consolidate the expenditure items on a supplier
invoice into one asset line according to the method specified in the Grouping Method
field. Deselect to interface the lines to Oracle Assets as separate mass addition lines.
• Interface Supplier Invoices - If you choose not to group supplier invoices, then you
select a grouping option:
- As New Mass Additions - Interfaces each expenditure item on a supplier invoice line
to Oracle Assets as a separate Mass Addition line. Each line has the status NEW.
- As Merged Mass Additions - Interfaces each supplier invoice line to Oracle Assets
as a separate Mass Addition line with the status MERGED.
• Capitalized Interest Default Schedule - Use this field to specify a default interest rate
schedule for capitalized interest.
• Capitalized Interest Allow Override - Select this check box to allow override of the
default capitalized interest rate schedule at the project level.
For additional information regarding Capitalized Interest, see the lesson titled “Capital
Projects: Capitalized Interest.”
For additional information regarding implementing project types, see the course titled “R12
Project Foundation Fundamentals.”

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 18
Agenda

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 19
Asset Processing Flow

Asset Processing Flow

Creating and processing capital projects consists of a series of steps:
1. Create a new capital project and Work Breakdown Structure using a project template
whose project type is set up for a capital project. Update project and task details if
necessary. You can also create assets when you copy an existing capital project. Assets
associated with the existing project or project template are copied to the new project.
2. Update the transaction controls to determine which transactions to capitalize.
3. Collect CIP, RWIP, and expensed costs for your capital project and make adjustments if
necessary.
4. Define CIP and retirement adjustment assets as needed. You can define assets manually
or using project asset APIs.
5. Specify asset grouping levels and grouping level types within the Work Breakdown
Structure. You can then associate assets with the various grouping levels.
6. Specify the date in service for completed CIP assets or the date retired for retirement
adjustment assets

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 20
 7. Optionally, define capital events to control how assets and costs are grouped, and placed
in service or retired.
8. Generate asset lines.
9. Review asset cost lines and make any necessary adjustments.
10. Run the program to interface assts to Oracle Assets.
11. Run the program to tieback asset lines from Oracle Assets.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 21
Specifying Costs

Specifying Costs
Specifying Capital Asset Transactions to Capitalize
For capital assets, you must specify whether to capitalize or expense each transaction charged
to a capital project. You can use project-level and task-level transaction controls to indicate
which kinds of expenditures are allowable for capitalization. You can disable the Capitalizable
check box for a lowest level task on a capital project to indicate that all transactions charged to
the task will be classified as non-capitalizable.
Retirement Cost
You can select Retirement Cost check box for a task on a capital project to indicate that the
task is for retirement cost processing. When you enable this option, all expenditure items
charged to a task are designated as cost of removal or proceeds of sale amounts that pertain to
retirement adjustment assets. A task identified for processing retirement cost cannot also be
capitalizable.
You cannot make an election on how to account for retirement costs you record to a retirement
adjustment asset. Oracle Project Costing automatically classifies retirement costs as cost of
removal or proceeds of sale amounts based on the expenditure type. You define expenditure
types for the PROCEEDS_OF_SALE_EXP_TYPES lookup type. Oracle Project Costing

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 22
 classifies all amounts you enter for the expenditure types defined in this lookup as proceeds of
sale amounts. Conversely, when you enter amounts for a retirement cost task and specify an
expenditure type that is not defined in the PROCEEDS_OF_SALE_EXP_TYPES lookup type,
Oracle Project Costing automatically classifies the amounts as cost of removal.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 23
Defining Assets for Capital Projects

Defining Assets for Capital Projects

After you create a capital project, you can create capital assets for assets you want to place in
service as fixed assets. You can also create retirement adjustment assets to collect retirement
costs for assets you want to retire that are associated with a group asset in Oracle Assets. You
can define capital assets and retirement adjustment assets separately in different projects or
together in the same project. You can create multiple assets for one project. However, assets
cannot be created for multiple projects.
Creating a Capital (CIP) Asset
• You create capital assets and accumulate costs for fixed assets you are building, installing,
or acquiring. You define an asset in Oracle Project Costing for each capital asset you want
to place in service. To interface a capital asset to Oracle Assets, you must specify an actual
date in service for the asset in Oracle Project Costing.
Creating a Retirement Adjustment Asset
• You create retirement adjustment assets to collect cost of removal and proceeds of sale
amounts for assets associated with a group asset in Oracle Assets you are retiring,
removing, abandoning, or otherwise disposing that are associated with a group asset in
Oracle Assets.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 24
 • When you define a retirement adjustment asset in Oracle Project Costing, you must
specify a valid Oracle Assets group asset identifier as the target asset. You can create
retirement adjustment assets and interface retirement costs to Oracle Assets only for fixed
assets that are associated with group assets in Oracle Assets. To interface a retirement
adjustment asset to Oracle Assets, you must specify a retirement date for the asset in
Oracle Project Costing.
• You can initiate a retirement request in Oracle Project Costing to identify one or more
assets that you are retiring from service. Retirement requests serve as an advice that you
can use to notify your fixed asset department about assets that need to be retired in Oracle
Assets.
For descriptions of the asset attributes, see the Oracle Project Costing User Guide.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 25
Streamlining Asset Creation

Streamlining Asset Creation

Create and Assign Assets Using API’s
The project asset API’s enable you to create, update, and delete project assets and project asset
assignments. This feature enables you to integrate with external asset management systems.
Copying Assets
To streamline the definition of multiple project assets that have similar attributes, you can use
the Copy Asset option on the Assets and Asset Details windows to copy assets within a project.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 26
Asset Grouping Levels

Asset Grouping Levels

You can group by project, top task, lowest level task or mixed task levels. When grouping at
mixed task levels, you can group assets at either the top task or at the lowest task levels, but not
at both levels on the same top-task branch. For example, if you group at the project level,
Oracle Project Costing summarizes all capitalizable costs at all task levels into asset lines at the
project level. If you group at a top task level, Oracle Project Costing summarizes all tasks
below that top task into asset lines for that top task.
Grouping level types determine whether you can associate assets with the grouping level:
• Specific Assets - Select this option to associate assets with the project or task.
• Common Costs - Select this option to group projects or tasks that capture costs you want
to allocate to multiple assets. You cannot associate assets with this grouping level type.
You can change the grouping level type at any time. If you change a grouping level type from
Specific Assets to Common Costs, then Oracle Project Costing deletes existing asset
assignments from the grouping level. Changing the grouping level after you interface assets
does not affect the asset lines that you previously sent to Oracle Assets.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 27
Asset Cost Allocation Methods

Asset Cost Allocation Methods

You can specify an asset allocation method to enable Oracle Project Costing to automatically
allocate unassigned asset lines and common costs across multiple assets. Unassigned asset lines
typically occur when more than one asset is assigned to an asset grouping level. To specify an
asset allocation method for a project, select an allocation method in the Capital Information
window for the project. Optionally, you can override the asset cost allocation method when
defining capital events. You can select one of the following asset allocation methods based on:
• Actual Units - The number of actual units specified for each asset in the Assets window.
• Client Extension - The Asset Allocation Basis extension.
• Current Cost - The grouped CIP cost of each asset.
• Estimated Cost - The estimated cost in the Assets window.
• Standard Unit Cost - A standard unit cost defined for the asset book and category in the
Project Assets Standard Unit Cost window.
• Spread Evenly - The number of assets being capitalized for the project or the event.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 28
Practice - Define and Assign Assets
Overview
In this practice, you will assign an asset cost allocation method to your XX Capital Services
project and set the grouping level for task 3.0 to Common Costs. You will also define two assets
on your project and assign the assets to top-level tasks. Finally, you will run cost distribution
programs for your project to begin preparing costs for capitalization.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Set the Cost Allocation Method for Your Project

After consulting with your project manager, you have decided that when the generate asset lines
program cannot automatically associate an asset line with a single asset, the program should
spread the asset costs evenly across the assets. Set the cost allocation method on your XX Capital
Services project to Spread Evenly.

Set the Grouping Level for Task 3.0

In addition, you want to collect common costs on your project and allocate these costs to assets
at a later point in time. Set the grouping level for task 3.0 to Common Costs.

Define and Assign Assets

The asset manager sent you information regarding two assets that you are building on your XX
Capital Services project.

Define the first asset on your project as specified in the following table:

Field Value
Capitalization Details Tab
Asset Name XXLab Building
Project Asset Type Estimated
Asset Details Tab
Book SVCS CORP
Asset Category BUILDING-OFFICE

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 29
 Asset Number XX1
Actual Units 1
Location, Employee Tab
Location USA-CA-SAN FRANCISCO-NONE
Depreciation Tab
Depreciate Yes
Depreciation Expense Account 01-510-7320-000
Amortize Adjustments Yes
Description Tab
Description (enter freeform) XXLAB BUILDING

Assign the XXLab Building asset to top task 1.0.

Define the second asset as specified in the following table:

Field Value
Capitalization Details Tab
Asset Name XXLab Computer
Project Asset Type Estimated
Asset Details Tab
Book SVCS CORP
Asset Category COMPUTER-SERVER
Asset Number XX2
Actual Units 1
Location, Employee Tab
Location USA-CA-SAN FRANCISCO-NONE
Depreciation Tab
Depreciate Yes
Depreciation Expense Account 01-510-7360-000
Amortize Adjustments Yes
Description Tab
Description (enter freeform) XXLAB COMPUTER

Assign the XXLab Computer asset to top task 2.0.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 30
Distribute Costs for Your Project

In preparation for capitalizing asset costs, you must run cost distribution programs for your
project. First, submit the program PRC: Submit Project Streamline Processes and run the
streamline option LU: Labor/Usage Cost for your project.

After the program completes, submit the program PRC: Distribute Total Burdened Cost for your
XX Capital Services project. Ensure that you select your project as a program parameter. Review
the output report.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 31
Solution - Define and Assign Assets
Set the Cost Allocation Method for Your Project

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Projects window.

• (N) Projects

3. Find your capital services project.

• Enter the find criteria:

− Number = XXCS
− Name = XX Capital Services

• (B) Find

4. Select the XX Capital Services project on the Projects, Templates Summary window.

5. (B) Open

6. In the Options region, select Capital Information.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 32
7. (B) Detail

8. Select Spread Evenly from the list in the Asset Cost Allocation Method field.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 33
9. (I) Save

10. Close the Capital Information window and return to the Projects, Templates window.

Set the Grouping Level for Task 3.0

11. In the Options region, select Tasks.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 34
12. Select task 3.0.

13. (B) Options

14. Double-click the Asset Assignment option.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 35
15. Select the option button for Common Costs.

16. (I) Save

17. Close the open windows and return to the Navigator.

Define and Assign Assets

18. Navigate to the Find Capital Projects window.

• (N) Capitalization > Capital Projects

19. Find your project.

• Enter the find criteria:

− Operating Unit = Vision Services
− Number = XXCS
− Name = XX Capital Services

• (B) Find

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 36
20. (B) Assets

21. Select the Capital Project Assets option button at the top of the window.

22. Define the first asset as specified in the following table:

Field Value
Capitalization Details Tab
Asset Name XXLab Building
Project Asset Type Estimated
Asset Details Tab
Book SVCS CORP
Asset Category BUILDING-OFFICE
Asset Number XX1
Actual Units 1
Location, Employee Tab
Location USA-CA-SAN FRANCISCO-NONE
Depreciation Tab
Depreciate Yes
Depreciation Expense Account 01-510-7320-000
Amortize Adjustments Yes
Description Tab
Description (enter freeform) XXLAB BUILDING

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 37
23. (I) Save

24. (B) Assign Asset

Field Value
To Project No
To Task Yes

25. (T) Top Task

Top Task
1.0

26. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 38
27. Close the Assign Assets window.

28. (I) New

29. Define the second asset as specified in the following table:

Field Value
Capitalization Details Tab
Asset Name XXLab Computer
Project Asset Type Estimated
Asset Details Tab
Book SVCS CORP
Asset Category COMPUTER-SERVER
Asset Number XX2
Actual Units 1
Location, Employee Tab
Location USA-CA-SAN FRANCISCO-NONE
Depreciation Tab
Depreciate Yes
Depreciation Expense Account 01-510-7360-000
Amortize Adjustments Yes

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 39
 Description Tab
Description (enter freeform) XXLAB COMPUTER

30. (I) Save

31. (B) Assign Asset

Field Value
To Project No
To Task Yes

32. (T) Top Task

Top Task
2.0

33. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 40
34. Close the open windows and return to the Navigator.

Distribute Costs for Your Project

35. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

36. Select to run a Single Request.

37. (B) OK

38. Select the program PRC: Submit Project Streamline Processes from the list of values in the
Name field and Vision Services for the operating unit.

39. Define the parameters for the program as specified in the following table:

Field Value
Streamline Option LU: Labor/Usage Cost
Project Number XXCS

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 41
40. (B) OK

41. (B) Submit

• Note your Request ID __________________________

42. (B) No in the Decision dialog box

43. Find your request.

• Select the All My Requests option button.

• (B) Find

44. Wait for the streamline program to finish.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

The following programs run during the streamline processing:

− PRC: Submit Project Streamline Processes
− PRC: Distribute Labor Costs
− PRC: Distribute Usage and Miscellaneous Costs

45. (B) Submit a New Request

46. Select to run a Single Request.

47. (B) OK

48. Select the program PRC: Distribute Total Burdened Cost from the list of values in the Name
field and Vision Services for the operating unit.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 42
49. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS

50. (B) OK

51. (B) Submit

• Note your Request ID __________________________

52. (B) No in the Decision dialog box

53. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

54. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

55. Review the output report.

• (B) View Output

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 43
56. When finished, close the output page and the Requests window and return to the Navigator.

The instructor will generate cost accounting events and create final subledger accounting for
the entire class in the next demonstration.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 44
Specifying an Actual Date in Service or a Retirement Date

Specifying an Actual Date in Service or a Retirement Date

Placing a Capital Asset in Service
When a capital asset is complete, you place it in service. If your project has more than one
capital asset, then you can place each asset in service as it is completed. You do not have to
complete the entire project to place an asset in service. You place an asset in service by
entering the actual date in service for the asset. The actual date in service can be a past, current,
or future date. After you enter the date, generate asset lines and interface the asset lines to
Oracle Assets. When you enter a past actual date in service, Oracle Assets will calculate and
record how much depreciation should have been taken for the asset, if any.
Specifying a Retirement Date for Retirement Adjustment Assets
When the activities associated with retiring, removing, abandoning, or disposing of an asset are
complete, you can specify a retirement date for the retirement adjustment asset to signify the
retirement of the asset. Specifying a retirement date enables you to generate asset lines for the
retirement costs captured in Oracle Project Costing. You can then interface the retirement asset
lines to Oracle Assets for posting to the accumulated depreciation accounts for the associated
group asset. If your project has more than one retirement adjustment asset, then you can retire
each asset as retirement activities are completed.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 45
Capital Events

Capital Events
You can create periodic and manual capital events to control how Oracle Project Costing
interfaces capital project assets and costs to Oracle Assets over time. You use capital events to
group assets and costs before you generate asset lines for capitalization and retirement cost
processing.
You can specify a default event processing method for a capital project type and override it at
the project level. Oracle Project Costing supports the following event processing methods:
• None - Defined groupings are valid for the life of the project
• Periodic Event Creation - Cost and assets are grouped periodically by grouping level
• Manual Event Creation - Cost and assets are grouped manually by the user
When you submit the program PRC: Generate Asset Lines for a Single Project or PRC:
Generate Asset Lines for a Range of Projects for a capital project that uses capital events,
Oracle Project Costing automatically generates asset lines for all defined, unprocessed capital
events.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 46
 Periodic Events
When you use periodic event processing, you submit the concurrent program PRC: Create
Periodic Capital Events to select unprocessed assets and cost amounts for a project based on
the actual date in service and expenditure item date you specify in the process parameters. The
program PRC: Create Periodic Capital Events enables you to create periodic capital events to
group project assets and costs for capitalization and retirement cost processing. You enable
periodic capital event processing for a project by setting the event processing option in the
Capital Information window to Periodic. When you submit this program, Oracle Project
Costing selects unprocessed assets and costs for capital projects based on the actual date in
service, expenditure item date, and project values you specify in the process parameters. The
process then associates the assets and costs with the event period you specify in the process
parameters. You can then submit the program to generate asset lines for the selected assets and
costs.
Manual Events
When you use manual event processing, you can specify the assets and costs that you want to
include in the event, as well as the actual date in service and expenditure item date. You create
capital events from the Capital Projects window:
1. Navigate to the Capital Projects window.
2. Find the capital project for which you want to define a capital event in the Find Capital
Projects window.
3. Choose the capital project you want and choose the Capital Events button.
4. In the Capital Events window, select either the Capital Project Assets Workbench or the
Retirement Adjustment Assets Workbench.
5. Insert a new row to derive the (next) sequential event number, an event name, and
optionally select a different asset allocation method.
6. Save your work.
7. To select assets for the event, choose the Assets button to open the Event Assets window
and choose Attach New Assets.
8. In the Attach New Asset window, enter selection criteria to find one or more assets to
attach to the event and choose OK to return to the Event Assets window.
9. Save your work and close the Event Assets window to return to the Capital Events
window.
10. To select costs for the event, choose the Costs button to open the Event Costs window
and choose Attach New Costs.
11. In the Attach New Costs window, enter selection criteria to find costs to attach to the
event and choose OK to return to the Event Costs window.
12. Save your work and close the Event Costs window to return to the Capital Events
window.
13. To generate asset lines for the event, choose Generate. You can view the status of the
request in the Events window.
Note: You can optionally reverse all assets for the event by choosing the Reverse button.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 47
Generating Summary Asset Lines

Generating Summary Asset Lines

Run PRC: Generate Asset Lines for a Single Project or PRC: Generate Asset Lines for a
Range of Projects to generate summary asset lines.
Prerequisites
Before you generate asset lines, perform the following steps:
1. Cost the transactions by running the following programs:
- PRC: Distribute Labor Costs or PRC: Distribute Labor Costs for a Range of Projects
- PRC: Distribute Usage and Miscellaneous Costs
- PRC: Interface Supplier Costs
- PRC: Interface Expense Reports from Payables
- PRC: Distribute Supplier Cost Adjustments
- PRC: Distribute Expense Report Adjustments
- PRC: Distribute Total Burdened Costs (required if you are capitalizing burdened
costs and you capture burden cost on the same expenditure item)
- PRC: Create and Distribute Burden Transactions (required if you are capitalizing
burdened costs and you capture burden as a separate expenditure item)
Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 48
 - PRC: Generate Cost Accounting Events
Note: You must run this program for each process category for which you have
costs. Alternatively, you can leave the Process Category parameter blank to
generate accounting events for all costs.
- PRC: Create Accounting
Note: You must run this program for each process category for which you have
costs. Alternatively, you can leave the Process Category parameter blank to create
accounting events for all costs.
Important: You must run the program PRC: Create Accounting in final mode for
the expenditure items before you generate asset lines. The generate asset lines
program does not create asset lines for the costs if the corresponding expenditure
items are not successfully accounted in final mode.
2. Run the program to update project summary amounts so you can see the total expense and
CIP/RWIP amounts in the Capital Projects Summary window.
3. If you use periodic or manual capital events to group project assets and costs, then
process the events.
Determining CIP or RWIP Accounting
You must create the final accounting for costs in Oracle Subledger Accounting before you can
generate asset lines for the costs. The program that generates asset lines uses the final
accounting from Oracle Subledger Accounting to determine the CIP or RWIP accounts for
asset lines. This approach ensures that Oracle Project Costing interfaces the final CIP or RWIP
accounts to Oracle Assets. The program uses the predefined post-accounting programs that
Oracle Project Costing provides in Oracle Subledger Accounting to obtain final CIP or RWIP
accounts from Oracle Subledger Accounting. If you define journal line types for Oracle
Subledger Accounting that use different accounting classes, then you must add these
accounting classes to the post-accounting program assignments.
Note: The generate asset lines process obtains the CIP or RWIP accounts from the cost
distribution lines in Oracle Project Costing, and not from Oracle Subledger Accounting, in the
following two situations:
• The Interface Costs to GL option for the type of cost is set to No in Oracle Project Costing
implementation options.
• You import costs from an external non-Oracle system into Oracle Project Costing as
accounted costs. As a result, Oracle Project Costing does not generate accounting events
or create accounting for these costs.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 49
Assigning Asset Lines

Assigning Asset Lines

• Assigning an Asset to Unassigned Asset Lines - When the program that generates asset
lines creates asset lines without an asset assignment, you need to manually assign an asset to
the line before you can send it to Oracle Assets. If unassigned asset lines are associated with
an event, then you can only assign the lines to an asset that is included in the event.
• Changing the Asset Assigned to an Asset Line - You can change the asset or description
for an asset line in the Asset Lines window. However, you cannot change asset lines you
already sent to Oracle Assets.
• Splitting an Asset Line - You can split an asset line and assign the split costs to multiple
assets by using percentages or amounts. You can split lines with and without asset
assignments.
• Note: The Asset Category field displays the asset category related to payables invoice items.
The field does not display the asset category for assets defined in Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 50
Sending Asset Lines to Oracle Assets

Sending Asset Lines to Oracle Assets

Run PRC: Interface Assets to Oracle Assets to send valid capital asset and retirement
adjustment asset lines to Oracle Assets. Then, in Oracle Assets, you can review the mass
addition lines created from the project asset lines in the Prepare Mass Additions window. For
Oracle Project Costing to send asset lines to Oracle Assets, the asset line must meet these
specific conditions:
• The actual date in service or retirement date must fall in the current or a prior Oracle
Assets accounting period.
• A capital asset or retirement adjustment asset must be associated with the asset line.
The program creates one mass addition line in Oracle Assets for each asset line in Oracle
Project Costing, assigning the asset information you entered for the asset in Oracle Project
Costing to the mass addition line in Oracle Assets. You use the Mass Additions process in
Oracle Assets to prepare and post these mass additions. If you did not enter all required asset
information in Oracle Project Costing, then you must enter it for the line in the Prepare Mass
Additions window before you can post it.
The program PRC: Interface Assets to Oracle Assets interfaces both ledger currency amounts
and reporting currency amounts for the asset lines to Oracle Assets.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 51
 In Oracle Assets you can query and review assets posted to Oracle Assets by project number
and task number in the Financial Inquiry window.
Prerequisite:
If you are sending cost adjustments for an asset from Oracle Project Costing to Oracle Assets,
ensure that the original mass addition was posted to Oracle Assets. If the mass addition has not
become an asset, the Interface process will reject the adjustment line.
Tieback Asset Lines from Oracle Assets
After you interface assets to Oracle Assets, run the program PRC: Tieback Asset Lines from
Oracle Assets. This program identifies and updates Oracle Project Costing assets and asset
lines that you interfaced to Oracle Assets. For assets, the program updates the asset details to
reflect the asset number assigned in Oracle Assets and the period in which the asset was
posted. For asset lines, the program updates each line to reflect the Oracle Assets period in
which the asset line was posted.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 52
Guided Demonstration - Create Final Subledger Accounting for
Costs
In preparation to generate asset lines, the instructor will finish processing costs for the entire
class.

Generate Cost Accounting Events

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Generate Cost Accounting Events from the list of values in the
Name field and Vision Services for the operating unit.

6. Leave all the parameters blank. The program will generate cost accounting events for all
process categories.

7. (B) OK

8. (B) Submit

9. (B) No in the Decision dialog box

10. Find your request.

• Select the All My Requests option button.

• (B) Find

11. Wait for the programs to finish.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

• (B) View Output

12. Close the output report page.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 53
Create Accounting

13. (B) Submit a New Request

14. Select to run a Single Request.

15. (B) OK

16. Select the program PRC: Create Accounting from the list of values in the Name field and
Vision Services for the operating unit.

17. Define the parameters for the program as specified in the following table:

Field Value
Process Category Leave Blank (program will
process accounting events for all
process categories)
End Date Friday of the current week
Mode Final
Errors Only No
Report Summary
Transfer to General Ledger Yes
Post in General Ledger Yes
General Ledger Batch Name Leave Blank
Include User Transaction Identifiers No

18. (B) OK

19. (B) Submit

20. (B) No in the Decision dialog box

21. Find your request.

• Select the All My Requests option button.

• (B) Find

22. Wait for the programs to finish.

The following programs run during streamline processing:

− PRC: Create Accounting
− Accounting Program
− Journal Import
− Posting: Single Ledger

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 54
 − Subledger Accounting Balances Update

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

• (B) View Output

23. Close the output report page and the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 55
Practice - Capitalize Assets
Overview
In this practice, you will update summary amounts for your project, place your two assets in
service, generate asset lines, and interface the assets to Oracle Assets. Finally, you will view the
assets in Oracle Assets.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Update Project Summary Amounts

Run the program PRC: Update Project Summary Amounts for a Single Project for your XX
Capital Services project to summarize the costs.

Place Assets in Service

Your project manager has certified that the XXLab Building and XXLab Computer assets are
finished and ready for capitalization. Change the asset type for both assets to As-Built and record
an actual in service date of 31-DEC-2006.

Note: You are entering 31-DEC-2006 in order to demonstrate the interface to Oracle Assets. If
you enter today's date, you will not be able to interface the asset to Oracle Assets because the
asset period is not open.

Generate Asset Lines

The costs on your project are final accounted in Oracle Subledger Accounting and the two assets
have in service dates, so you are now ready to generate asset lines for your XX Capital Services
project. To generate asset lines, use today's date as the Asset Date Through and this Sunday's
date as the PA Through Date. You are also ready to include the costs from common cost task 3.0
when you generate asset lines.

Note your request ID:

Review the output report for the program PRC: Generate Asset Lines for a Single Project.

Review and Assign Asset Lines

Review the asset lines for your XX Capital Services project and answer the following questions:

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 56
 1. Why are all asset lines for task 1.0 assigned to XXLab Building?

2. Why are all asset lines for task 2.0 assigned to XXLab Computer?

3. Why are all asset lines for task 3.0 split between the two assets?

4. Why are the asset lines grouped by expenditure types such as Clerical, Hotel, XXMotor
Pool and Trucks?

After completing the asset line analysis, you decide to move some costs on task 3.0 from XXLab
Computer to XXLab Building. Split an asset line assigned to XXLab Computer for task 3.0 and
assign 85% of the cost to XX Lab Building and the remainder to XXLab Computer.

Interface the Assets to Oracle Assets

When you are satisfied with the asset lines, you are ready to interface the assets to Oracle Assets.
Submit the program PRC: Interface Assets to Oracle Assets. Ensure that you enter your XXCS
project number in both the From Project Number and To Project Number program parameter
fields.

Note your request ID:

Review the output report.

View the Assets in Oracle Assets

You can now view your assets in Mass Additions in Oracle Assets. Use the responsibility Assets,
Vision Services (USA). Navigate to the Find Mass Additions window to query the assets for you
project. For the find criteria, also include SVCS CORP as the Book. Select one of the MERGED
lines, review the details, and view the project details.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 57
Solution - Capitalize Assets
Update Project Summary Amounts

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Update Project Summary Amounts for a Single Project from the
list of values in the Name field and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Project Number XXCS
Through Date Leave Blank
Summarize Cost Yes
Expenditure Type Class Leave Blank
Summarize Revenue Yes
Summarize Budgets Yes
Budget Type Leave Blank
Summarize Commitments Yes

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 58
7. (B) OK

8. (B) Submit

• Note your Request ID __________________________

9. (B) No in the Decision dialog box

10. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

11. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

12. Review the output report.

• (B) View Output

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 59
13. Close the output report page and the open windows and return to the Navigator.

Place Assets in Service

14. Navigate to the Find Capital Projects window.

• (N) Capitalization > Capital Projects

15. Find your project.

• Enter the find criteria:

− Operating Unit = Vision Services
− Number = XXCS
− Name = XX Capital Services

• (B) Find

16. (B) Assets

17. (T) Capitalization Details

18. Place each asset in service.

• Select the asset

• Change the Project Asset Type to As-Built

• Enter an Actual In-Service Date of 31-DEC-2006

Note: You are entering 31-DEC-2006 in order to demonstrate the interface to Oracle
Assets. If you enter today's date, you will not be able to interface the asset to Oracle
Assets because the asset period is not open.

• Repeat for the second asset.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 60
19. (I) Save and close the Assets window.

Generate Asset Lines

20. (B) Generate...

Field Value
Asset Date Through Today's Date
PA Date Through This Sunday's Date
Include Common Tasks Yes

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 61
21. (B) OK

This initiates the Program PRC: Generate Asset Lines for a Single Project. Note your
request ID:

You can see the ID at the bottom of the Oracle Applications window.

22. Close the Capital Projects window.

23. (M) View > Requests

24. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

25. Wait for the process to finish. When the process is complete, select the process.

26. (B) View Output

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 62
27. Close the output page and the Requests window and return to the Navigator.

Review and Assign Asset Lines

28. Navigate to the Find Capital Projects window

• (N) Capitalization > Capital Projects

29. 17. Find your project.

• Enter the find criteria:

− Operating Unit = Vision Services
− Number = XXCS
− Name = XX Capital Services

• (B) Find

30. (B) Lines

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 63
 1. Why are all asset lines for task 1.0 assigned to XXLab Building?

Answer: You assigned only XXLab Building to top task 1.0. As a result, the asset lines
generation program assigned all costs to this asset.

2. Why are all asset lines for task 2.0 assigned to XXLab Computer?

Answer: You assigned only XXLab Computer to top task 2.0. As a result, the asset lines
generation program assigned all costs to this asset.

3. Why are all asset lines for task 3.0 split between the two assets?

Answer: You set the grouping level for task 3.0 to Common Costs and assigned Spread
Evenly as the cost allocation method for your project. As a result, the asset lines
generation program divided the capitalizable costs for task 3.0 evenly between the two
eligible assets.

4. Why are the asset lines grouped by expenditure types such as Clerical, Hotel, XXMotor
Pool and Trucks?

Answer: The project type for your project is Construction. The grouping method
assigned to the project type is Expenditure Type. As a result, the asset lines generation
program grouped all costs by the expenditure type associated with the expenditure type
for each capitalizable expenditure item.

31. Select one of the asset lines for task 3.0 and split it between the two assets.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 64
 • Select an asset line.

• (B) Split Line...

• Enter the split information as specified in the following table:

Asset %
XXLab Building 85.00
XXLab Computer 15.00

32. (B) OK

33. (B) OK on the Caution dialog box

34. Close the open windows and return to the Navigator.

Interface the Assets to Oracle Assets

35. Navigate to the Submit a New Request window

• (M) View > Requests

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 65
 • (B) Submit a New Request

36. (B) Submit a New Request

37. Select to run a Single Request.

38. (B) OK

39. Select the program PRC: Interface Assets to Oracle Assets from the list of values in the
Name field and Vision Services for the operating unit.

40. Define the parameters for the program as specified in the following table:

Field Value
From Project Number XXCS
To Project Number XXCS
Date Placed in Service Through Leave Blank

41. (B) OK

42. (B) Submit

• Note your Request ID __________________________

43. (B) No in the Decision dialog box

44. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

45. Wait for the program to finish. When the program is complete, select the program.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 66
 • Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

46. Review the output report.

• (B) View Output

47. Close the output page and the Requests window and return to the Navigator.

View the Assets in Oracle Assets

48. Switch your responsibility.

• (M) File > Switch Responsibility

• Select Assets, Vision Services (USA)

• (B) OK

49. Navigate to the Find Mass Additions window

• (N) Mass Additions > Prepare Mass Additions

50. Find your assets.

• Enter the find criteria:

− Book = SVCS CORP
− Project Number = XXCS

• (B) Find

51. Review the assets

You will see that your two assets are in the POST queue. Each individual asset line is also
visible. They are MERGED.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 67
 • Select one of the MERGED lines.

• (B) Open

• (B) Project Details...

You can drill back to Oracle Projects from Oracle Assets to see the asset line detail
information.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 68
52. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 69
Agenda

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 70
Adjusting Capital Project Costs

Adjusting Capital Project Costs

You can adjust expenditure items whose cost you sent to Oracle Assets, and send the
summarized asset lines to Oracle Assets. You process these cost adjustments in Oracle Project
Costing and send them to Oracle Assets as adjusting asset lines. You can also collect new
expenditure items for an asset in Oracle Project Costing after you capitalize or retire an asset.
Your cost adjustments can be either positive or negative. For example, you receive a credit
memo from a supplier for a capitalized asset you sent and posted to Oracle Assets. When you
send this credit memo to Oracle Project Costing, you create new negative asset lines, which
you can send to Oracle Assets as a negative cost adjustment to the original asset.
Oracle Project Costing includes the information you enter for the asset on the adjusting asset
line you send to Oracle Assets. If you specify to amortize depreciation adjustments for a capital
asset in Oracle Project Costing, then Oracle Assets amortizes any catch-up depreciation
amount for the adjustment over the remaining life of the asset. Otherwise, it expenses the
catch-up depreciation for the adjustment in the current period.
You cannot send cost adjustments to Oracle Assets until you have posted the original mass
addition line (imported asset line) to Oracle Assets using the Post Mass Additions process.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 71
Reversing Capitalization of Assets in Oracle Project Costing

Reversing Capitalization of Assets in Oracle Project Costing

If you placed an asset in service in error or sent inappropriate asset costs to Oracle Assets, you
can reverse capitalization of the asset in Oracle Project Costing, and send the reversing line to
Oracle Assets as an adjustment.
After the capitalization is reversed, you interface the negative distributions to Oracle Assets.
Those distribution lines are merged with the existing asset reducing the cost to 0. After you
adjust the asset cost to 0, you can retire the asset in Oracle Assets. If depreciation had been
taken on the asset, then there will be a credit to depreciation expense in the reversal period.
Never retire an asset prior to adjusting the cost to 0 or Oracle Assets calculates gains and losses
associated with the retirement. When reversing capitalization, note that:
• If you reverse capitalize an asset in Oracle Assets that was created from Oracle Project
Costing, then this transaction is recorded in Oracle Assets only, and not in Oracle Project
Costing. If this happens, you cannot manually update the corresponding asset in Oracle
Project Costing.
• You cannot send a reversing line to Oracle Assets until you have posted the original asset
using the Post Mass Additions process. You cannot make a negative cost adjustment
(reversal) to a mass addition not yet posted to Oracle Assets.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 72
 • When you choose the action to reverse capitalize an asset, Oracle Project Costing checks
Oracle Assets to determine if the asset was retired previously. If yes, then Oracle Project
Costing issues a warning message and you can either continue processing or cancel the
reversal action.
Reversing Capitalization of a Capital Asset After Depreciation
Oracle Assets processes reversal transactions from Oracle Project Costing as negative cost
adjustments to the original asset. If you have begun depreciating this asset, then Oracle Assets
must reverse the depreciation expense in the period you reverse capitalize the asset.
Before you reverse an asset, ensure that the Amortize Adjustment check box is unchecked for
the asset. If you reverse capitalize an asset for which you specify to amortize adjustments, then
the monthly depreciation on the original cost will not equal the monthly depreciation generated
to account for the asset cost reversal in Oracle Assets. Oracle Assets amortizes the catch-up
depreciation on the negative cost adjustment over the remaining life of the asset.
Recapitalization of Reverse Capitalized Assets
To recapitalize an asset, enter the new Date Placed in Service in Oracle Project Costing so you
can generate new asset lines. You must also manually change the Date Placed in Service for
the asset in the Asset Workbench in Oracle Assets, as the Date Placed in Service cannot be
updated through the Mass Additions process.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 73
Abandoning a Capital Asset in Oracle Project Costing

Abandoning a Capital Asset in Oracle Project Costing

You can abandon a capital asset at any time.
Before Interfacing to Oracle Assets
You can abandon a capital project prior to interfacing to Oracle Assets by changing all
expenditure items from capitalizable to non-capitalizable. The journal entries for the adjusted
costs transfer these costs from a CIP or RWIP account to an Expense account.
After Interfacing to Oracle Assets
If you already interfaced the asset that you want to abandon, then you must reverse capitalize
the asset in the Assets window in Oracle Project Costing. You also need to send the reversing
lines to Oracle Assets to account for the abandoned CIP asset. The program to generate asset
lines creates reversal lines, which you can then interface to Oracle Assets.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 74
Agenda

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 75
Asset Capitalization Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 76
Implement Asset Extensions

Implement Asset Extensions

• Asset Assignment Extension - Implement your company’s rules for assigning an asset to a
task during asset line generation. Oracle Project Costing calls the Asset Assignment
extension:
• For all unassigned assets. You can modify the extension to designate the assets for
specific tasks (asset lines) and thus avoid the UNASSIGNED designation, or you can
assign an asset to the line manually.
• If the Override Asset Assignment check box is selected on the Project Types window
(Capitalization tab). You can modify the extension to override the asset assigned to
specified tasks.
• Asset Cost Allocation Basis Extension - Define your own allocation bases for allocating
unassigned and common costs across multiple project assets. Oracle Project Costing calls this
extension to allocate costs for projects that specify an asset cost allocation method of Client
Extension in the Capital Information window.
• Asset Lines Processing Extension - The program PRC: Generate Asset Lines program (for a
Single Project or a Range of Projects) calls this extension for each project for which it
generates asset lines. Use this extension to automatically create project assets (capital assets

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 77
 and retirement adjustment assets) and asset assignments prior to the creation of asset lines,
based on transaction data (such as inventory issues or supplier invoices) entered for the
project.
• Capital Event Processing Extension - The program PRC: Create Periodic Capital Event
calls this extension for each project for which it creates a capital event. Use this extension to
automatically create project assets (capital assets and retirement adjustment assets) and asset
assignments prior to the creation of capital events, based on transaction data (such as
inventory issues or supplier invoices) entered for the project.
• CIP Account Override Extension - Override the CIP account associated with an asset line
to specify a different account for posting CIP clearing amounts. This capability enables you
to utilize accounts for clearing CIP amounts that are different from the accounts you use to
account for CIP expenditures. This extension allows you to preserve the original CIP cost
account details.
• CIP Grouping Extension - Define a unique method that your company uses to specify how
expenditure lines are grouped to form asset lines. Oracle Project Costing predefines five CIP
Grouping Methods. If these methods do not meet your company’s business needs, then use
this client extension to create your own CIP Grouping Method. After you define the
extension, select the Group by Client Extension grouping method. Oracle Project Costing
calls the CIP Grouping extension when it generates asset lines.
• Depreciation Account Override Extension - Define your own logic for deriving the
depreciation expense account when you define an asset or interface asset lines to Oracle
Assets. Oracle Project Costing calls this extension during update of the Assets and Asset
Details windows and during validation of asset information when you interface asset lines to
Oracle Assets.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 78
Define Standard Unit Costs for Asset Cost Allocations

Define Standard Unit Costs for Asset Cost Allocations

You can select an asset cost allocation method for the project to set up a capital project to
automatically allocate unassigned and common costs to multiple assets. To allocate costs using
the Standard Unit Cost method, you must define a standard unit cost for each asset book and
asset category combination for which you want to allocate costs. When you choose this method
of cost allocation, Oracle Project Costing multiplies the standard unit cost times the units
installed for each asset to determine the proration basis for allocating costs.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 79
Guided Demonstration - Define Standard Unit Costs for Asset
Cost Allocations
Define Standard Unit Costs for Asset Cost Allocations

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Project Asset Standard Unit Costs window.

• (N) Setup > Capitalization > Assets > Standard Unit Costs

3. Enter the standard unit cost for an asset book and asset category combination as specified in
the following table:

Field Value
Asset Book SVCS CORP
Asset Category COMPUTER-PC
Book Currency USD
Cost Per Unit 2,500.00

4. (I) Save

5. Close the Project Asset Standard Unit Costs window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 80
Enable Retirement Cost Processing

Enable Retirement Cost Processing

To enable retirement cost processing features, you must set the value of the site-level profile
option PA: Retirement Cost Processing Enabled to Yes.
This site-level profile option determines whether retirement cost processing windows and
features are enabled in Oracle Project Costing. If you enable retirement cost processing and
you also use Oracle Assets group asset processing features, then you can access all retirement
cost processing features in Oracle Project Costing. However, if you do not use Oracle Assets
group asset processing features, you can only use the retirement requests processing feature.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 81
Define Proceeds of Sale Expenditure Types

Define Proceeds of Sale Expenditure Types

To enter and record proceeds of sale amounts for retirement cost processing in Oracle Project
Costing, you must define unique expenditure types to classify and account for the amounts. To
define and update expenditure types for proceeds of sale, navigate to the Retirement Cost
Classification Lookups window. You can also define and update expenditure types for
proceeds of sale by navigating to the Oracle Project Costing Lookups window and querying
the lookup type: PROCEEDS_OF_SALE_EXP_TYPES.
When you define lookup values, you can use the Tag field to define the sort order in which
Oracle Project Costing displays lookup values in a list of values. If you do not specify tag
values, then Oracle Project Costing sorts the list based on the value displayed in the lookup
Code field.
Do not use the PROCEEDS_OF_SALE_EXP_TYPES lookup type to define expenditure types
that you want to account for as cost of removal. Oracle Project Costing classifies all amounts
you enter for the expenditure types defined in this lookup as proceeds of sale amounts.
Conversely, when you enter amounts for a retirement cost task and specify an expenditure type
that is not defined in the PROCEEDS_OF_SALE_EXP_TYPES lookup type, Oracle Project
Costing automatically classifies the amounts as cost of removal.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 82
Practice - Define a Proceeds of Sale Expenditure Type
Overview
In this practice, you will define a proceeds of sale expenditure type.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define a Proceeds of Sale Expenditure Type

Your company records proceeds of sale amounts for retirement cost processing in Oracle Project
Costing. Define a unique expenditure type to classify and account for the amounts as specified in
the following table:

Field Value
Code XXPROCEEDS OF SALE
Meaning XX-Proceeds of Sale
Description XX-Proceeds of Sale expenditure type
Effective Date From Today’s Date

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 83
Solution - Define a Proceeds of Sale Expenditure Type
Define a Proceeds of Sale Expenditure Type

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Retirement Cost Classification Lookups window.

• (N) Setup > Capitalization > Assets > Retirement Cost Classification

3. Position your cursor in the first Code field.

4. (I) New

5. Define the proceeds of sale expenditure type as specified in the following table:

Field Value
Code XXPROCEEDS OF SALE
Meaning XXProceeds of Sale
Description XXProceeds of Sale expenditure type
Effective Date From Today’s Date

6. (I) Save

7. Close the Retirement Cost Classification Lookups window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 84
Summary

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 85
 Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization
Chapter 15 - Page 86
 Asset Capitalization:
Capitalizing Interest
Chapter 16

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 2
Asset Capitalization: Capitalizing Interest

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 5
Overview of Capitalized Interest

Overview of Capitalized Interest

Capitalized interest (also referred to as Allowance for Funds Used During Construction) is an
estimate of the interest cost that enterprises incur when they invest in long-term capital
projects. Subject to accounting rules and regulatory guidelines, enterprises can capitalize
interest as part of the total cost of acquiring and constructing assets that require an extended
amount of time to prepare for their intended use.
To accommodate this business requirement, Oracle Project Costing enables you to calculate
and record capitalized interest for capital projects. To meet the requirements of regulated
businesses such as those in the utilities industry that can recognize multiple types of capital
interest, you can set up Oracle Project Costing to separately calculate capitalized interest for
multiple interest types such as debt and equity.
Oracle Project Costing calculates capitalized interest on open CIP amounts. You can spread the
cost for one expenditure item across multiple assets. If you have previously capitalized any of
the assets to which the cost is allocated, then Oracle Project Costing excludes the total item
cost from the interest calculation.
You define capitalized interest rate names to represent the interest types to capitalize. After you
define rate names, you can create and maintain capitalized interest rate schedules to assign

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 6
 rates to each organization. For additional discussion regarding defining rate names and rate
schedules, see the section of this lesson titled “Implementing Capitalized Interest.”
The process for generating and recording capitalized interest transactions includes the
following tasks:
• Setting up capital projects for capitalized interest - To calculate capitalized interest for
all eligible capital projects, define the capital information options for each project. You
must also assign each project a status that allows capitalized interest.
• Generating capitalized interest expenditure batches - To generate interest
expenditures, you periodically submit the concurrent program PRC: Generate Capitalized
Interest Transactions.
• Reviewing capitalized interest expenditure batches - After you generate capitalized
interest expenditure batches, review the transactions for accuracy. If necessary, you can
delete or reverse a batch to allow regeneration.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 7
Setting Up Capital Projects for Capitalized Interest

Setting Up Capital Projects for Capitalized Interest

To calculate capitalized interest for all eligible capital projects, you must define the capital
information options for each project and assign each project a status that allows capitalized
interest. You can define values for the following fields in the Capital Information window:
• Allow Capital Interest - Defines whether a project is eligible for capitalized interest. By
default, Oracle Project Costing enables this option for all capital projects. You can
deselect or select this option at any time.
• Capital Interest Schedule - Displays the default capitalized interest rate schedule for the
project type, if any. If the Allow Schedule Override option is enabled for the project type,
then you can override the default interest rate schedule value at the project level.
• Capital Interest Stop Date - You can optionally specify a date beyond which a project is
not eligible for capitalized interest. To calculate interest, this field must either be blank or
contain a date that is later than the end date of the GL period for which you want to
calculate interest.
The Allow Capital Interest and Capital Interest Stop Date fields are also available at the task
level. You can use these fields to control the calculation of capitalized interest for individual
tasks.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 8
Generating Capitalized Interest Expenditure Batches

Generating Capitalized Interest Expenditure Batches

To generate and record capitalized interest expenditures, submit PRC: Generate Capitalized
Interest Transactions. This program calculates capitalized interest and generates transactions
for eligible projects and tasks. When you submit the program, you can specify whether the
program automatically releases expenditure batches. If you choose not to automatically release
the batches, then you must release them manually in the Review Capitalized Interest Runs
window.
The program charges interest expenditures to the same tasks as the expenditure items on which
it calculates interest. The program derives the expenditure organization and expenditure type
values for the interest transactions from the expenditure organization source and expenditure
type attributes that you define for the interest rate name.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 9
Reviewing Capitalized Interest Expenditure Batches

Reviewing Capitalized Interest Expenditure Batches

After you submit PRC: Generate Capitalized Interest Transactions, check the status of each
run and review the results in the Review Capitalized Interest Runs window. You can generate,
review, and delete draft expenditure batches until you are satisfied with the results. To record
the transactions in an expenditure batch, you must release the batch. You can reverse an
expenditure batch after it is released successfully. If exceptions exist for one or more projects,
then you can release the batch to release the successfully generated transactions. After you
resolve the exceptions, you can create a new run to process the exception projects. You cannot
generate a draft expenditure batch if a draft already exists for the same project and GL period.
The rules for releasing, reversing, and deleting capitalized interest expenditure batches are:
• Releasing expenditure batches - You can release batches with the status Draft Success or
Release Failure.
• Reversing expenditure batches - You can reverse expenditure batches with the status
Release Success.
• Deleting expenditure batches - You can delete expenditure batches with the status Draft
Success, Draft Failure, and Release Failure. You cannot delete batches with the status In
Process. You cannot delete batches after they are reversed or released successfully.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 10
Inactive Capital Projects Report

Inactive Capital Projects Report

Depending on your business rules, if a capital project has no activity over a period of time, then
you may need to suspend the generation of capitalized interest for the project. For example, if
the inactive period exceeds six months, then you can enter a Capital Interest Stop Date on the
Capital Information window for the project to suspend capitalized interest calculation.
You can run the MGT: Inactive Capital Projects Report to find capital projects with no activity
for a specific period of time. When you submit the report, you must enter a value for the
parameter Number of Inactive Periods. Enter the minimum number of periods (months) that a
capital project must be inactive to appear on the report.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 11
Agenda

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 12
Capitalized Interest Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 13
Defining Capitalized Interest Rate Names

Defining Capitalized Interest Rate Names

You can define a unique name in the Capitalized Interest Rate Information window for each
type of interest that you want to capitalize. For example, you can define a rate name to
maintain interest rates for debt and another to maintain interest rates for equity.
For each rate name, you can define thresholds that determine when projects become eligible for
interest calculation. You can select interest calculation basis attributes that determine how
Oracle Project Costing calculates interest amounts. For example, you can select an interest
method to specify whether Oracle Project Costing calculates interest on a simple or compound
basis. You can specify a period rate convention to determine whether Oracle Project Costing
spreads interest amounts evenly across accounting periods or derives the interest amounts
based on the number of days in each accounting period.
You can specify the current period convention and expenditure type exclusions to determine
the CIP balance on which Oracle Project Costing calculates interest. The current period
convention controls how much of the current period CIP costs Oracle Project Costing includes
in the balance on which it calculates interest. Expenditure type exclusions prevent interest
calculation on specific types of costs.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 14
Defining Capitalized Interest Rate Names

Defining Capitalized Interest Rate Names

The process for defining a capitalized interest rate name includes the following tasks:
• Defining rate names - Define a unique name for each interest rate type.
• Defining additional information - Specify an expenditure organization source,
optionally define thresholds, and select attributes for the interest calculation basis.
• Define expenditure type exclusions - Optionally, select expenditure types to exclude
from the cost basis used to calculate capitalized interest.
To define a rate name:
1. Navigate to the Capitalized Interest Rate Information window.
2. Enter a unique rate name and optionally a description.
3. Select the expenditure type for generated interest transactions.
- The expenditure type list displays only expenditure types with the expenditure type
class Miscellaneous Transaction.
4. Enter an effective start date for the rate and optionally an end date.
- After you use a rate name for creating interest transactions, the following restrictions
apply to updating the effective dates:

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 15
 - You cannot change the effective start date to a date later than the earliest period
start date associated with existing capitalized interest calculation runs.
- You cannot change the effective end date to a date prior to the latest period end
date associated with existing capitalized interest calculation runs.
To define additional information:
1. In the Capitalized Interest Rate Information window, select the rate name to update, and
select the Additional Information button.
2. Select an expenditure organization source to define the expenditure organization for
generated interest transactions.
3. Optionally, select a threshold amount type to use when determining whether a project is
eligible for capitalized interest.
- You can specify any combination of threshold settings. All entered thresholds must
be met before Oracle Project Costing calculates interest.
4. If you select the threshold amount type Budget, then select the budget type or plan type
you use to define cost budget amounts. If you use budget types for some projects and
plan types for other projects, then select a value for both.
5. Optionally, enter a project threshold amount.
- If you use the threshold amount type Budget and a budget is not defined for a
project, then the project is ineligible for interest calculation.
6. Optionally, enter a number of days from the project start date at which the project is
eligible for capitalized interest calculation.
7. Optionally, enter a task threshold amount.
- If you use the threshold amount type Budget and a budget is not defined for a task,
then the task is ineligible for interest calculation.
8. Optionally, enter a number of days from the task start date at which the task is eligible for
capitalized interest calculation.
9. Select a current period convention to specify the portion of the current period CIP amount
to include in the interest calculation.
10. Select a period rate convention to specify how Oracle Project Costing spreads interest
amounts across accounting periods.
11. Select an interest method to specify whether to use a simple or compound interest
calculation.
To define expenditure type exclusions:
1. In the Capitalized Interest Rate Information window, select the rate name to update, and
select the Expenditure Type Exclusion button.
2. Select the operating unit for the exclusion and select the Find button.
3. Select one or more expenditure types that you want to exclude from the CIP basis on
which interest is calculated.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 16
Practice - Define a Capitalized Interest Rate Name
Overview
In this practice, you will define a capitalized interest rate name for local debt costs.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define the Basic Rate Name Information

Your company plans to calculate capitalized interest for costs incurred when you invest in long-
term capital projects. Define a capitalized interest rate name to represent the interest type that the
finance department plans to capitalize as specified in the following table:

Field Value
Rate Name XXDebt Costs-Local
Description Cost of Borrowings
Expenditure Type Interest

Define the Additional Information

Define additional information for the capitalized interest rate name. For the operating unit Vision
Services, you want the expenditure organization source to be the project owning organization.
Each project must have an Open CIP amount of 10,000.00 and be at least 30 days from the start
date to meet the threshold for calculation of capitalized interest. Select Full as the current period
convention to specify the portion of the current period CIP amount to include in the interest
calculation. Choose to spread the amounts evenly across accounting periods. Finally, assign the
Simple interest method to this capitalized interest rate name.

Define the Expenditure Type Exclusions

For Vision Services, exclude the following expenditure types from interest rate calculation for the
capitalized interest rate name:
− F&A Costs
− Fringe
− Overhead

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 17
Solution - Define a Capitalized Interest Rate Name
Define the Basic Rate Name Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Capitalized Interest window.

• (N) Setup > Capitalization > Interest > Rate Names

3. Position your cursor in the first Rate Name field.

4. (I) New

5. Define a capitalized interest rate name as specified in the following table:

Field Value
Rate Name XXDebt Costs-Local
Description Cost of Borrowings
Expenditure Type Interest
Effective Date From Today's Date

6. (I) Save

Define the Additional Information

7. (B) Additional Information

8. Define the capitalized interest rate information as specified in the following table:

Field Value
Operating Unit Vision Services
Exp Organization Source Project Owning Org

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 18
 Amount Type Open CIP
Budget Type Leave Blank
Plan Type Leave Blank
Project - Amount 10,000.00
Project - Days 30
Task - Amount Leave Blank
Task - Days Leave Blank
Current Period Convention Full
Period Rate Convention Spread Evenly
Interest Method Simple

9. (I) Save

10. Close the window with the additional information and return to the first window

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 19
Define the Expenditure Type Exclusions

11. (B) Expenditure Type Exclusion

12. Define capitalized interest rate exclusions for the operating unit Vision Services as specified
in the following table:

Expenditure Type Expenditure Category (View Only)

F&A Costs Indirect Costs
Fringe Overhead
Overhead Overhead

13. (I) Save

14. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 20
Defining Capitalized Interest Rate Schedules

Defining Capitalized Interest Rate Schedules

You define interest rate schedules to create and maintain rates for interest calculation. You
maintain rates by organization and rate name. You can specify an interest rate schedule for
each project type. The rate schedule you define for a project type is the default rate schedule
for all projects you create for the project type. You can optionally allow override of the default
rate schedule at the project level.
Define capitalized interest rate schedules in the Capitalized Interest Rate Schedule window.
Interest rate schedules enable you to maintain interest rates at the organization level. If you do
not define a rate for an organization, then the capitalized interest calculation program uses the
rate for the next higher level organization in the organization hierarchy.
You can assign an interest rate schedule to a project type and optionally allow override of the
assigned schedule at the project level.
To define an interest rate schedule:
1. Navigate to the Capitalized Interest Rate Schedule window.
2. Enter a rate schedule name and optionally a description.
3. Enter an effective from date and optionally enter an end date.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 21
 4. Select an organization hierarchy to specify the source of assignment organizations.
5. Enter a hierarchy version number. The hierarchy version is the default version of the
organization hierarchy to be applied to the schedule.
6. Select a start organization within the organization hierarchy.
7. In the Versions region, enter a version name to define a unique set of rates.
8. Enter a start date for the version and optionally enter an end date.
- Enable the Hold check box to hold this schedule from compiling.
- Choose the Details button to review the details of a revision.
9. In the Multipliers region, select an organization name to which to assign an interest rate.
10. Select a rate name to which to assign an interest rate.
11. Enter an interest rate in the Multiplier field. Enter an annual rate to use for this rate name
and organization.
- Enter a decimal and not a percentage value. For example, for 10% you enter 0.10.
- Optionally, choose the Copy button to copy multipliers from one schedule revision
to a new revision.
12. Save your work.
13. After you have completed entry of all multipliers, choose Compile to compile new
multipliers. When you compile a schedule, Oracle Project Costing automatically submits
PRC: Compile Rate Schedule.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 22
Practice - Define a Capitalized Interest Rate Schedule
Overview
In this practice, you will define a capitalized interest rate schedule for capital debt costs.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define Capitalized Interest Rate Schedule Header Information

Define a capitalized interest rate schedule to specify the multipliers for the XXDebt Costs-Local
capitalized interest rate name that you defined in the previous practice. Define the information
for the provisional capitalized interest rate schedule and name it XXDebt Cost Schedule. Use the
organization hierarchy information as specified in the following table:

Field Value
Hierarchy Global
Version 1
Start Org Vision Corporation

Define the Version Information

Create the initial version of the schedule. Name the first version and identify the first day of
current month as the start date. You do not have an end date for this version at this time.

Define the Multipliers and Compile

First, enter the multiplier for Vision Corporation, the start organization that you specified for the
hierarchy. Interest rates for operating your Services-East organization are higher than for other
organizations, so the finance department has provided you with a separate multiplier for
Services-East. Enter the multipliers as specified in the following table:

Organization Rate Name Multiplier

Vision Corporation XXDebt Costs-Local .25
Services-East XXDebt Costs-Local .37

When you are finished, save and compile the schedule.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 23
Solution - Define a Capitalized Interest Rate Schedule
Define Capitalized Interest Rate Schedule Header Information

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Capitalized Interest Rate Schedule window.

• (N) Setup > Capitalization > Interest > Rate Schedules

3. Enter the rate schedule header information as specified in the following table:

Field Value
Name XXDebt Cost Schedule
Description Enter a brief description
Effective Date From Today's Date
Effective Date To Leave Blank
Hierarchy Global
Version 1
Start Org Vision Corporation

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 24
4. (I) Save

Define the Version Information

5. Enter the name and dates for the version as specified in the following table:

Field Value
Name Version 1
Start Date First day of the current month
End Date Leave Blank

6. (I) Save

Define the Multipliers and Compile

7. Enter the multiplier information as specified in the following table:

Organization Rate Name Multiplier

Vision Corporation XXDebt Costs-Local .25
Services-East XXDebt Costs-Local .37

8. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 25
9. (B) Compile

Selecting the Compile button submits a concurrent program - PRC: Compile Capitalized
Interest Rate Schedule.

10. Close the Capitalized Interest Rate Schedule window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 26
Specifying Capitalized Interest Rate Schedules for Project Types

Specifying Capitalized Interest Rate Schedules for Project Types

You can specify a default capitalized interest rate schedule for a capital project type. The rate
schedule that you specify for a project type is the default rate schedule for all projects that you
create for the project type. In addition, you can specify whether you can override the default
schedule at the project level.
To specify a default capitalized interest rate schedule for a capital project type and set the
override control, navigate to the Capitalization Information tab on the Project Types window.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 27
Guided Demonstration - Specify a Capitalized Interest Rate
Schedule for a Capital Project Type
Specify a Capitalized Interest Rate Schedule for a Capital Project Type

For the guided demonstration, you will specify the capitalized interest rate schedule for an
existing capital project type.

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Project Types window.

• (N) Setup > Projects > Project Types

3. Query the Construction project type.

• Enter query mode: (M) View > Query By Example > Enter

• Enter Construction in the Name field.

• Run the query: (M) View > Query By Example > Run

4. (T) Capitalization Information

5. Enter the capitalized interest information as specified in the following table:

Field Value
Default Schedule Select one of the student's XXDebt Cost Schedule
from the previous practice.
Allow Override Yes (enable check box)

6. (I) Save

7. Close the Project Types window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 28
Practice - Assign a Capitalized Rate Schedule to a Project
Overview
In this practice, you will define a capitalized interest rate name for local debt costs.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Prerequisite
The instructor must perform the previous guided demonstration before you do this practice. The
Allow Override check box for capitalized interest must be enabled for the Construction project
type. Otherwise, you will be unable to update the capitalized interest rate schedule for your XX
Capital Services project.

Tasks
Assign a Capitalized Rate Schedule to the XX Capital Services Project

Your project manager has asked you to set up your XX Capital Services project for capitalized
interest calculation for a six month period. Assign the XXDebt Cost Schedule to the project,
allow capitalized interest calculation, and specify a capitalized interest stop date.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 29
Solution - Assign a Capitalized Rate Schedule to a Project
Assign a Capitalized Rate Schedule to the XX Capital Services Project

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Projects window.

• (N) Projects

3. Find your capital services project.

• Enter the find criteria:

− Number = XXCS
− Name = XX Capital Services

• (B) Find

4. Select the XX Capital Services project on the Projects, Templates Summary window.

5. (B) Open

6. In the Options region, select Capital Information.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 30
7. Define the capital interest information as specified in the following table:

Field Value
Capitalized Interest Schedule XXDebt Cost Schedule
Allow Capital Interest Yes (enable check box)
Capital Interest Stop Date Enter a date six months from today

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 31
8. (I) Save

9. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 32
Setting Project Status Controls for Capitalized Interest

Setting Project Status Controls for Capitalized Interest

You use project status controls to determine whether Oracle Project Costing calculates
capitalized interest throughout the various stages of a project. By default, all project statuses to
which you assign a system status of Approved allow calculation of capitalized interest. You
must determine the project statuses for which to allow the calculation of capitalized interest
and update project status controls accordingly.
To update project status controls for capitalized interest, navigate to the Project Statuses
window and select a project status. For each status, either select or deselect the Allow check
box for the Capitalized Interest status controls action.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 33
Guided Demonstration - Set the Project Status Control for
Capitalized Interest
Set the Project Status Control for Capitalized Interest

For the guided demonstration, you will set the project status control for capitalized interest for an
existing project status.

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Statuses window.

• (N) Setup > System > Statuses

3. Query the Submitted project status.

• Enter query mode: (M) View > Query By Example > Enter

• Enter Project in the Status Type field.

• Run the query: (M) View > Query By Example > Run

• Scroll down to find the Submitted project status.

4. In the Status Controls region, scroll down until you find the Capitalized Interest action.

5. Enable the Allow check box for the Capitalized Interest action.

6. (I) Save

7. Close the Statuses window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 34
Implementing the Capitalized Interest Extension

Implementing the Capitalized Interest Extension

The Capitalized Interest Extension has the following procedures:
• Target Task Override Procedure - Enables you to redirect capitalized interest
transactions to specific tasks.
• Expenditure Organization Procedure - Enables you to specify organizations other than
the source project owning organization or source task owning organization as the
expenditure organization for generated transactions.
• Interest Rate Multiplier Override Procedure - Enables you to define multiple interest
rate multipliers based on the rate name and task owning organization.
• Interest Override Procedure - Enables you to define your own calculations for
capitalized interest.
• Interest Threshold Procedure - Enables you to define duration and amount thresholds at
levels lower than the operating unit.
• Grouping Method Procedure - Enables you to specify grouping criteria.
• Get Transaction Attributes Procedure - Enables you to control how Oracle Project
Costing populates the transaction attribute columns.

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 35
Summary

Copyright © 2007, Oracle. All rights reserved.

Asset Capitalization: Capitalizing Interest

Chapter 16 - Page 36
 Cross Charge
Chapter 17

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 2
Cross Charge

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 5
Overview of Cross Charge

Overview of Cross Charge

When projects share resources within an enterprise, it is common to see those resources shared
across organization and country boundaries. Further, project managers can also divide the work
into multiple projects for easier execution and management. The legal, statutory, or managerial
accounting requirements of such projects often present complex operational control, billing,
and accounting challenges. Cross charge enables project managers to easily view the current
total costs of the project, regardless of who performs the work or where it is performed.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 6
Cross Charge Terminology

Cross Charge Terminology

• Borrowed and Lent - A method of processing cross charge transactions that generates
accounting entries to pass cost or share revenue between the provider and receiver
organizations within a legal entity.
• Cross Charge - The act of charging costs directly to a project outside your own organization,
operating unit, ledger, legal entity, or business group. A cross charge is the act of entering a
transaction where the expenditure organization and the task owning organization are
different. End users see no change; the cross charge is just another project in their List of
Values.
• Cross Charge Transaction - An expenditure item whose provider operating unit is different
from the receiver operating unit, the provider organization is different from the receiver
organization, or both.
• Cross Charge Type - One of the three types of cross charge transactions: intercompany,
inter–operating unit, and intra-operating unit.
• Intercompany Billing - A method of internally billing work performed by a provider
operating unit and charged to a project owned by a receiver operating unit. The provider

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 7
 operating unit creates an Oracle Receivables invoice, which is interfaced as an Oracle
Payables invoice to the receiver operating unit.
• Provider Operating Unit - The operating unit whose resources provide services to another
project or organization. For cross charge transactions, the provider operating unit is the
expenditure operating unit; the project operating unit owns the intercompany billing project.
• Provider Organization - For cross charge transactions, the organization that provides
resources to another organization. The default is the expenditure organization or the non-
labor resource organization, which can be overridden using the Provider and Receiver
Organization Override client extension.
• Receiver Operating Unit - An operating unit whose projects receive services from another
project or organization.
• Receiver Organization - The operating unit whose projects receive services from another
project or organization.
• Transfer Price - The price agreed upon by the provider and receiver organizations in a cross
charged transaction.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 8
Cross Charge Types Example

Cross Charge Types Example

A transaction’s cross charge type depends on whether the provider operating unit, organization,
and legal entity are different from those of the receiver. You cannot change the provider or
receiver operating unit, but you can use the Provider and Receiver Organizations Override
client extension to override the default provider organization and receiver organization. Oracle
Project Costing provides three types of cross charge transactions:
• Intercompany - Operating units and legal entities are different.
• Inter-Operating Unit - Operating units are different, but legal entities are the same.
• Intra-Operating Unit - Operating units and legal entities are the same, but the
organizations are different.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 9
Processing Methods

Processing Methods
You can choose one of the following processing methods for cross charge transactions:
• Borrowed and Lent Accounting - Oracle Project Costing creates accounting entries to
pass costs and revenue across organizations without generating internal invoices. Oracle
Project Costing determines the appropriate cost or revenue amounts based on the transfer
price rules of the provider and receiver organizations. Borrowed and lent accounting
entries provide a financial view of an organization’s performance.
• Intercompany Billing Accounting - Companies choose the intercompany billing method
largely due to legal and statutory requirements. Oracle Project Costing generates physical
invoices and corresponding accounting entries at legal transfer prices between the internal
seller (provider) and buyer (receiver) organizations when they cross a legal entity
boundary or operating units. For additional discussion of Intercompany Billing, see the
Advanced Topic lesson titled “R12 Projects Advanced: Intercompany Billing.”
• No Cross Charge Process - Companies generally process cross charges in Oracle Project
Costing using the borrowed and lent or intercompany billing method. However,
companies may not need to process cross charge transactions, if, for example, you have
performed intercompany billing manually in Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 10
Agenda

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 11
Borrowed and Lent Processing

Borrowed and Lent Processing

The borrowed and lent processing method creates accounting entries ONLY to pass costs or
share revenue between the provider and receiver organizations within a legal entity. Borrowed
and lent processing is a general ledger reclassification of funds and costs. No additional Oracle
Project Costing transactions exist and Oracle Project Costing does not generate any legal
documents.
The borrowed and lent processing method creates accounting entries to pass costs or share
revenue (the transfer price amount determines the cost or revenue amounts) between the
provider and receiver organizations. If you choose to pass costs from the provider to the
receiver, then this processing method:
• Debits the cost from the receiver (or lent) organization.
• Credits the cost account of the provider (or borrowed) organization.
Similarly, if you choose to share revenue, then this processing method:
• Debits the revenue from the receiver organization.
• Credits the revenue to the provider organization.
Oracle Project Costing provides AutoAccounting functions for borrowed and lent processing.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 12
Project and Task Setup

Project and Task Setup

To specify cross charge information for a project or a task, select the Cross Charge project or
task option. When you select the Cross Charge option at the project level, the Project
Multinational Setup window opens. When you select the Cross Charge option at the task level,
the Task Multinational Setup window opens. You can enter the following information in the
Project Multinational Setup and Task Multinational Setup windows:
• Allow Charges from Other Operating Units - Enable this check box to accept cross-
charged transactions from other operating units. At the project-level, this entry is the
default value for each new top-task that you create. At the task-level, this entry is the
default value for each new subtask that you create.
• Process Cross Charges - Optionally enable the Labor, Non-Labor, or both check boxes to
have Oracle Project Costing process labor and non-labor cross-charged transactions. If
you do not enable a check box, then Oracle Project Costing does not process cross-
charged transactions for that type of cost. If you enable a check box, then you must
specify a transfer price schedule for that selection. You can optionally specify a fixed date
to use to calculate the transfer price amount. Oracle Project Costing uses this date only if
the transfer price rule uses a calculation method based on a bill rate or burden schedule. If
you do not enter a date, then Oracle Project Costing uses the expenditure item date.
Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 13
 - At the project-level, this entry is the default value for each new top-task that you
create.
- At the task-level, this entry is the default value for each new subtask that you create.
If you assign a transfer price schedule to a lowest-level task, then Oracle Project
Costing uses that transfer price schedule to process labor or non-labor cross-charged
transactions. If you do not assign a transfer price schedule at the lowest task level,
then Oracle Project Costing uses the transfer price schedule that you assign at the
project-level.
Note: Intercompany Tax Receiving Task (project-level only) is for intercompany billing. You
can specify the task to use to collect nonrecoverable intercompany tax amounts as project
costs.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 14
Subledger Accounting Process Flow: Cross Charge

Subledger Accounting Process Flow: Cross Charge

The provider operating unit performs the following tasks:
1. Enter or import cross charge transactions - The provider operating unit enters or
imports cross charge transactions.
2. Distribute costs of cross charges - The provider operating unit distributes the costs of the
cross charges. In addition to determining the raw and burden cost amounts and the
accounting information for project transactions, the cost distribution processes also
determine the following information for cross charge transactions:
• Provider and receiver operating units and organizations
• Cross-charge type, which indicates whether a transaction is an intra-operating unit,
inter-operating unit, or intercompany cross charged transaction or not a cross charged
transaction
• Cross-charge processing method, which indicates whether a transaction is subject to
cross charge processing and which processing method to use
3. PRC: Distribute Borrowed and Lent Amounts - Calculates the borrowed and lent cross
charge amounts. The program also uses AutoAccounting to determine the default debit
account for each expenditure item.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 15
 4. PRC: Generate Cross Charge Accounting Events - Uses AutoAccounting to determine
the default credit account and then to generate accounting events. You can select Borrowed
and Lent for the Process Category parameter to run the program only for borrowed and
lent transactions.
5. PRC: Create Accounting - Creates subledger journal entries for eligible accounting
events. You can select Borrowed and Lent for the Process Category parameter to run the
program only for borrowed and lent accounting events. You can run the program in either
draft or final mode. Optionally, the program can post journal entries in Oracle General
Ledger to send journal entries to Oracle General Ledger.
6. PRC: Transfer Journal Entries to GL - When you run the program PRC: Create
Accounting, if you select No for the parameter Transfer to GL, then you run this program
to transfer final subledger accounting entries to Oracle General Ledger.
7. Journal Import (in Oracle General Ledger) - Imports the final accounting entries into
Oracle General Ledger. Either PRC: Create Accounting or PRC: Transfer Journal Entries
to GL initiates this program when you transfer final subledger accounting journal entries to
Oracle General Ledger. Optionally, you can set these programs to post journal entries in
Oracle General Ledger.
You can require the receiver operating unit to run additional customized processes to create
additional accounting entries in Oracle Subledger Accounting and transfer the accounting entries
to Oracle General Ledger. For example, your implementation team can develop customized
processes to handle organizational profit elimination to satisfy your company's accounting
practices.
In addition, the provider operating unit can adjust cross charge transactions or perform steps
resulting in the reprocessing of borrowed and lent transactions.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 16
Borrowed and Lent Accounting

Borrowed and Lent Accounting

In this example, the cost center associated with the provider organization (490) received the
initial charge for the labor, while the receiver organization received the benefits of the
resources. The borrowed and lent accounting, using transfer prices, relieved the cost for the
provider operating unit and debited the cost center associated with the receiver operating unit
(422).

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 17
Cross Charge Adjustments

Cross Charge Adjustments

In the Expenditure Items window or Project Expenditure Items window:
• Marking for cross charge reprocessing - You can mark one or more expenditure items for
cross charge reprocessing in the Expenditure Items window or the Project Expenditure Items
window. To do this, choose the Reprocess Cross Charge option from the Tools menu. The
next time you run the programs to process cross charges, the programs process these
transactions as new cross charged transactions. Marking a transaction for cross charge
reprocessing:
• Resets the cross charge type to Null.
• Resets the cross charge processing method to Pending.
• Resets the cross charge processing status to Never Processed.
• Resets the transfer price amount in all currencies to Null.
• Re-determines the cross charge type and processing method.
• Marking transactions to skip cross charge processing - You can mark one or more
expenditure items so that the cross charge programs skip them. To do this, choose Mark For
No Cross Charge Processing from the Tools menu. Marking a transaction as not requiring

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 18
 cross charge processing resets the cross charge processing method to No Cross Charge
Processing and the cross charge processing status to Never Processed.
• Changing transfer price conversion attributes - You can reconvert transfer price amounts
from the transaction currency if you change the transfer price exchange rate date type and
exchange rate type, which govern how Oracle Project Costing converts the transfer price
amount from the transaction currency to the functional currency. To do this, you choose the
Change Transfer Price Functional Currency Attributes option from the Reports menu.
• Changing transfer price base amounts - If you recalculate raw or burdened cost, then the
amount of the transfer price basis (and the final transfer price amount) of a cross charged
transaction can also change. The respective cost distribution processes determines whether
such recalculations affect the transfer price amount of any cross charged transactions and
automatically mark the transactions for cross charge reprocessing. The cost distribution
programs automatically reset the cross charge processing status to Never Processed and
blanks out the transaction’s transfer price amount.
• Performing transfers and split - Transferring or splitting a cross charged transaction does
not affect the cross charge processing method of the existing transactions. The reversing and
new transactions undergo the cross charge processing as usual.
In addition, if you change and recompile a burden schedule that Oracle Project Costing used to
determine the transfer price of some items, then the recompile program marks these items for
cross charge reprocessing. The program resets the cross charge type to Null, the cross charge
processing method to Pending, and the cross charge processing status to Never Processed.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 19
Processing Cross Charge Adjustments

Processing Cross Charge Adjustments

Oracle Project Costing processes adjustments similarly to the original transactions. PRC:
Distribute Borrowed and Lent Amounts performs the following steps:
• Recalculates the transfer price if no transfer price amount exists in transaction currency.
• Reconverts the transfer price amount from the transaction currency to functional currency
if an amount exists in transaction currency but not the functional currency.
After it completes the common processing steps for cross charge adjustments, the program:
• Regenerates accounting entries - If any accounts for which you already generated cross
charge accounting events changed, then the program reverses the original cross charge
distributions and creates new ones. The program also determines the PA dates for the
reversing and new distributions. If you did not generate cross charge accounting events for
the original accounting entries, and the accounts or amounts changed, then the program
replaces them with new entries.
• Reverse existing distributions if processing method has changed - If the cross charge
processing method for the transaction changes from borrowed and lent to intercompany
billing or no cross charge processing, then the program reverses existing entries for which
you already generated cross charge accounting events.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 20
 Note: If the adjustment has an impact on the accounting, then you must run the programs PRC:
Generate Cross Charge Accounting Events and PRC: Create Accounting to process the
adjustment accounting. You can select the process category Borrowed and Lent for both
programs to restrict the processing to only borrowed and lent accounting events.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 21
Practice - Set Cross Charge Attributes for a Project
Overview
In this practice, you will set cross charge attributes for your XX Capital Services project.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Set Cross Charge Attributes at the Project Level

Resources owned by another operating unit, Vision Services R&D, will perform work on your
XX Capital Services project. Enable your project to receive cross charges from other operating
units. Set up the project to use the Global TP Schedule to determine the transfer prices for both
labor and non-labor cross charges.

Set Cross Charge Attributes at the Task Level

Allow resources from other operating units to charge only task 1.1. Set up task 1.1 to use the
Global TP Schedule to determine the transfer prices for both labor and non-labor cross charges.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 22
Solution - Set Cross Charge Attributes for a Project
Set Cross Charge Attributes at the Project Level

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Projects window.

• (N) Projects

3. Find your capital services project.

• Enter the find criteria:

− Number = XXCS
− Name = XX Capital Services

• (B) Find

4. Select the XX Capital Services project on the Projects, Templates Summary window.

5. (B) Open

6. In the Options region, select Cross Charge.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 23
7. (B) Detail

8. Set the Cross Charge attributes for the project as specified in the following table:

Field Value
Allow Charges from other Operating Units Yes (enable check box)
Process Cross Charge For Labor Yes (enable check box)
Transfer Price Schedule: Labor Global TP Schedule
Fixed Date: Labor Leave Blank
Process Cross Charge For Non-Labor Yes (enable check box)
Transfer Price Schedule: Non-Labor Global TP Schedule
Fixed Date: Non-Labor Leave Blank
Intercompany Tax Receiving Task Leave Blank

9. (I) Save

10. Close the Project Multinational Setup window and return to the Projects, Templates
window.

Set Cross Charge Attributes at the Task Level

11. In the Options region, select Tasks

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 24
12. (B) Detail

13. Double-click task 1.0 to show the subtasks.

14. Select Task 1.1.

15. (B) Options

16. Double-click the Cross Charge option in the Task Options window.

17. Set the Cross Charge attributes for the task 1.1 as specified in the following table:

Field Value
Allow Charges from other Operating Units Yes (enable check box)
Process Cross Charge For Labor Yes (enable check box)
Transfer Price Schedule: Labor Global TP Schedule
Fixed Date: Labor Leave Blank
Process Cross Charge For Non-Labor Yes (enable check box)
Transfer Price Schedule: Non-Labor Global TP Schedule
Fixed Date: Non-Labor Leave Blank

18. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 25
19. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 26
Practice - Create and Process Cross Charges
Overview
In this practice, you will enter and process a cross-charged expenditure.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Enter Cross Charges in an Expenditure Batch

You are now in the role of Austin Sanders, a resource from Vision Services R&D. Log in as
ASANDERS with the password of WELCOME and select the Projects, Vision Services R&D
(USA) responsibility.

Enter a usage expenditure batch for the current week. Enter the header information as specified
in the following table:

Field Value
Operating Unit Vision Services R&D
Batch Name XXCROSSCHARGE
Ending Date This Sunday's Date
Class Usages
Description Usages
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Option Not Available

Enter expenditure items for Austin Sanders as specified in the following tables:

Expnd Item Project Number Task Expnd Non-Labor Non-Labor

Date Number Type Resource Org
Yesterday's Date XXCS 1.1 Computers Personal Information
Services

Work Type UOM Quantity Comment

Internal - capital Hours 15 Computer use

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 27
Submit and release the batch.

Distribute Usage Costs

Submit the concurrent program PRC: Distribute Usage and Miscellaneous Costs for your
XXCROSSCHARGE expenditure batch. Review the output report.

Note your Request ID __________________________

Distribute Total Burdened Costs

Submit the concurrent program PRC: Distribute Total Burdened Costs for your
XXCROSSCHARGE expenditure batch. Review the output report.

Note your Request ID __________________________

Distribute Borrowed and Lent Amounts

Submit the concurrent program PRC: Distribute Borrowed and Lent Amounts. Define the
parameters for the program as specified in the following table:

Field Value
Expenditure Group XXCROSSCHARGE
Through Date This Sunday's Date
Receiver Operating Unit Vision Services
From Project Number XXCS
To Project Number XXCS
Generate Report Yes

The program PRC: Distribute Borrowed and Lent Amounts automatically submits the program
PRC: Borrowed and Lent Amounts Distribution Report. Review the output report for PRC:
Borrowed and Lent Amounts Distribution Report.

Note your Request ID __________________________

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 28
Solution - Create and Process Cross Charges
Enter Cross Charges in an Expenditure Batch

1. Log out

2. Log in as Austin Sanders.

Field Value
User Name ASANDERS
Password WELCOME

3. Responsibility = Projects, Vision Services R&D (USA)

4. Navigate to the Expenditure Batches window.

• (N) Expenditures > Pre Approved Batches > Enter

5. Enter the batch information as specified in the following table:

Field Value
Operating Unit Vision Services R&D
Batch Name XXCROSSCHARGE
Ending Date This Sunday's Date
Class Usages
Description Usages
All Negative Transactions Entered As Unmatched Leave Blank
Reverse Expenditures in a Future Period Option Not Available

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 29
6. (I) Save

7. (B) Expenditures

8. Enter the expenditure as specified in the following table:

Employee Name Employee Organization Expnd Ending Control Total

Number Date
Sanders, Austin 230 Engineering This Sunday's Date Leave Blank
R+D

9. (I) Save

10. Enter an expenditure item for Austin Sanders as specified in the following tables:

Expnd Item Project Number Task Expnd Non-Labor Non-Labor

Date Number Type Resource Org
Yesterday's Date XXCS 1.1 Computers Personal Information
Services

Work Type UOM Quantity Comment

Internal - capital Hours 15 Computer use

11. (I) Save

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 30
12. Close the Expenditures window and return to the Expenditure Batches window.

13. (B) Submit

14. (B) Release

15. Close the Expenditure Batches window and return to the Navigator.

Distribute Usage Costs

16. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

17. Select to run a Single Request.

18. (B) OK

19. Select the program PRC: Distribute Usage and Miscellaneous Costs from the list of values
in the Name field and Vision Services R&D for the operating unit.

20. Define the parameters for the program as specified in the following table:

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 31
 Field Value
Expenditure Batch XXCROSSCHARGE

21. (B) OK

22. (B) Submit

• Note your Request ID __________________________

23. (B) No in the Decision dialog box

24. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

25. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

26. Review the output report.

• (B) View Output

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 32
27. Close the output page when finished.

Distribute Total Burdened Costs

28. (B) Submit a New Request

29. Select to run a Single Request.

30. (B) OK

31. Select the program PRC: Distribute Total Burdened Costs from the list of values in the
Name field and Vision Services R&D for the operating unit.

32. Define the parameters for the program as specified in the following table:

Field Value
Expenditure Batch XXCROSSCHARGE

33. (B) OK

34. (B) Submit

• Note your Request ID __________________________

35. (B) No in the Decision dialog box

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 33
36. Find your request.

• Select the Specific Requests option button.

• Enter your request ID in the Request ID field.

• (B) Find

37. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

38. Review the output report.

• (B) View Output

39. Close the output page when finished.

Distribute Borrowed and Lent Amounts

40. (B) Submit a New Request

41. Select to run a Single Request.

42. (B) OK

43. Select the program PRC: Distribute Borrowed and Lent Amounts from the list of values in
the Name field and Vision Services R&D for the operating unit.

44. Define the parameters for the program as specified in the following table:

Field Value
Expenditure Group XXCROSSCHARGE
Through Date This Sunday's Date
Receiver Operating Unit Vision Services
From Project Number XXCS
To Project Number XXCS
Generate Report Yes

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 34
45. (B) OK

46. (B) Submit

• Note your Request ID __________________________

47. (B) No in the Decision dialog box

48. 48. Find your request.

• Select the All My Requests option button.

• (B) Find

49. Wait for the program to finish. When the program is complete, select the program.

• Use (B) Refresh Data to monitor the progress of the request processing.

Note: Wait for the program with your Request ID to complete. The program PRC:
Distribute Borrowed and Lent Amounts automatically submits the program PRC:
Borrowed and Lent Amounts Distribution Report. Look for the PRC: Borrowed and
Lent Amounts Distribution Report program request with your Request ID in the
parameters.

50. Review the output report for PRC: Borrowed and Lent Amounts Distribution Report.

• (B) View Output

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 35
51. Close the output page and open windows and return to the Navigator.

The instructor will complete the processing for your costs and cross charges in the next
demonstration.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 36
Guided Demonstration - Complete Cross Charge Processing
The instructor will complete the processing for the costs and cross charges for the entire class.

Generate Cost Accounting Events

1. Log in as Austin Sanders.

Field Value
User Name ASANDERS
Password WELCOME

2. Responsibility = Projects, Vision Services R&D (USA)

3. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

4. Select to run a Single Request.

5. (B) OK

6. Select the program PRC: Generate Cost Accounting Events from the list of values in the
Name field and Vision Services R&D for the operating unit.

7. Leave all the parameters blank. The program will generate cost accounting events for all
process categories.

8. (B) OK

9. (B) Submit

10. (B) No in the Decision dialog box

11. Find your request.

• Select the All My Requests option button.

• (B) Find

12. Wait for the program to finish.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 37
 • (B) View Output

13. Close the output report page.

Generate Cross Charge Accounting Events

14. (B) Submit a New Request

15. Select to run a Single Request.

16. (B) OK

17. Select the program PRC: Generate Cross Charge Accounting Events from the list of values
in the Name field and Vision Services R&D for the operating unit.

18. Define the parameters for the program as specified in the following table:

Field Value
Process Category Borrowed and Lent
End GL Date Sunday of the current week
Generate Report Yes

19. (B) OK

20. (B) Submit

21. (B) No in the Decision dialog box

22. Find your request.

• Select the All My Requests option button.

• (B) Find

23. Wait for the program to finish.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

• (B) View Output

24. Close the output report page.

Create Accounting

25. (B) Submit a New Request

26. Select to run a Single Request.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 38
27. (B) OK

28. Select the program PRC: Create Accounting from the list of values in the Name field and
Vision Services R&D for the operating unit.

29. Define the parameters for the program as specified in the following table:

Field Value
Process Category Leave Blank (program will process accounting
events for all process categories)
End Date Sunday of the current week
Mode Final
Errors Only No
Report Summary
Transfer to General Ledger Yes
Post in General Ledger Yes
General Ledger Batch Name Leave Blank
Include User Transaction Identifiers No

30. (B) OK

31. (B) Submit

32. (B) No in the Decision dialog box

33. Find your request.

• Select the All My Requests option button.

• (B) Find

34. Wait for the programs to finish.

The following programs run during create accounting processing:

− PRC: Create Accounting
− Accounting Program
− Journal Import
− Posting: Single Ledger
− Subledger Accounting Balances Update

• Use (B) Refresh Data to monitor the progress of the request processing.

35. Close open windows and return to the Navigator when finished.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 39
Practice - Review Cross Charges
Overview
In this practice, you will review your cross-charged expenditure item in expenditure inquiry.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks

Review Cross-Charged Expenditure Item in Expenditure Inquiry

As Austin Sanders, use the responsibility Projects, Vision Services R&D (USA) and query the
cross-charged expenditure item in Expenditure Inquiry (All). Use folder tools to show the
following fields on the Expenditure Items window:
− Cross Charge Proc Method
− Cross Charge Type
− Transfer Proc Project Functional Amount

View the accounting for the expenditure item.

Perform an analysis to answer the following question:

How did Oracle Projects calculate the borrowed and lent amount?

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 40
Solution - Review Cross Charges
Review Cross-Charged Expenditure Item in Expenditure Inquiry
1. Responsibility = Projects, Vision Services R&D (USA)

Note: You are still logged in as ASANDERS.

2. Navigate to the Find Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > All

3. Query the expenditure items from the XXCROSSCHARGE expenditure batch.

• Enter the header find criteria::

− Operating Unit = Vision Services R&D

• (T) Expenditure

• Enter expenditure find criteria:

− Expenditure Batch = XXCROSSCHARGE

• (B) Find

4. Show additional fields:

• (M) Folder > Show Field...

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 41
 • Select Transfer Price Project Functional Amount

• (B) OK

• Repeat the steps to show the following additional fields:

− Cross Charge Proc Method
− Cross Charge Type

Question: How did Oracle Projects calculate the borrowed and lent amount?

Answer: The program PRC: Distribute Borrowed and Lent Amounts used the Global
TP Schedule transfer price schedule that you assigned to task 1.1 for non-labor costs.
This transfer price schedule uses the Expenses - Cost+50% transfer price rule. This rule
marks up the burdened cost 150% to determine the transfer price amount for non-labor
costs.

5. View accounting for the expenditure item.

• Select the expenditure item.

• (M) Tools > View Accounting

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 42
6. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 43
Agenda

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 44
Borrowed and Lent Cross Charge Processing Implementation
Steps

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 45
Transfer Price Rules

Transfer Price Rules

In Oracle Project Costing, transfer price refers to the price that two organizations agree upon
for cross charge purposes. Define transfer price rules to determine how Oracle Project Costing
calculates the transfer price for cross charged transactions. You can base the calculations based
on:
• Transfer price basis - Base your transfer price on a cross charged transaction’s raw cost,
burdened cost, or revenue.
• Cross-charge calculation method - You can optionally perform an additional calculation
and apply a markup or discount to the amount from the transfer price basis.
Oracle Project Costing automatically converts transfer price amounts to the functional currency
of the provider operating unit using the transfer price currency conversion attributes defined in
that operating unit. You can use the Transfer Price Currency Conversion Override Extension to
adjust these conversion attributes.
You can process transfer price based on revenue amounts for cross-charged transactions
independent of revenue generation. Oracle Project Costing calculates the revenue of the
receiver project as part of transfer price calculation even if the revenue is not generated in the
receiver operating unit. The cost transaction does not have to be billable. You can use the

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 46
 potential revenue amount as a basis and apply a transfer price markup percentage even when
the cost transaction is not billable from the receiver project's perspective.
To define a transfer price rule:
1. Enter a unique name for the rule.
2. Select a type (Labor or Non–Labor).
3. Specify a description and the effective dates.
4. For Basis, select Raw Cost, Burdened Cost, or Revenue.
5. Select one of the calculation methods to determine the transfer price:
- Basis - Use the transfer price with no further adjustments.
- Burden Schedule - Specify the name of an existing burden schedule to apply to the
basis.
- Bill Rate Schedule - For Operating Unit, specify the name of the operating that owns
the bill rate schedule that you want to use. For Schedule, specify a bill rate schedule
to apply to the basis.
6. In the Apply field, enter a percentage (zero or any positive number).
- The percentage is the amount of a markup or discount to the transfer price amount
calculated by the rule. Numbers less than 100 indicate a discount, and numbers
greater than 100 indicate a markup.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 47
Practice - Define Transfer Price Rules
Overview
In this practice, you will define a labor and a non-labor transfer price rule.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define Transfer Price Rules

Log in as SERVICES with the password of WELCOME and select the Projects, Vision Services
(USA) responsibility.

You are implementing borrowed and lent cross charge at your company. Define two transfer
price rules to use in your transfer price schedule that meet the following requirements:

• For labor cost - transfer price equals 100% of the raw cost. Name the rule XXLabor at
Raw Cost.

• For non-labor cost - transfer price equals 100% of the burdened cost. Name the rule
XXNon-Labor at Burdened Cost.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 48
Solution - Define Transfer Price Rules
Define Transfer Price Rules

1. Log out

2. Log in as SERVICES.

Field Value
User Name SERVICES
Password WELCOME

3. Responsibility = Projects, Vision Services (USA)

4. Navigate to the Transfer Price Rules window.

• (N) Setup > Costing > Cross Charge > Transfer Price Rules

5. Enter a transfer labor transfer price rule as specified in the following table:

Field Value
Name XXLabor at Raw Cost
Type Labor
Effective Dates From Today's Date
Effective Dates To Leave Blank
Description Enter a brief description
Basis Raw Cost
Use Basis
Apply 100%

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 49
6. (I) Save

7. (I) New

8. Enter a non-labor transfer price rule as specified in the following table:

Field Value
Name XXNon-Labor at Burdened Cost
Type Non-Labor
Effective Dates From Today's Date
Effective Dates To Leave Blank
Description Enter a brief description
Basis Burdened Cost
Use Basis
Apply 100%

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 50
9. (I) Save

10. Close the Transfer Price Rules window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 51
Transfer Price Schedule

Transfer Price Schedule

A transfer price schedule is a list of transfer price rules. In the simplest transfer price schedule,
an enterprise has a single transfer price rule that every provider and receiver organization pair
follows. Oracle Project Costing supports more complex schedules so different pairs of provider
and receiver organizations can negotiate their own transfer price rules. You can also define a
schedule with one rule that applies to cross charges to a particular organization and another
rule for cross charges to all other organizations. You can define one transfer price schedule
consisting of different rules for different organization pairs or multiple schedules consisting of
different rules for the same pair of organizations.
When defining transfer price schedule lines, you can use the amount type classification to
assign different rules for revenue sharing and cost reimbursement agreements. As Oracle
Project Costing processes cross charge transaction, it uses the work type attribute to classify
each transaction as cost or revenue, and therefore, to determine the schedule line to use when it
calculates the transfer price.
Oracle Project Costing uses the labor or non-labor transfer price schedule that you specified for
the lowest-level task to which you charged the transaction. If you do not assign a transfer price
schedule at the lowest task level, then Oracle Project Costing uses the transfer price schedule
that you assign at the project-level.
Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 52
 To define a transfer price schedule:
1. Enter a unique name for the schedule
2. Select a type (Labor or Non-Labor).
3. Specify a description and the effective dates.
4. Enter the schedule lines:
- Line Num - Enter a number greater than zero to specify the display order for the
lines.
- Provider - Choose any organization, parent organization, operating unit, legal entity,
or business group.
- Receiver (Optional) - Choose any organization, parent organization, operating unit,
legal entity, or business group. If you leave this field blank, then this transfer price
schedule applies to any receiver organization receiving transactions from the
specified provider organization.
- Labor Rule and Non Labor Rule - For Labor Rule, choose a valid transfer type rule
with a type of Labor for this provider and receiver organization pair. For Non Labor
Rule, choose a rule with a type of Non Labor. You must specify at least one transfer
price rule (labor, non-labor, or both) for each schedule line.
- Apply % - One Apply % field applies to labor rules, the other to non-labor rules.
Enter a percentage (zero or any positive number). The percentage is a markup or
discount to the transfer price amount calculated by the rule. Numbers less than 100
indicate a discount, and numbers greater than 100 indicate a markup.
- Transfer Price Amount Type - Select one of the following:
- Cost and Revenue - The schedule line applies to all cross charge transactions.
- Cost Transfer - The schedule line is applied to transactions when the assigned
work type has an amount type of Cost.
- Revenue Transfer - The schedule line is applied to transactions when the
assigned work type has an amount type of Revenue.
- Effective Dates - Enter effective dates for this schedule line.
- Default - Choose one schedule line to be a default for this schedule. Oracle Project
Costing uses the rule associated with this line to derive the transfer price if none of
the other lines match your transaction. Oracle Project Costing does not require that a
transfer price schedule line be identified as the default line, however, it does issue an
error message if it cannot determine a rule to apply to a transaction.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 53
Practice - Define a Transfer Price Schedule
Overview
In this practice, you will define a transfer price schedule.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Define a Transfer Price Schedule

You can use the transfer price rules that you defined in the previous practices to define a transfer
price schedule. Name the new transfer price schedule XXServices East/West Schedule.

The organizations Services-East and Services-West have agreed to share resources for certain
projects. They will transfer costs based on the XXLabor at Raw Cost and XXNon-Labor at
Burdened Cost transfer price rules that you defined.

Define two lines on the transfer price schedule and assign your transfer price rules. Use an apply
percentage of 100 percent (no discount or markup). For the first line, assign the rules for when
Services-East provides the resources and Services-West receives the benefit of the resources. For
the second line, reverse the relationship between the organizations.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 54
Solution - Define a Transfer Price Schedule
Define a Transfer Price Schedule

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Transfer Price Schedules window.

• (N) Setup > Costing > Cross Charge > Transfer Price Schedules

3. Enter the transfer price schedule header information as specified in the following table:

Field Value
Name XXServices East/West Schedule
Effective Dates From Today's Date
Effective Dates To Leave Blank
Description Enter a brief description

4. Enter the schedule lines as specified in the following tables:

Line Num Provider Receiver Labor Rule Apply %

10 Services-East Services-West XXLabor at Raw Cost 100
20 Services-West Services-East XXLabor at Raw Cost 100

Non-Labor Rule Apply % Transfer Price Effective Effective Default

Amount Type Date From Date To
XX-Non-Labor at 100 Cost Transfer Today's Date Leave No
Burdened Cost Blank
XX-Non-Labor at 100 Cost Transfer Today's Date Leave No
Burdened Cost Blank

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 55
5. (I) Save

6. Close the Transfer Price Schedules window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 56
Cross Charge Implementation Options

Cross Charge Implementation Options

1. Enter the exchange rate date type and the exchange rate type that Oracle Project Costing
uses to convert the transfer price amount to the functional currency of the provider
operating unit.
2. Select a method for processing cross charges within an operating unit:
- None
- Borrowed and Lent
3. To allow cross charges to all operating units within a legal entity, enable the check box,
and then choose a default processing method for this type of transaction:
- None
- Borrowed and Lent

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 57
Provider and Receiver Controls for Borrowed and Lent
Accounting

Provider and Receiver Controls for Borrowed and Lent Accounting

1. Select the operating unit that owns the controls.
2. Enter the operating unit that can receive cross charges from the current operating unit.
3. Enable Allow Cross Charge check box to allow cross charges to this operating unit.
- This value overrides the Allow Cross Charges To All Operating Units Within Legal
Entity option. Changes to the check box affect future cross charges to this receiver
operating unit.
4. For Processing Method, select the cross charge processing method to use for transactions
charged to this receiver operating unit. You can choose:
- Borrowed and Lent only if the receiver operating unit and provider operating unit are
in the same legal entity.
- Intercompany Billing only if you have identified the operating unit as a receiver for
internal billing.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 58
AutoAccounting Rules for Borrowed and Lent Transactions

AutoAccounting Rules for Borrowed and Lent Transactions

Define AutoAccounting rules for borrowed and lent cross charges in each provider operating
unit. Use the Borrowed Account and Lent Account AutoAccounting functions to select the
appropriate intercompany borrowed and lent accounts.
You can optionally set up Oracle Subledger Accounting to overwrite the default borrowed and
lent accounts, or individual segments of the accounts, that Oracle Project Costing derives using
AutoAccounting rules.
For additional discussion, see the lesson titled “Accounting for Costs.”

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 59
Implement Cross Charge Extensions

Implement Cross Charge Extensions

• Provider and Receiver Organizations Override Extension - Use this extension to enforce
cross-charge rules at a higher level in the organization hierarchy than the level at which you
assign resources and projects. This extension provides a single place for you to enforce and
maintain your business rules in all organizations in your enterprise.
• Cross Charge Processing Method Override Extension - Use this extension to have custom
business rules that help you identify how to process cross-charged transactions. For example
you can exclude certain cross-charged transactions from cross-charge processing or you can
change the cross-charge method.
• Transfer Price Determination Extension - Use this extension to specify a transfer price for
transactions. If this extension returns a valid value for the transfer price, then Oracle Project
Costing uses that value as the transfer price instead of computing the transfer price.
• Transfer Price Override Extension - Use this extension to override the transfer price for a
transaction.
• Transfer Price Currency Conversion Override Extension - Use this extension to override
the default attributes that Oracle Project Costing uses to convert the transfer price from the
transaction currency to the functional currency.

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 60
Summary

Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 61
 Copyright © 2007, Oracle. All rights reserved.

Cross Charge
Chapter 17 - Page 62
 Appendix A: Integration with
Oracle Inventory, Project
Manufacturing, and Asset
Tracking
Chapter 18

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 2
Appendix A: Integration with Oracle Inventory, Project
Manufacturing, and Asset Tracking

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 5
Integration with Oracle Inventory

Integration with Oracle Inventory

Oracle Project Costing fully integrates with Oracle Inventory to enable you to enter inventory
transactions in Oracle Inventory and transfer them to Oracle Project Costing. You can order
and receive items into inventory before assigning them to a project. You can then assign the
items to a project as they are taken out of or received into Oracle Inventory.
When you enter project-related transactions in Oracle Inventory, you enter the project
information on the source transaction. Oracle Inventory and Oracle Project Costing carry the
project information through from the Issue To or Receipt From transaction in Oracle Inventory
to the project expenditure in Oracle Project Costing.
If you integrate with Oracle Inventory, you can use function security to prevent users from
manually entering preapproved batch items in Oracle Project Costing with an expenditure type
class of Inventory.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 6
Integration with Oracle Inventory Flow

Integration with Oracle Inventory Flow

In a non-manufacturing environment, you enter issues and receipts into Oracle Inventory. After
you process costs, these transactions become costed transactions. Next, run the Cost Collector.
You can initiate the Cost Collector from the Project Cost Transfers window in Oracle
Inventory to collect and then transfer costs to Oracle Projects. Next, in Oracle Projects, run the
program PRC: Transaction Import for the transaction source Inventory Misc to create
expenditures in Oracle Projects. If the import program rejects any transactions, then you can
review and correct them using the Review Transactions window. After you correct the
transactions, resubmit the PRC: Transaction Import program. The program imports the
transactions into Oracle Project Costing as accounted and costed.
You cannot perform adjustments on expenditure items from Oracle Inventory in Oracle Project
Costing that impact the raw cost accounting for the expenditure item. The Allow Adjustments
transaction source option is disabled for the transaction source Inventory Misc.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 7
Miscellaneous Transactions

Miscellaneous Transactions
To enter a miscellaneous transaction in Oracle Inventory:
1. Enter the date and time (or accept default values).
- The transaction date becomes the expenditure item date.
2. Select a project-enabled transaction type in the Type field.
3. Enter the following required information:
- Item
- Subinventory
- Unit of Measure
- Quantity
- Account
- Source Project
- Source Task Expenditure Type
- Expenditure Organization
4. Save

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 8
Practice - Enter a Miscellaneous Transaction
Overview
In this practice, you will enter a Miscellaneous Transaction in Oracle Inventory using a project-
enabled transaction type.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
Enter a Miscellaneous Transaction

Use the responsibility Inventory, Vision Services (USA) to enter a miscellaneous transaction for
your XX Capital Services project. When you access the Miscellaneous Transactions window for
the first time, select Vision Services as the organization.

Create a non-serial-triggered Receipt From miscellaneous transaction and enter the transaction
line information as specified in the following table:

Field Value
Item f75000
Subinventory Common
UOM Ea
Quantity 1
Account 01-000-1410-000
Source Project XXCS
Source Task 3.0
Expenditure Type Material
Expenditure Org Services-East

Save the miscellaneous transaction when you are finished entering the line. The instructor will
process your miscellaneous transaction in the next guided demonstration.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 9
Solution - Enter a Miscellaneous Transaction
Enter a Miscellaneous Transaction

1. Responsibility = Inventory, Vision Services (USA)

2. Navigate to the Find Expenditure Items window.

• (N) Transactions > Miscellaneous Transaction

3. Select Vision Services as the organization.

4. (B) OK

5. Enter the miscellaneous transaction information as specified in the following table:

Field Value
Date Accept Default Value
Type Receipt From
Source Leave Blank
Account Leave Blank
Serial-Triggered No

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 10
6. (B) Transaction Lines

7. Enter the Receipt From information as specified in the following table:

Field Value
Item f75000
Subinventory Common
UOM Ea
Quantity 1
Account 01-000-1410-000
Source Project XXCS
Source Task 3.0
Expenditure Type Material
Expenditure Org Services-East

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 11
8. (I) Save

9. Close the Receipt From window and return to the Navigator.

The instructor will process your miscellaneous transaction in the next guided demonstration.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 12
Launching Transaction Managers

Launching Transaction Managers

After you enter project-related inventory transactions in Oracle Inventory, the next step is to
cost the transactions. You start the material cost transaction manager to cost material
transactions. This manager processes costs for all material transactions. For details, see the
Oracle Inventory User's Guide.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 13
Transfer and Import

Transfer and Import

The next step in moving the transactions to Oracle Project Costing is to run the Project Cost
Collector in Oracle Inventory. The Project Cost Collector collects the organization's project-
related costs and passes these costs by project, task, and expenditure type to the Transaction
Import Interface table in Oracle Project Costing. You can then import these transactions into
Oracle Projects. The total Inventory Cost becomes the Raw Cost in Oracle Projects. Use the
Project Cost Transfers window to submit the Project Cost Collector program and then run the
program PRC: Transaction Import for the transaction source Inventory Misc in Oracle Project
Costing to import the transactions from the interface table.
In Oracle Project Costing, you can optionally run the request set PRC: Interface Miscellaneous
Inventory Costs from Oracle Inventory to both collect costs and import transactions. This
request set runs the following programs:
• Projects Cost Collection Manager - In the parameters, enter the Organization ID and the
Number of Days to Leave Costs Uncollected. The program transfers the amount and
quantities of the inventory transactions to the Transaction Import interface table.
• PRC: Transaction Import - The program imports the transactions as costed and
accounted.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 14
Guided Demonstration - Process Miscellaneous Transactions
In this demonstration, the instructor will process the miscellaneous transactions for the entire
class.

Cost Inventory Transactions

1. Log in as SERVICES.

Field Value
User Name SERVICES
Password WELCOME

2. Responsibility = Inventory, Vision Services (USA)

3. Navigate to the Interface Managers window

• (N) Setup > Transactions > Interface Managers

• If necessary, select Vision Services in the Organizations window.

4. Position your cursor in the Cost Manager row.

5. (M) Tools > Launch Manager

If you receive a message that the manager is already active, then click the OK button.

6. (B) Submit

7. (B) OK

8. Close the open windows and return to the Navigator.

Transfer Costs to Oracle Project Costing

9. Navigate to the Project Cost Transfers window.

• (N) Accounting Close Cycle > Project Cost Transfers

10. Enter 0 in the Number of Days to Leave Costs Uncollected field in the Parameters window.

11. (B) OK

12. (B) Submit

13. (B) No

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 15
14. Monitor the program.

• (M) View > Requests

• Select the All My Requests option button.

• (B) Find

• Wait for the Cost Collection Manager program to complete.

• Close the Requests window and return to the Navigator when finished.

Import Inventory Transactions

15. Switch your responsibility

• (M) File > Switch Responsibility

• Select Projects, Vision Services (USA)

• (B) OK

16. Navigate to the Submit Request window for Transaction Import.

• (N) Expenditures > Transaction Import > Import Transactions

17. Define the parameters for the program PRC: Transaction Import as specified in the
following table:

Field Value
Transaction Source Inventory Misc
Batch Name Select the batch name that is
available on the list of value.

If no batch name is available, then return to Oracle Inventory and perform the step to
transfer the cost to Oracle Project Costing again. The Cost Manager must complete
processing before you can run the program to transfer costs to Oracle Project Costing.

18. (B) OK

19. (B) Submit

20. (B) No in the Decision dialog box

21. Find your request.

• (M) View > Requests

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 16
 • Select the All My Requests option button.

• (B) Find

22. Wait for the programs to finish.

• Use (B) Refresh Data to monitor the progress of the request processing. When the Phase
shows Completed, open the output report.

23. (B) View Output

24. Review the output report.

You will see an expenditure group listed under the transaction source Inventory Misc on the
second page of the report.

25. Close the report page and open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 17
Practice - View Inventory Expenditure Items
Overview
In this practice, you will use Expenditure Inquiry (project) in Oracle Project Costing to view the
expenditure item imported from Oracle Inventory.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Tasks
View Inventory Expenditure Items

Use Expenditure Inquiry (project) to view the expenditure item for the Receipt From
miscellaneous transaction on your XX Capital Services project. Specify the transaction source
Inventory Misc in your query criteria. Review the cost distribution lines for the expenditure item.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 18
Solution - View Inventory Expenditure Items
View Inventory Expenditure Items

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Expenditure Items window

• (N) Expenditures > Expenditure Inquiry > Project

3. Query all expenditure items for the class.

• Enter the header find criteria:

− Project Number = XXCS
− Project Name = XX Capital Services

• (T) Expenditure

• Enter supplier find criteria:

− Transaction Source = Inventory Misc

• (B) Find

4. Review the cost distribution lines for the expenditure item.

• (B) Item Details

• Select Cost Distribution Lines

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 19
 • (B) OK

5. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 20
Agenda

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 21
Oracle Inventory Integration Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 22
Install and Implement Oracle Inventory

Install and Implement Oracle Inventory

For details regarding how to install and setup Oracle Inventory, see the Oracle Inventory
User’s Guide.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 23
Enable Project Cost Collection

Enable Project Cost Collection

To collect project-related costs in Oracle Inventory, you need to enable project cost collection
for each organization:
In Oracle Inventory: (N) Setup > Organizations > Parameters
• Select the Costing Information Tab
• Enable the Project Cost Collect. Enabled check box.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 24
Create a Project-Enabled Transaction Type

Create a Project-Enabled Transaction Type

Terminology associated with transaction types:
• Transaction Source Type - A type of entity against which Oracle Inventory charges a
transaction. Along with a transaction action, it uniquely identifies the type of transaction
you perform. Select a transaction source type of either Inventory or Move Order from the
list of values.
• Transaction Action - A generic type of material movement or cost update with no
specificity regarding the source of the transaction. Along with a transaction source type, a
transaction action identifies a transaction type. When defining project-enabled transaction
types with a transaction source type of Inventory, you can select either Receipt into stores
or Issue from stores as the transaction action. You can set up a separate transaction type
for each action. For project-enabled transaction types with a transaction source type of
Move Order, select Issue from stores as the transaction action.
• Transaction Type – The combination of a transaction source type and a transaction
action. It is used to classify a particular transaction for reporting and querying purposes.
Use the Transaction Types window to define additional transaction types to customize
transaction entry. A user-defined transaction type is a combination of a user-defined

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 25
 transaction source type and a predefined transaction action. Oracle Inventory provides
transaction reporting and querying capabilities by transaction type.
Only user-defined transaction types can be project-enabled.
To create a user-defined transaction type:
In Oracle Inventory: (N) Setup > Transaction > Types
1. Select the User Defined tabbed region.
2. Enter a unique name for the transaction type.
3. Enter a transaction source type.
4. Select a transaction action.
5. Enable the Project check box.
6. Save your work.
To make a user-defined transaction type inactive:
Enter the date on which the transaction type becomes inactive. As of this date, you can no
longer use the transaction type in a transaction.
To enable Shortage Alerts and Shortage Notifications:
You can choose to receive an online shortage alert, a workflow-based notification, or both for
user-defined transaction types. For project-enabled transaction types, you can enable the alerts
and notifications for transaction types that have a transaction action of Receipt into stores.
Enable the check boxes to select which transaction action types will generate material shortage
alerts and notifications.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 26
Guided Demonstration - Create a Project-Enabled Transaction
Type
Create a Project-Enabled Transaction Type

1. Responsibility = Inventory, Vision Services (USA)

2. Navigate to the Transaction Types window.

• (N) Setup > Transactions > Types

• (T) User

3. (I) New

4. Enter the Transaction Type information as specified in the following table:

Field Value
Name XXProject Issue
Description Issue to Project
Source Type Inventory
Action Issue from stores
Project Yes (enable check box)
Shortage Message Online No
Shortage Message Notification No
Status Control No
Location Required No
Inactive On Leave Blank

5. (I) Save

6. Close the Transaction Types window and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 27
Create an Inventory Expenditure Type

Create an Inventory Expenditure Type

In Oracle Project Costing, create at least one expenditure type with the expenditure type class
Inventory. For additional discussion about how to define expenditure types, see the lesson
titled “Implementing Expenditures.”

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 28
Set Expenditure Type Profile Option

Set Expenditure Type Profile Option

The profile option INV: Project Miscellaneous Transaction Expenditure Type governs the
entry of expenditure types for project-related miscellaneous transactions. You can update the
profile option at the site and responsibility levels. Values for this profile option are:
• User Entered - You must enter expenditure types for project-related miscellaneous
transactions.
• System Derived from Cost Element - You cannot enter expenditure types for project-
related miscellaneous transactions. The Cost Collector uses the expenditure types linked to
the cost elements of the current weighted average unit cost of the item to post to Oracle
Project Costing. If you select this option, then you need to associate expenditure types
with cost elements using an Oracle Cost Management responsibility.
Associating Expenditure Types with Cost Elements
Select an Oracle Cost Management responsibility and navigate to the Expenditure Types for
Cost Elements window:
• (N) Setup > Expenditure Types for Cost Elements
• Select a Transfers In and a Transfers Out expenditure type each of the following cost
elements:

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 29
 -Material - An account to accumulate material costs.
-Material Overhead - An account to accumulate material overhead or burden costs.
-Resource - An account to accumulate resource costs.
-Outside Processing - An account to accumulate outside processing costs.
-Overhead - An account to accumulate resource overhead or department overhead
costs.
• In expenditure types are used to cost the value of transfers into a project. Out expenditure
types are used to cost the value of transfers out of a project.
• You can choose only Expenditure Types that are not defined as Rate Required in Oracle
Projects

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 30
Agenda

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 31
Integration with Oracle Project Manufacturing

Integration with Oracle Project Manufacturing

Oracle Project Manufacturing is a solution for companies that manufacture products using
projects or contracts. Oracle Project Manufacturing combines three major applications:
• Oracle Projects Suite
• Oracle Manufacturing Suite
• Third-party project planning and scheduling systems (project management systems)
When used as a part of the Oracle Project Manufacturing functionality, Oracle Project Costing
acts as a cost repository for manufacturing-related activities from other products in the Oracle
Project Manufacturing suite. This integration enables you to:
• Set up the WBS for a manufacturing project. You can then track all manufacturing costs
by project and task and import the cost into Oracle Project Costing.
• Track projects and tasks throughout various manufacturing applications.
• Charge project costs from inventory and work in process to a project and task.
• Include project costs from manufacturing and distribution in your budget.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 32
Importing Project Manufacturing Costs

Importing Project Manufacturing Costs

When you incur project-related costs in Oracle Project Manufacturing, the Cost Collector
process in Oracle Cost Management passes those costs to Oracle Project Costing. The Cost
Collector finds all costed manufacturing transactions that have a project reference and passes
the costs to the correct project, task, and expenditure type in Oracle Project Costing. Run PRC:
Transaction Import in Oracle Project Costing to import the costs. See the following pages for
additional information about the transactions sources that you use to import transactions into
Oracle Project Costing.
If you use Oracle Project Manufacturing, then use function security to prevent users from
entering pre-approved batch items with an expenditure type class of Inventory or Work in
Process.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 33
Transaction Sources

Transaction Sources
Oracle Project Costing predefines transaction sources to import transactions manufacturing-
related costs. Do not use these transaction sources to import transactions from non-Oracle
sources.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 34
Transaction Sources (continued)

Transaction Sources (continued)

For the transaction sources for Inventory, WIP, and WIP Straight Time transactions, the GL
Posting Option in the Project Manufacturing Parameters window determines whether Oracle
Project Manufacturing or Oracle Project Costing generates accounting events and creates
accounting for the transactions in Oracle Subledger Accounting as follows:
• If the posting option is Manufacturing, then Oracle Project Manufacturing creates
accounting for the transactions in Oracle Subledger Accounting.
• If the posting option is Projects, then Oracle Project Costing creates accounting for the
transactions in Oracle Subledger Accounting. The value that you select for the Account
Option determines the source of the default accounting as follows:
- If the option is set to Use AutoAccounting, then Oracle Project Costing uses the
transaction sources with No Accounts to import the transactions with no accounts.
Oracle Project Costing then uses AutoAccounting to derive the default accounts.
- If the option is set to Send Accounts to PA, then Oracle Project Costing uses the
transaction sources with Accounts to import the transactions and the default
accounting from Oracle Project Manufacturing.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 35
Agenda

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 36
Integration with Oracle Asset Tracking

Integration with Oracle Asset Tracking

Oracle Asset Tracking is a fully integrated solution in the Oracle E-Business suite designed to
deploy and track internal products and assets at internal or customer sites, while providing the
ability to automatically capture financial transactions. Oracle Asset Tracking enables you to
provide users with access to tracking information, without allowing them access to sensitive
processes related to assets and purchasing. You can also track inventory items after you have
installed them and link financial transactions to the physical movement of equipment.
Oracle Asset Tracking enables you to create assets upon receipt in Oracle Purchasing. After
you create the asset, Oracle Asset Tracking performs the changes in the background for any
further physical movement. For example, if you move the asset from one location to the other,
then Oracle Asset Tracking performs the asset cost, distribution, and unit changes without
manual intervention. Oracle Asset Tracking integrates with Oracle Inventory, Oracle
Purchasing, Oracle Project Costing, Oracle Assets, Oracle Order Management, and Oracle
Payables, and stores information collected from them.
Oracle Asset Tracking integration includes:
• Creating project-related purchase orders linked to Oracle Asset Tracking

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 37
 • Entering receipts for project-related purchase orders in Oracle Purchasing and validating
the receipts against the Oracle Asset Tracking repository
• Importing tracked items and cost into Oracle Project Costing
• Monitoring costs in Oracle Project Costing
• Generating asset lines for non-depreciable tracked items

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 38
How Purchase Order Receipts Flow into Project-Related
Transactions

How Purchase Order Receipts Flow into Project-Related Transactions

The flow of purchase order receipts starts with the creation of a purchase order. Items against
the purchase order are then received into the project. Oracle Asset Tracking validates the
receipt data against the Oracle Installed Base repository and creates or updates the repository
instance depending upon the physical attributes of the instance.
• For serialized items, Oracle Installed Base always creates a new instance.
• For non-serialized items, physical attributes are combinations of values for Inventory Item
ID, Project ID, Task ID, and Instance Status. If any values of these attributes are different,
then the application creates a new instance in Oracle Installed Base. If these attributes
match, then the application adds the new receipt to the same instance.
During the process of creating purchase orders for expense items, that is, receipt into project,
you must check the Accrue on Receipt flag in the purchase order shipment. You can capture
project information in the distribution record only when the destination type is Expense.
Accrual at period end is not supported.
Run PRC: Transaction Import to create project expenditures after receipt is complete. Use the
Expenditure Inquiry window in Oracle Projects to view the expenditures.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 39
 For a depreciable item, an asset is created upon receipt. Therefore, the cost is transferred from
Oracle Assets to Oracle Subledger Accounting and then to Oracle General Ledger and not from
Oracle Project Costing. To create mass additions in Oracle Assets, you must run the Create
Assets: Interface Inventory Transactions to Oracle Assets concurrent program in Oracle Asset
Tracking.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 40
Importing Oracle Asset Tracking Cost

Importing Oracle Asset Tracking Cost

You run the program PRC: Transaction Import in Oracle Project Costing to import cost. When
you run the program, you must select a transaction source:
• CSE_INV_ISSUE - Imports transactions of the type Issue for non-depreciable items.
• CSE_INV_ISSUE_DEPR - Imports transactions of the type Issue for depreciable items.
• CSE_IPV_ADJUSTMENT - Imports supplier cost adjustments for non-depreciable
items.
• CSE_IPV_ADJUSTMENT_DEPR - Imports supplier cost adjustments for depreciable
items.
• CSE_PO_RECEIPT - Imports transactions of the type Receipt for non-depreciable items.
• CSE_PO_RECEIPT_DEPR - Imports transactions of the type Receipt for depreciable
items.
• Inventory Misc - Imports miscellaneous transactions such as Miscellaneous Issue and
Miscellaneous Receipt.
For additional information, see the Oracle Asset Tracking Implementation Guide and the
Oracle Asset Tracking User Guide.

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 41
Summary

Copyright © 2007, Oracle. All rights reserved.

Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking
Chapter 18 - Page 42
 Appendix B: Budgetary
Controls and Budget
Integration
Chapter 19

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 2
Appendix B: Budgetary Controls and Budget Integration

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 5
Overview of Budgetary Controls

Overview of Budgetary Controls

You can enforce budgetary controls against a GL budget and a project cost budget. Budgetary
controls enable you to monitor and control expense commitment transactions. Expense
commitment transactions are transactions for non-inventory items. Oracle Project Costing
enforces budgetary controls for:
• Project-related purchase requisitions and purchase orders entered in Oracle Purchasing
• Contingent worker purchase orders entered in Oracle Purchasing
• Supplier invoices entered in Oracle Payables
• Project-related prepayments not matched to a purchase order and the application of
unmatched prepayments to supplier invoices
Note: Budgetary controls are not enforced for project-related expense reports entered in Oracle
Payables because you generally enter expense reports after costs are already incurred.
Therefore, you should ensure that your procedures for approving expense report expenditures
include verification of available funds according to your business requirements.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 6
Budgetary Control Settings: Time Intervals

Budgetary Control Settings: Time Intervals

A time interval defines the budget amounts and the transactions included in the available funds
calculation. Time interval settings identify the beginning and the ending periods included in the
calculation. The amount type identifies the beginning period and a boundary code identifies the
ending period. The budgetary control process determines available funds by summing the
budget amounts and subtracting actual and committed transaction amounts for a time interval.
If the budget is time-phased by GL period, then the GL period is used. Alternatively, if the
budget is time-phased by PA period, then the PA period is used.
The Amount Type defines the start of a time interval to determine funds availability:
• Period To Date - From the start of the period in which the expenditure item date falls
• Year To Date - From the start of the year in which the expenditure item date falls
• Project To Date - From the start of the project
The Boundary Code determines the end of a time interval to determine funds availability:
• Period - To the end of the period that includes the expenditure item date
• Year - To the end of the year in which the expenditure item date falls
• Project - To the end of the project

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 7
Budgetary Control Settings: Time Intervals

Budgetary Control Settings: Time Intervals

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

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 8
Budgetary Control Settings: Control Levels

Budgetary Control Settings: Control Levels

You use budgetary control levels to set the degree of control the system imposes on project
commitment transactions. You can enter default control levels at the project type, project
template, and project levels. You can also define default values for resource lists. Select from
the following control levels:
• Absolute - The transaction is rejected if sufficient funds are not available.
• Advisory - The transaction is accepted when sufficient funds are not available, but the
system issues a warning notification that available funds are exceeded.
• None - The transaction is accepted without budgetary control validation.
When control levels are either Absolute or Advisory, the budgetary control process first tests
the lowest budget level to determine the availability of funds. If funds are available for a
transaction at the lowest level, then the validation tests the next level in the budgetary control
hierarchy. The process continues until the transaction passes all levels or fails at any level. If a
transaction fails budgetary control at a level with a control level of Absolute, the process is
discontinued. However, if the control level is Advisory, an insufficient funds warning
notification is generated and the budgetary control process continues to the next level.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 9
Example: Budgetary Control Rollup

Example: Budgetary Control Rollup

The diagram illustrates an example of a budgetary control rollup that reflects budget amounts
at all budget levels, including resource, resource group, lowest task, top task, and project.
At the resource level, the available funds for resources roll up into the available funds for the
resource groups. The available funds for the resource groups roll up into the available funds for
the lowest tasks. The available funds for the lowest tasks then roll up into the available funds
for the top tasks. Finally, the available funds for the top tasks roll up into the available funds
for the project.
For example, as illustrated for Top Task 2, Resource B1 and Resource B2 each have total
available funds of $10. Combined, the total funds of Resource B1 and B2 roll up into the
available funds of $20 for Resource Group B. The total available funds of Resource Group B
and Resource Group C roll up into the available funds for Lowest Task 2.1, which equals $40.
The total available funds for top task 2.1 roll up into the available funds for Top Task 2, which
equals $40. The total available funds of Top Task 2, $40, plus the total available funds of Top
Task 1, $20, roll up into the available funds for Project 1, which equals $60.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 10
Entering Budget Amounts for Controlled Budgets

Entering Budget Amounts for Controlled Budgets

Budget Amounts for Resources
If the budgetary control level for resources or resource groups is Absolute or Advisory, and no
budget amount is entered for a resource or resource group, then Oracle Project Costing treats
the budget amount as zero. Transactions that map to resources with no budget amounts fail
budgetary control at an Absolute level and pass budgetary control with a warning at an
Advisory level.
A budget entry category called Unclassified is available at the resource list level. This category
enables you to enter one budget amount for a group of resources. You can selectively control
costs for some resources within a resource group by entering specific budget amounts for those
resources. You can then use the Unclassified category to budget for the remaining resources
within the resource group. The Unclassified category serves as a budget line for any resource
for which a specific budget line does not exist.
Burden Cost Amounts
If burdening is enabled for a project, then all budgetary control is performed using the
transaction burdened cost. Oracle Project Costing provides the following methods of
accounting for burden costs:

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 11
 • Same Expenditure Item
- When you account for burden cost on the same expenditure item as raw costs, the
budgetary control process calculates the burden cost amounts for a transaction and
adds them to the raw cost amount. The process then maps the burdened transaction
amount to a budget line and performs the necessary budgetary control validation.
- When you use the Same Expenditure Item method of accounting for burden costs,
enter budget amounts for the burdened transaction costs.
• Separate Expenditure Item
- When you account for burden costs as separate expenditure items, the budgetary
control process calculates the burden cost amounts for each burden cost component
and separately maps each burden amount and the raw cost amount to a budget line.
Individual budgetary control validations are performed for each component. If any
component fails validation, then the entire transaction is rejected.
- When you use the Separate Expenditure Item method of accounting for burden
costs and you are not using a resource list for budget entry, enter budget amounts
for the burdened transaction costs. The burden costs and the raw cost are mapped to
budget lines using the same mapping rules and are therefore mapped to the same
line.
- When you use this burden accounting method and you are budgeting using a
resource list, the burden costs are not mapped using the resource for the raw cost.
You must ensure that each burden cost component maps to a budget line with the
desired budgetary control setting. To do this, define your burden cost components
as resources on your resource list and then use these resources to enter budget
amounts for burden costs. This enables you to enter a budgetary control setting for
each burden cost component and a control setting for budget lines defined for raw
costs. If you do not want to impose budgetary controls on burden cost amounts,
then you can assign a control setting of None for all budget lines for burden
component resources.
- An alternative to defining resources on your resource list for burden cost
components is to use the Unclassified budget entry category to budget for burden
cost amounts. If a budget line cannot be found for the burden cost components and
an Unclassified budget line exists, then the budgetary control process maps the
burden costs to the Unclassified line.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 12
Budget Definition Strategies

Budget Definition Strategies

Oracle Project Costing budgetary controls only apply to expense commitment transactions.
Budgetary controls do not apply to other project-related transactions such as timecards,
expense reports, or inventory item purchases. Therefore, when you enable budgetary controls
for a project, it is recommended that you use one of the following strategies for defining cost
budget amounts:
• Strategy 1: Define Two Budgets - Define an overall project cost budget. The overall cost
budget tracks all project costs. Do not enable budgetary controls for the Approved Cost
Budget type. Define a separate budget for expense commitment transactions. It is
recommended that you create a user-defined budget type for the commitment budget.
Enable budgetary controls for this budge type.
• Strategy 2: Define One Cost Budget - The second approach uses one cost budget for all
anticipated project costs. The budget includes separate budget lines for expense
commitment transactions and all other project costs. When you define a project, enable
budgetary controls using this budget type. It is recommended that a control setting of
None be entered for all other budget lines.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 13
Transaction Processing with Controlled Budgets

Transaction Processing with Controlled Budgets

Initiating Budgetary Control Validation in Oracle Purchasing and Oracle Payables
In Oracle Purchasing and Oracle Payables, budgetary control processes are activated when you
select the Check Funds option for a transaction, and also during the transaction approval.
Funds Check Activation in Oracle Project Costing
In Oracle Project Costing, budgetary controls only apply to expense commitment transactions.
You interface project-related expense commitment transactions from Oracle Purchasing and
Oracle Payables to Oracle Project Costing as supplier costs. After you interface supplier costs
to Oracle Project Costing, you can adjust the expenditure items in Oracle Project Costing.
You run the program PRC: Distribute Supplier Cost Adjustments to process the adjusted
supplier cost expenditure items. This program uses AutoAccounting in Oracle Project Costing
to determine the default expense account for the adjustments. This program also performs a
budgetary control validation for transactions meeting all of the following criteria:
• The supplier cost originated in Oracle Purchasing or Oracle Payables
• The transaction is charged to a project with budgetary controls enabled
• The transaction is an expense item

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 14
 When you change a burden multiplier, you must run one of the following programs to initiate
budgetary control validation for the changed burden amounts. The program you run depends
on the burdening method for the project.
• PRC: Distribute Total Burdened Costs - Run this program if the project is set up to
account for total burdened costs.
• PRC: Create and Distribute Burden Transactions - Run this program if the project is
set up to account for burden costs by burden cost component.
If funds are available for the adjusted expenditure amounts, then the adjustment item is cost
distributed. If funds are not available for an item, then the item is not distributed and an
exception is reported.
Oracle Project Costing also performs budgetary control validation for contingent worker labor
costs related to a purchase order when you run the program PRC: Distribute Labor Costs or
PRC: Distribute Labor Costs for a Range of Projects.
If an item is not cost distributed as a result of a budgetary control failure, then you must
perform one of the following actions and rerun the distribution program:
• Increase budget amounts so funds are available for the expenditure item.
• Decrease the budgetary control level from Absolute to Advisory or None for the budget
level causing the budgetary control failure.
• For an adjusted item, undo the change that increased the expenditure item amount. For
example, if you increased a burden cost rate, then set the rate back to its original value.
• For a transferred item, transfer the item to a task within the same project, or to another
project or project task that has sufficient funds available or that does not have budgetary
controls enabled.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 15
Overview of the Budgetary Control Process Flow

Overview of the Budgetary Control Process Flow

The following activities take place during budgetary control validation:
1. Source subledger applications generate accounting events. For example, both Oracle
Purchasing and Oracle Project Costing generate accounting events when you check funds
for a purchase order when top-down budgeting and burdening is enabled for the project.
2. Source subledger application calls the budgetary control API.
3. Budgetary control API calls the Oracle Subledger Accounting Online Process.
4. Oracle Subledger Accounting Online Process processes the accounting events to create
accounting entries and calls the Oracle Subledger Accounting Validation Routine.
5. Oracle Subledger Accounting Validation Routine populates the GL_BC_PACKETS table
with the accounting entries and calls the PSA/GL funds check API.
6. PSA/GL funds check API first calls the Projects funds check API.
7. If a project-related transaction is being validated, then Projects funds check API checks
for funds availability and returns status to PSA/GL funds check API.
8. If Projects funds check API returns a success value, then PSA/GL funds check API
processes the transaction for GL funds availability.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 16
 9. PSA/GL funds check API and Projects funds check API coordinate status information.
10. Success and failure statuses are updated in GL_BC_PACKETS table.
11. The accounting entries are committed as final or draft, depending on the status returned
from the Oracle Subledger Accounting Validation Routine and on whether reserve funds
(final) or check funds (draft) was invoked.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 17
Viewing Budgetary Control Results

Viewing Budgetary Control Results

After the transaction is validated against the project budget, you can view the results from the
Funds Check Results window. The window displays budgetary control results for transactions.
Note: You can also view the budgetary control results from the source application after the
funds validation action is performed. The results are displayed in an XDO report format.
Funds Check Results Window
To review transaction budgetary control results, perform the following steps:
1. Navigate to the Find Funds Check Details window.
2. Enter selection criteria.
3. Choose the Find button to display the Funds Check Results window.
4. Select a budget level tab to view information for a specified budget level.
For a list of budgetary control results messages, see the Oracle Project Management User
Guide.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 18
Maintaining Budgetary Control Balances

Maintaining Budgetary Control Balances

Oracle Project Costing maintains budgetary control balances for all projects that use budgetary
controls. For each budget line, the budget amount, the commitment transactions total, and the
total actuals related to commitment transactions are maintained. The system also calculates
available funds for each budget category and budget period.
When you create a baseline from the original budget version, the system creates initial
balances. When you run PRC: Maintain Budgetary Control Balances, the program updates the
balances. The updated balances are displayed in the Budget Funds Check Results window. To
determine how often to schedule the program, consider the number of project-related
commitments your business creates each day as well as your online inquiry business needs.
The Budget Funds Check Results window displays budget, actuals, commitments, and
available funds balances for each budget level. The window includes a tabbed region for each
project budget level. The levels can include the following: project, top task, task, resource
group, and resource. You can use the window to review project-to-date transactions and to plan
future expenditures. You can also use the information in this window, along with the
Transaction Funds Check Results window, to troubleshoot budgetary control failures.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 19
Budgetary Controls Cross Charge Restriction

Budgetary Controls Cross Charge Restriction

A transaction is subject to the budgetary controls defined for only the ledger in which the
transaction originates. Therefore, when you enable budgetary controls for a project, you cannot
enter cross charge transactions that cross ledgers.
The following scenario illustrates the need for this restriction:
• Two ledgers are defined in an installation of Oracle Applications.
• In Ledger One (L1), budgetary controls are enabled in Oracle General Ledger and Oracle
Payables.
• In Ledger Two (L2), budgetary controls are not enabled in any application.
Project A is defined in L1 and budgetary controls are enabled for the project. If you enter a
commitment transaction in L2 for Project A, the transaction does not undergo budgetary
control validation, because budgetary controls are not enabled in L2.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 20
Agenda

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 21
Overview of Budget Integration

Overview of Budget Integration

Top-Down budget integration enables financial managers to maintain centralized control of
organization spending while still granting project managers flexibility in managing their
individual projects. An organization-level budget defines overall spending limitations. Project
budgets consume funds from the organization-level budget and are used to control spending for
individual projects.
Bottom-Up budget integration enables you to create centralized organization-level budgets
from defined project budgets. The organization-level budget amounts are an accumulation of
project budget amounts and may also include budget amounts from other sources. Financial
managers use the organization-level budgets to view budgeted figures for the organization as a
whole, while project managers maintain independent budgets to monitor spending and revenue
generation for each project.
Non-integrated budgets with budgetary controls enable you to control spending against your
project budget without sending budget-related accounting entries to Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 22
Generating Accounting for Integrated Budgets

Generating Accounting for Integrated Budgets

Oracle Project Costing uses the Project Budget Account Generation workflow to generate
default accounts for budget lines. The budgets that you define in Oracle General Ledger are
account-level budgets (by account and GL period). Therefore, when you enter project budget
amounts for integrated budget types, you must use a budget entry method that is time-phased
by GL period, and you must assign an account to each project budget line.
If you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites default accounts, or individual segments of accounts, that
Oracle Project Costing generates using the Project Budget Account Workflow. You run the
program PRC: Transfer Journal Entries to GL to transfer the final subledger journal entries
from Oracle Subledger Accounting to Oracle General Ledger.
Important: If you update account derivation rules for budgets in Oracle Subledger
Accounting, then you must carefully consider the affect of the updates on existing integrated
budgets. The baseline process fails if a revised account derivation rule overwrites accounts for
budget lines that are associated with transactions.
For top-down budget integration, Oracle Project Costing generates accounting events to create
project budget encumbrance accounting entries. Oracle Project Costing generates the

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 23
 accounting events and initiates the process to create accounting in final mode in Oracle
Subledger Accounting in the following circumstances:
• When you run the process PRC: Year End Budget Rollover to transfer year-end balances
for top-down integrated project budgets to the next fiscal year
• When you create a baseline version for a top-down integrated project budget
For bottom-up budget integration, Oracle Project Costing generates accounting events to create
budget accounting entries. Oracle Project Costing generates the accounting events and initiates
the process to create the subledger accounting in final mode when you create a baseline version
for a bottom-up integrated project budget.
In addition, when you initiate the Check Funds action for an integrated budget, Oracle Project
Costing creates accounting in draft mode in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 24
Accounting Event Model Overview

Accounting Event Model Overview

Oracle Project Costing predefines the Budgets event entity to use for integrated budgets. An
event entity enables Oracle Subledger Accounting to handle the accounting for similar business
events in a consistent manner.
In addition, Oracle Project Costing predefines the Budget event class and two event types
Budget Year End Rollover and Budget Baseline, for the Budgets accounting event entity. An
event class represents a category of business events for a particular transaction type or
document. An event type represents a business operation that you can perform for an event
class. Oracle Projects generates accounting events for the Budget event class when you enable
either top-down or bottom-up budget integration for a project budget.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 25
Accounting Event Model Overview

Accounting Event Model Overview

Oracle Project Costing also predefines event classes and event types for the Requisition,
Purchase Order, and Release accounting event entities in Oracle Purchasing, and for the AP
Invoices accounting event entity in Oracle Payables. These event classes and event types are
for encumbrance accounting for burden cost on project-related commitments in Oracle
Purchasing and Oracle Payables.
Oracle Project Costing creates project encumbrance entries when you enable top-down budget
integration for a project. Oracle Project Costing provides this setup in Oracle Purchasing and
Oracle Payables so that these applications can create encumbrance for burden costs.
Oracle Purchasing and Oracle Payables create encumbrance journals whenever any funds
related action is performed for a document. For example, when you perform a Check Funds
action for document, the encumbrance accounting events are processed to create the
encumbrance journals in draft mode. When you perform a Reserve Funds action for a
document, the encumbrance accounting events are processed to create the encumbrance
journals in final mode and the funds balances are updated. After processing is complete, you
can review the updated funds balances.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 26
 If you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites default accounts, or individual segments of accounts, that
Oracle Purchasing or Oracle Payables derives using the Account Generator.
For a list of the predefined event classes and event types, see the Oracle Projects
Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 27
Budget Check Funds Processing Overview

Budget Check Funds Processing Overview

You can choose to perform a budget check funds before you submit the budget for baseline
processing. The following processing occurs during a budget check funds:
1. Oracle Project Costing determines the default accounts using the Project Budget Account
Generation Workflow.
2. Oracle Project Costing validates funds.
- For top-down integrated budgets, Oracle Project Costing validates existing approved
transaction amounts (at resource, resource group, task, top task and project levels)
against the project budget.
3. Oracle Project Costing generates accounting events.
4. Oracle Subledger Accounting creates accounting entries in draft mode for the accounting
events.
5. Oracle Project Costing validates funds.
- For bottom-up budget integration, Oracle Project Costing validates the budget
amounts against an organization-level Oracle General Ledger budget.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 28
 - For top-down integrated budgets, Oracle Project Costing validates budget amounts
against the General Ledger Funding Budget and then validates existing approved
transaction amounts (at account level) against the project budget.
6. Oracle Project Costing updates the budget lines with the accounting information from
Oracle Subledger Accounting and the budget check funds result status.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 29
Creating a Baseline for an Integrated Budget

Creating a Baseline for an Integrated Budget

When you create a baseline version for an integrated project budget, the baseline process
performs the following activities:
1. Validates the submitted budget version.
2. Creates a baseline for the new budget version.
3. Validates funds.
- For top-down integrated budgets, the baseline process validates existing approved
transaction amounts (at resource, resource group, task, top task and project levels)
against the project budget.
- Note: When you use the PA: Budget Workflow to control budget status changes,
Oracle Project Costing performs funds validation only after the budget is approved.
4. Generates accounting events to reverse the accounting for the most recent baseline
version, if one exists, and to create accounting for the new baseline version.
- For bottom-up budget integration, the baseline process generates accounting events to
create budget journal entries.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 30
 - For top-down integrated budgets, the baseline process generates accounting events to
create encumbrance journal entries.
5. Creates accounting in final mode for the accounting events in Oracle Subledger
Accounting.
6. Validates funds.
- For bottom-up budget integration, the baseline process validates the budget amounts
against an organization-level Oracle General Ledger budget.
- For top-down integrated budgets, the baseline process validates budget amounts
against the General Ledger Funding Budget and then validates existing approved
transaction amounts (at account level) against the project budget.
- Note: If the budget fails funds validation, then the baseline process removes the
accounting entries it created from Oracle Subledger Accounting and updates the
submitted budget version to Rejected status.
You run the program PRC: Transfer Journal Entries to GL to transfer the journal entries to
Oracle General Ledger. When you submit the program PRC: Transfer Journal Entries to GL,
you can optionally choose to have the program post the journal entries. Otherwise, you can
manually post the journal entries in Oracle General Ledger. The baseline program updates
funds balances in Oracle General Ledger. The program PRC: Transfer Journal Entries to GL
does not affect funds balances.
For non-integrated budgets with budgetary controls, the baseline process validates the
submitted budget version, creates baseline version, and validates existing transaction amounts
against the project budget. The baseline process does not generate and process accounting
events for non-integrated budgets.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 31
Budget Integration Workflow

Budget Integration Workflow

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

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 32
Reviewing and Overriding Budget Account Details

Reviewing and Overriding Budget Account Details

You can review and optionally override default accounts, or an account segment, generated by
the Project Budget Account Generation workflow.
Note: Do not update the account for the budget line if the budget line is associated with
transactions. Updating the account causes the baseline process to fail.
If you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites default accounts, or individual segments of accounts, that
Oracle Project Costing generates using the Project Budget Account Generation workflow. If no
transactions exist for a budget line, then Oracle Project Costing updates the budget line with
the new account when you manually update accounts on the Budget Accounts Details window
and when you define account derivation rules in Oracle Subledger Accounting to overwrite
accounts.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 33
Viewing Encumbrance and Budget Subledger Accounting

Viewing Encumbrance and Budget Subledger Accounting

You can use the subledger accounting events drill-down and inquiry menu options in Oracle
Project Costing, Oracle Payables, and Oracle Purchasing to view information about budget and
encumbrance journal entries. You can:
• Perform an inquiry on accounting events, journal entries and journal entry lines based on
multiple selection criteria.
• View information about an accounting event or journal entry error.
• View detailed information about the subledger journal entry headers for a given
accounting event.
• Compare subledger journal entry information for any two journal entries.
• View subledger journal entry lines for a number of different documents or transactions.
• View subledger journal entry in T-account format.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 34
Agenda

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 35
Top-Down Budget Integration

Top-Down Budget Integration

When enterprises use top-down budgeting, top management defines spending limits for each
organization. Budgetary controls are set to enforce the limits, and encumbrance accounting
creates reservations for planned expenditures.
The reservations ensure that funds will be available when project costs are incurred, and
provide a complete picture of funds available for future use.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 36
Top-Down Budget Integration Procedures

Top-Down Budget Integration Procedures

Defining General Ledger Funding Budgets
Before you can define budget integration, you must define an organization-level funding
budget or budgets in Oracle General Ledger. To set an organization's spending limits, you enter
funding budget balances for the accounts assigned to each budget organization.
Defining Budget Integration
To reserve funds in General Ledger funding budgets for anticipated project costs, define
budget integration using the Budgetary Controls option from the Projects, Templates window.
When you define integration for your project, use the budget type you plan to use for your
commitment budget and select the Encumbrance balance type. You must define Integration
before you create a baseline version for the project budget and before you enter any project
transactions. See the section of this lesson titled "Implementation Steps."
Entering Budget Amounts and Generating Accounts
When you define a commitment budget for controlling expense-type commitment transactions
and create a baseline version, the system generates encumbrance entries to create a project
encumbrance against the funding budget. The project encumbrance reserves funds for the

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 37
 anticipated project commitment costs. When project-related expense commitment transactions
are approved, the project encumbrance is reduced and new commitment encumbrances created.
When you define integration using the Encumbrance balance type, the system automatically
enables budgetary controls for the project. The Project control level is automatically set at
Absolute and cannot be changed. Oracle Project Costing uses budgetary controls to ensure that
the project commitment total for expense transactions never exceeds the project commitment
budget and the amounts reserved in the General Ledger funding budget.
Creating a Baseline Budget Version
When a project is set up to use top-down integration, the process to create a baseline version
varies depending on whether you use workflow to control budget status changes.
• If you do not use workflow to control budget status changes, then Oracle Project Costing
calls the PA: Budget Integration Workflow.
• If you use workflow to control budget status changes, then Oracle Project Costing changes
the budget version status to In Progress and calls the budget approval workflow. After the
budget is approved, baseline processing continues for the budget version. Oracle Project
Costing displays any rejections encountered during baseline processing in the budget
approval notification.
When you submit a top-down integrated budget, Oracle Project Costing:
• Validates the submitted budget version.
• Creates a baseline version
• Validates existing approved transaction amounts (at resource, resource group, task, top
task and project levels) against the project budget.
• Generates accounting events
• Creates encumbrance journal entries in final mode for the accounting events in Oracle
Subledger Accounting
• Validates budget amounts against the General Ledger Funding Budget
• Validates existing approved transaction amounts (at account level) against the project
budget.
If the baseline version is the initial baseline version for the budget, then Oracle Project Costing
creates and validates encumbrance journal entries for this budget version. If a prior baseline
version exists, then Oracle Project Costing creates and validates reversal encumbrance journal
entries for the most recent baseline version and new encumbrance journal entries for the new
baseline version.
Transferring Budget Journals to Oracle General Ledger
You run the program PRC: Transfer Journal Entries to GL to transfer encumbrance journal
entries from Oracle Subledger Accounting to Oracle General Ledger.
Posting Encumbrance Journals
When you submit the program PRC: Transfer Journal Entries to GL, you can optionally choose
to have the program post the journal entries. Otherwise, you can manually post the journal
entries in Oracle General Ledger. The baseline process updates funds balances in Oracle
General Ledger. The program PRC: Transfer Journal Entries to GL does not affect funds
balances.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 38
Encumbrance Accounting Example

Encumbrance Accounting Example

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

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 39
Encumbrance Accounting Example

Encumbrance Accounting Example

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

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 40
Encumbrance Accounting Example

Encumbrance Accounting Example

The Finance Department submits the program PRC: Transfer Journal Entries to GL and selects
Yes for the parameter Post in General Ledger. The program transfers encumbrance journal
entries from Oracle Subledger Accounting to Oracle General Ledger and posts the journal
entries in Oracle General Ledger.
Note: The account 01-000-1280-000 is defined as the Reserve for Encumbrance Account in
Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 41
Creating Project Budgets for Top-Down Budget Integration

Creating Project Budgets for Top–Down Budget Integration

When you define top-down budget integration for a project, it is recommended that you create
a commitment budget for tracking and controlling the project's expense commitment
transactions. Keep in mind the following considerations:
• Budgetary Controls are automatically enabled when top-down integration is defined.
• General Ledger accounts must be assigned to all budget lines for integrated budget types.
• When you create a budget for an integrated budget type, you must use a budget entry
method that is time phased by GL period.
• You must create a budget line for each budget category and budget period for which
commitment transactions are expected.
• The process to create a baseline version varies depending on whether you use workflow to
control budget status changes.
• Additional validations occur when you create a baseline for an integrated project budget.
Note: For top-down budget integration, you also need to enable encumbrance accounting in
Oracle Purchasing and Oracle Payables and budgetary control in Oracle General Ledger. See
the section of this lesson titled "Implementation Steps."

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 42
Maintaining the Project Budget

Maintaining the Project Budget

When you modify a top-down integrated budget, the baseline process performs the following
tasks for the new budget version:
• Validates the budgetary controls defined for the project budget
• Validates the budgetary controls defined for the funding budget
• Validates the General Ledger period statuses
• Updates the project encumbrance against the funding budget
Project Budgetary Controls
The system validates budgetary controls when budget amounts are deleted or decreased or
when the budget entry method is changed. When budget amounts are reduced, the baseline
process performs budgetary control validations to ensure that existing transaction totals do not
exceed available funds calculated using the new budget amounts. When the budget entry
method is changed and a budget version is created using new budget categories, the baseline
process maps all existing transactions in open GL periods to a budget line in the new budget
version. Budgetary control validations are then performed for each transaction that uses
budgetary controls defined for the new budget lines. If any transaction generates a budgetary
control failure, the baseline process fails. If the baseline process fails, you can troubleshoot by

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 43
 viewing the rejected budget version in the Budget Funds Check Results window. You can also
use the Funds Check Results window to view the rejection reason for the particular transaction
that failed during the baseline process.
Funding Budget Controls and GL Period Statuses
When budget amounts are increased or new budget lines are entered, additional funds must be
reserved in the funding budget. Therefore, the baseline process performs a budgetary control
validation against the funding budget to ensure that funds are available for the additional
project budget amounts. If any budgetary control failures are returned, the baseline process
fails.
Project Encumbrance Maintenance
When a baseline is successfully created for a revised budget, the project encumbrance against
the funding budget is adjusted. If new budget lines are added or existing budget line amounts
are increased, then additional funds are reserved in the funding budget. If budget lines are
decreased or deleted, then project encumbrances are liquidated, reducing the project
reservation. The Accounted Amount column on the By Account tab of the Budget Accounts
Details window displays the encumbrance adjustment amounts. Positive values reserve
additional funds and negative values reduce the current reservation.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 44
Year-End Processing

Year-End Processing
When budgeted funds for a fiscal year are not used by the end of the year, many businesses
move the available amounts to the next year. Organizations that operate under budget do not
lose the budgeted amounts. Instead, their spending limits for the next year are increased.
The PRC: Year End Budget Rollover program transfers year-end balances for top-down
integrated project budgets to the next fiscal year. The program performs budget rollover
functions for all selected top-down integrated budgets. The program calculates transfer amount
for each project budget line by subtracting the total actual and commitment balances from the
budgeted amounts. The program then adds the transfer amount for each project budget line to
the budget amount for the first period of the next fiscal year.
When the program PRC: Year End Budget Rollover is complete, you run the program PRC:
Transfer Journal Entries to GL to transfer the encumbrance journal entries to Oracle General
Ledger. When you submit the program PRC: Transfer Journal Entries to GL, you can
optionally choose to have the program post the journal entries. Otherwise, you can manually
post the journal entries in Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 45
Agenda

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 46
Bottom-Up Budget Integration

Bottom-Up Budget Integration

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

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 47
Bottom-Up Budget Integration Procedures

Bottom-Up Budget Integration Procedures

Defining an Organization-Level Budget
You must define your organization-level budget or budgets in Oracle General Ledger. In
Oracle General Ledger, budgets contain estimated cost or revenue amounts for a range of
accounting periods. Budget organizations define the departments, cost centers, divisions, or
other groups for which budget data is maintained. You assign accounts to each budget
organization. You create organization budget balances by entering budget amounts for the
assigned accounts.
Defining Budget Integration
You define budget integration using the Budgetary Control option from the Projects,
Templates window. You can use any project budget type to define bottom-up budget
integration. You must define Integration before you create a baseline version for the project
budget and before you enter any project transactions. See the section of this lesson titled
"Implementation Steps."
Entering Budget Amounts and Generating Accounts
Next, you enter your budget and generate accounts in Oracle Project Costing.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 48
 Creating a Baseline Budget Version
When a project is set up to use bottom-up integration, the process to create a baseline version
varies depending on whether you use workflow to control budget status changes.
• If you do not use workflow to control budget status changes, then Oracle Project Costing
calls the PA: Budget Integration Workflow.
• If you use workflow to control budget status changes, then Oracle Project Costing changes
the budget version status to In Progress and calls the budget approval workflow. After the
budget is approved, baseline processing continues for the budget version. Oracle Project
Costing displays any rejections encountered during baseline processing in the budget
approval notification.
The budget baseline process validates the submitted budget version, creates a baseline version,
generates accounting events, creates budget journal entries for the accounting events in Oracle
Subledger Accounting, and validates the budget amounts against an organization-level Oracle
General Ledger budget. If the baseline version is the initial baseline version for the budget,
then the baseline process creates and validates budget journal entries for this budget version. If
a prior baseline version exists, the baseline process creates and validates reversal budget
journal entries for the most recent baseline version and new budget journal entries for the new
baseline version.
Transferring Budget Journals to Oracle General Ledger
After you create a baseline version for an integrated project budget, you run the program PRC:
Transfer Journal Entries to GL to transfer the journal entries to Oracle General Ledger and
initiate the program Journal Import in Oracle General Ledger. If the baseline version is the
initial baseline version for the budget, then the program transfers the budget journal entries it
creates for this version. If a prior baseline version exists, then the program transfers reversal
budget journal entries for the most recent baseline version and new budget journal entries for
the new baseline version. The baseline process updates funds balances in Oracle General
Ledger. The program PRC: Transfer Journal Entries to GL does not affect funds balances.
Posting Budget Journals
When you submit the program PRC: Transfer Journal Entries to GL, you can optionally choose
to have the program post the journal entries. Otherwise, you can manually post the journal
entries in Oracle General Ledger. You can review and post the entries using the General
Ledger Post Journals window.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 49
Agenda

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 50
Non-Integrated Budgets with Budgetary Controls Procedures

Non-Integrated Budgets with Budgetary Controls Procedures

You can set up your project to use budgetary controls with a non-integrated budget. Oracle
Project Costing does not generate and process accounting events for non-integrated budgets.
Defining Non-Integrated Budgets with Budgetary Control
You define budget integration using the Budgetary Control option from the Projects,
Templates window. See the budgetary control discussion in the section of this lesson titled
"Implementation Steps."
Creating a Baseline Budget Version
When you create the baseline budget version, the baseline process:
1. Validates the submitted budget version.
2. Creates baseline version.
3. Validates existing approved transaction amounts against the project budget.
Note: A project-related document in Oracle Purchasing or Oracle Payables is independently
validated against the GL budget and the project budget.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 51
Agenda

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 52
Budgeting Implementation Steps

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 53
Define Additional Core Budgeting Setup

Define Additional Core Budgeting Setup

You can define additional core budgeting setup as needed. This setup includes budget change
reasons, budget types, and budget entry methods.
• Budget Change Reasons - You can select a budget change reason for budget versions and
for individual budget lines. You can define your own change reasons.
• Budget Types - Budget types define the different types of budgets that you plan for when
you want to create budgets that use budgetary controls and budget integration features.
• Budget Entry Methods - Budget entry methods specify and control the following
options:
- The level of the work breakdown structure at which you enter a budget.
- The time phase that you use to enter budget amounts, if any.
- Whether you enter amounts that are categorized by resources.
- The amounts that you can enter.
For additional information, see the "Implementing Oracle Project Management" section of the
Oracle Projects Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 54
Implementing Budgetary Controls

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 55
Budgetary Controls: Enable Budgetary Controls and
Encumbrance Accounting

Budgetary Controls: Enable Budgetary Controls and Encumbrance Accounting

To use budgetary controls, you must enable budgetary control for the ledger in Oracle General
Ledger and enable encumbrance accounting in Oracle Payables or Oracle Purchasing.
Encumbrance accounting automatically creates encumbrances for requisitions, purchase orders,
and invoices. For additional details, see information about encumbrance financials options in
the Oracle Payables Implementation Guide.
Note: The budgetary control process uses the following predefined encumbrance types:
• Projects for top-down integrated budgets in Oracle Project Costing
• Commitment for requisitions
• Obligation for purchase orders
• Invoices for Oracle Payables documents
Important: After you enable budgetary control for the ledger in Oracle General Ledger and
encumbrance accounting in Oracle Payables or Oracle Purchasing, you must not disable it.
Modifying these options can result in data corruption in funds-related tables and cause failures
during funds validation processing.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 56
Budgetary Controls: Define Profile Options

Budgetary Controls: Define Profile Options

• PA: Enable Budget Integration and Budgetary Control Feature - To enable
budgetary control for your projects, you must set this profile option to Y (Yes).
• PA: Days to Maintain BC Packets - Specify the number of days budgetary control
results are maintained. The default value is 3. Increasing this value may slow the
performance of the budgetary control process. Use the Funds Check Results window to
view budgetary control results for transactions that are not older than the number of days
that you specify. The budgetary control results for transactions that pass budgetary
control are available for online viewing in the Funds Check Results window only until
any of the following events occurs:
- You run the concurrent program PRC: Maintain Budgetary Control Balances.
- You create a baseline version for any project with budget integration.
- The transaction is older than the number of days specified for profile option.
• PSA: Budgetary Control Report Template – You can set this profile option at the site,
application, responsibility, and user levels. You must select Budgetary Control Results
Template to view budgetary control results from Oracle Purchasing and Oracle Payables.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 57
Budgetary Controls: Define Control Levels and the Time Interval

Budgetary Controls: Define Control Levels and the Time Interval

Define budgetary controls for non-integrated budgets and for top-down integrated budgets.
You can define budgetary controls for project types, project templates, and projects. Values
that you define for a project type are the default values for project templates. Values that you
define for project templates are the default values for projects. When you define a project type,
indicate whether or not the default values for budgetary controls can be changed at the project
level.
Non-Integrated Budgets: Defining Budgetary Controls for Project Types
1. Navigate to the Budgetary Control tab for a project type.
2. Allow Override at Project Level - Check this box to allow users to modify the settings at
the project level.
3. Budget Type - Select a project cost budget type.
4. Control Flag - Enable the Control Flag check box.
5. Balance Type - Leave blank.
6. Non-Project Budget - Leave blank.
7. Levels - Select a default control level for each budget level.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 58
 8. Time Phase - Select an Amount Type and Boundary Code to be used when the system
calculates available funds.
Non-Integrated Budgets: Defining Budgetary Controls for Project Templates and
Projects
1. Navigate to the Budgetary Control option of the Projects, Templates window.
2. Budget Type - Select a project cost budget type.
3. Balance Type - Leave blank.
4. Non-Project Budget - Leave blank.
5. Levels - Select a default control level for each budget level.
6. Time Phase - Select an Amount Type and Boundary Code to be used when the system
calculates available funds.
For information about defining budgetary control setup for top-down integrated budgets, see
the information in this section about implementing top-down integration.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 59
Budgetary Controls: Create an Initial Budget

Budgetary Controls: Create an Initial Budget

When you enable budgetary controls for a project, you must create a baseline version for your
project cost budget before you enter commitment transactions. If a baseline version does not
exist when you approve a commitment transaction, then the transaction fails and you receive an
error message: No baseline budget version exists for this project.
For a project that uses burdening, use a budget entry method that enables you to enter burdened
cost amounts. Oracle Project Costing uses burdened cost amounts to enforce budgetary
controls. If you enter only raw cost amounts for a project budget with a budget entry method
that allows the entry of burdened cost amounts, then Oracle Project Costing automatically
copies the raw cost amounts to the burdened cost fields. These amounts are then used to
enforce budgetary controls for your project.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 60
Budgetary Controls: Adjust Default Control Levels

Budgetary Controls: Adjust Default Control Levels

When you create a baseline for a project budget for the first time, Oracle Project Costing
creates default budgetary control level settings for each budget level based on the values in the
Budgetary Controls option. You can override the default control level values for the baseline
budget version. When you create subsequent baselines for the project budget, Oracle Project
Costing uses the revised budgetary control level settings and not the default settings. For
example, if you override the budgetary control level for a task, Oracle Project Costing does not
reset the task to the default value the next time that you create a baseline for the budget.
If you add new tasks to the project or new resource groups or resources to the resource list
assigned to the budget, the next time you create a baseline for the budget, Oracle Project
Costing automatically creates default budgetary control settings for the new tasks, resource
groups, or resources. You can override the default control level values for the baseline budget
version.
To adjust budgetary control levels, perform the following steps:
1. Navigate to the Budgets window.
2. Query your project cost budget.
3. Choose the History button to view the budget version history.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 61
 4. Select Budgetary Controls from the Tools menu.
5. Change control level values as required.
6. If you are budgeting using a resource list, then choose the Resources button on the
Budgetary Control window to override the default values for resource groups and
resources.
7. Save your work.
Important: You can select the Reset Defaults button on the Budgetary Control window to
restore the default budgetary control settings for the project. When you select the Reset
Defaults button, Oracle Projects resets all budgetary control settings to the default values,
including any settings that you have manually overridden.
Default Budgetary Controls and Changing the Budget Entry Method
You can change the budget entry method for a budget after you create a baseline version. If the
budget entry level for the new budget entry method is different from the budget entry level for
the current budget entry method, Oracle Project Costing resets to the budgetary controls to the
default budgetary control level settings when you create the next budget baseline.
For example, if the budget entry level of the current budget entry method is Top Tasks and the
budget entry level for the new budget entry method is Lowest Tasks, Oracle Project Costing
resets the budgetary controls to the default budgetary control level settings when you create the
next budget baseline.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 62
Implementing Budget Integration

Implementing Budget Integration

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

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 63
Budget Integration: Define the Project Budget Account Generation
Workflow

Budget Integration: Define the Project Budget Account Generation Workflow

Oracle Project Costing uses the Project Budget Account Generation workflow process to
generate default accounts when a project budget is integrated with a non-project budget. You
must customize the Project Budget Account Generation workflow process to generate accounts
according to your business needs.
This workflow runs when one of the following events occurs:
• You manually select the Generate Budget Accounting option from the Tools menu of the
Budgets window.
• You submit an integrated budget and it creates a baseline version.
• You run the year-end rollover program for a top-down integrated budget to carry forward
the unspent project budget encumbrance amount from the year that is ending into the next
year.
When you activate the workflow from the Tools menu, an account is generated or regenerated
for all the defined budget lines. When the workflow is activated during budget submission,
accounts are only generated for budget lines that do not already have an assigned account.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 64
 Note: Do not update the account for the budget line if the budget line is associated with
transactions. Updating the account causes the baseline process to fail.
You must customize the Project Budget Account Generation workflow to generate accounts
based on your business needs. Oracle Project Costing provides predefined parameters to
simplify the customization process. You can use the predefined parameters to derive accounts
based on project organizations, expenditure organizations, and tasks, or based on the resource
groups and resources used for budget entry.
Oracle Project Costing predefines setup in Oracle Subledger Accounting to accept default
accounts from Oracle Project Costing without change. If you define your own detailed
accounting rules in Oracle Subledger Accounting, then Oracle Subledger Accounting
overwrites default accounts, or individual segments of accounts, that Oracle Project Costing
derives using the Project Budget Account Generation workflow.
For additional details, see the Oracle Projects Implementation Guide.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 65
Budget Integration: Define Profile Options

Budget Integration: Define Profile Options

• PA: Allow Override of Budget Accounts - This profile option enables you to control
whether you can manually override accounts generated by the Project Budget Account
Generation workflow process.
• PA: Enable Budget Integration and Budgetary Control Feature - To enable budget
integration for your projects, you must set this profile option to Y (Yes).
• PA: Days to Maintain BC Packets - This profile option specifies the number of days
budgetary control results are maintained. For more information, see the discussion in this
section about implementing budgetary controls.
• PSA: Budgetary Control Report Template – You can set this profile option at the site,
application, responsibility, and user levels. You must select Budgetary Control Results
Template to view budgetary control results from Oracle Purchasing and Oracle Payables.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 66
Budget Integration: Implement Top-Down Integration

Budget Integration: Implement Top-Down Integration

Defining Top-Down Budget Integration for Project Types:
1. Navigate to the Budgetary Control tab for a project type.
2. Allow Override at Project Level - Enable this box to allow users to modify the default
budget integration settings at the project level.
3. Budget Type - Select a project cost budget type to be integrated. You can enable top-down
integration for cost budget types only.
4. Control Flag - Enable the Control Flag check box. Budgetary controls must be enabled for
top-down integration.
5. Balance Type - For top-down integration, the Balance Type must be Encumbrance.
6. Non-Project Budget - Select General Ledger Funding Budget.
7. Levels - Select a default control level for each budget level. For top-down budget
integration, the system imposes absolute control at the project level for all encumbered
accounts.
8. Time Phase - Select an Amount Type and Boundary Code to be used when the system
calculates available funds.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 67
 Note: The project budget controls you set must be compatible with the funding budget
controls. The project budget controls must not allow a transaction to pass budgetary control if
the transaction will fail budgetary control validation against the funding budget. In general, the
project budget controls must be equal to or more restrictive than the funding budget controls.
Defining Top-Down Budget Integration for Project Templates and Projects:
1. Navigate to the Budgetary Control option of the Projects, Templates window.
2. Budget Type - Select a project cost budget type to be integrated.
3. Balance Type - Select Encumbrance.
4. Non-Project Budget - Select General Ledger Funding Budget.
5. Levels - Select a default control level for each budget level. For top-down budget
integration, the system imposes absolute control at the project level for all encumbered
accounts.
6. Time Phase - Select an Amount Type and Boundary Code to be used when the system
calculates available funds.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 68
Budget Integration: Implement Bottom-Up Integration

Budget Integration: Implement Bottom-Up Integration

Defining Bottom-Up Budget Integration for Project Types:
1. Navigate to the Budgetary Control tab for a project type.
2. Allow Override at Project Level - Check this check box to allow users to modify the
default budget integration settings at the project level.
3. Budget Type - Select a project budget type to be integrated.
4. Balance Type - For bottom-up integration, the Balance Type must be Budget.
5. Non-Project Budget - Select a General Ledger budget from the list of values.
For Bottom-Up Budgeting, all other budgetary control fields must be blank.
Defining Bottom-Up Budget Integration for Project Templates and Projects:
1. Navigate to the Budgetary Control option of the Projects, Templates window.
2. Budget Type - Select a project budget type to be integrated.
3. Balance Type - For bottom-up integration, the Balance Type must be Budget.
4. Non-Project Budget - Select a General Ledger budget from the list of values.
For Bottom-Up Budgeting, all other budgetary control fields must be blank.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 69
Practice - Create a Bottom-Up Integrated Budget
Overview
In this practice, you will create a project, set up bottom-up budget integration for the project,
enter a bottom-up integrated budget, and create a baseline budget version.

Assumptions
• Replace XX with the number that your instructor has assigned.

• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.

Prerequisite
If the submitted budgets remain in In Process status, then the instructor must submit the
concurrent program Workflow Background Process for the class:

• Responsibility: System Administration, Vision Services (USA)

• Submit the concurrent program Workflow Background with the parameters as specified
in the following table

Field Value
Item Type PA Budget Integration Workflow
Minimum Threshold Leave Blank
Maximum Threshold Leave Blank
Process Deferred Yes
Process Timeout Yes
Process Stuck Yes

Tasks
Create a Project

Use the responsibility Projects, Vision Service (USA). Copy the Service Center Template to
create a new project with the values as specified in the following table:

Field Value
Project Number XXService
Project Name XX Service Center
Project Manager Gray, Mr. Donald R.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 70
 Project Start Date Today's date
Project Completion Date One year from today

Define Bottom-Up Budget Integration

Use the information as specified in the following table to set up bottom-up budget integration for
your project:

Field Value
Budget Type Cost Budget - Needs Approval
Control Flag No
Balance Type Budget
Non-Project Budget BOTTOM-UP

Enter a Budget

Use the Cost Budget - Needs Approval budget type to enter a budget for your project. When
you create the budget, select Project by GL Period as the entry method and Expenditure
Category for the resource list. Enter budget lines as specified in the following table:

Resource Alias Amount Type Period 1 Period 2 Period 3 Period 4

Expenses Burdened Cost 2,000.00 2,000.00 2,000.00 2,000.00
Labor Burdened Cost 10,000.00 10,000.00 20,000.00 20,000.00
Chargebacks Burdened Cost 5,000.00 4,000.00 2,000.00 4,000.00
Material Burdened Cost 1,000.00 1,000.00 1,000.00 1,000.00

Your periods will depend on the dates of your project. For example, if your project started in
February 2007, then the first four periods listed would be FEB-07, MAR-07, APR-07, and
MAY-07.

Generate and View Budget Accounts

Use the Tools menu to generate and view budget accounting for your budget. Review the
accounts by budget line and by account.

Create the Budget Baseline

Submit the budget and create a baseline version. The budget status will become In Progress.
The budget is undergoing baseline processing. You can click the Find button on the Budgets
window to update the status information for the budget. Note that the budget did not require
approval because the project type of your project is not enabled to use Workflow for budget
status changes.

Use the Tools menu to monitor the budget processing and review funds check results.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 71
Solution - Create a Bottom-Up Integrated Budget
Create a Project

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Find Projects window.

• (N) Projects

3. Find the Service Center Template.

• Enter the find criteria:

− Number = T, Service
− Name = Service Center Template

• (B) Find

4. Select the Service Center Template on the Projects, Templates Summary window.

5. (B) Copy To...

6. Complete the fields on the Project Quick Entry window as specified in the following table:

Field Value
Project Number XXService
Project Name XX Service Center
Project Manager Gray, Mr. Donald R.
Project Start Date Today's date
Project Completion Date Two years from today

7. (B) OK

Define Bottom-Up Budget Integration

8. Select your new XXService project.

9. (B) Open

10. Select the Budgetary Control option.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 72
11. (B) Detail

12. Complete the fields on the Budget Integration window as specified in the following table:

Field Value
Budget Type Cost Budget - Needs Approval
Control Flag No
Balance Type Budget
Non-Project Budget BOTTOM-UP

The Levels and Time Phase regions do not apply to bottom-up integrated budgets.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 73
13. (I) Save

14. Close the open windows and return to the Navigator.

Enter a Budget

15. Navigate to the Budgets window.

• (N) Budgets

16. Find the budget draft.

• Enter the find criteria:

− Project Number = XXService
− Project Name = XX Service Center
− Budget Type = Cost Budget - Needs Approval

• (B) Find Draft

• (B) No (if you receive a message to save changes)

17. Enter the draft budget information as specified in the following table:

Field Value
Version Name Enter a name for the version
Change Reason Leave Blank
Description Leave Blank

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 74
 Entry Method Project by GL Period
Resource List Expenditure Category

18. (B) Details

19. Enter the budget lines as specified in the following table:

Resource Alias Amount Type Period 1 Period 2 Period 3 Period 4

Expenses Burdened Cost 2,000.00 2,000.00 2,000.00 2,000.00
Labor Burdened Cost 10,000.00 10,000.00 20,000.00 20,000.00
Chargebacks Burdened Cost 5,000.00 4,000.00 2,000.00 4,000.00
Material Burdened Cost 1,000.00 1,000.00 1,000.00 1,000.00

Your periods will depend on the dates of your project. For example, if your project started in
February 2007, then the first four periods listed would be FEB-07, MAR-07, APR-07, and
MAY-07.20.

20. (I) Save.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 75
Generate and View Budget Accounts

21. (M) Tools > Generate Budget Accounting

22. (M) Tools > Review Budget Accounting

23. (T) By Budget Line

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 76
24. (T) By Account

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 77
Create the Budget Baseline

25. Close the Budget Account Details window.

26. Close the Budget Lines window.

27. (B) Submit

28. (B) Baseline

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 78
 The budget status is now In Progress. The budget is undergoing baseline processing. You
can click the Find button on the Budgets window to update the status information for the
budget. Note that the budget did not require approval because the project type of your
project is not enabled to use Workflow for budget status changes. If the status remains In
Process, then see the Prerequisites section of this practice for further instructions.

29. Monitor the baseline processing.

• (M) Tools > Monitor Budget Workflows

• Review the information on the Monitor Activities History page

• (H) Close Window

30. View funds check results.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 79
 • (M) Tools > View Funds Check Results

31. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 80
Guided Demonstration - Transfer Budget Journal Entries to GL
Run Program to Transfer Journal Entries to Oracle General Ledger

The instructor will transfer the budget accounting to Oracle General Ledger for the entire class.

1. Responsibility = Projects, Vision Services (USA)

2. Navigate to the Submit a New Request window.

• (M) View > Requests

• (B) Submit a New Request

3. Select to run a Single Request.

4. (B) OK

5. Select the program PRC: Transfer Journal Entries to GL from the list of values in the Name
field and Vision Services for the operating unit.

6. Define the parameters for the program as specified in the following table:

Field Value
Process Category Budget
End Date Five month's from today
Post in General Ledger Yes
General Ledger Batch Name BottomUp

7. (B) OK

8. (B) Submit

9. (B) No in the Decision dialog box

10. Find your request.

• Select the All My Requests option button.

• (B) Find

11. Wait for the programs to finish.

• Use (B) Refresh Data to monitor the progress of the request processing.

The following programs run:

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 81
 − PRC: Transfer Journal Entries to GL
− Journal Import
− Posting: Single Ledger
− Subledger Accounting Balances Update

12. When the program is complete, close the Requests window and return to the Navigator.

View Budget Journal Entries

13. Switch your responsibility

• (M) File > Switch Responsibility

• Select General Ledger, Vision Services (USA)

• (B) OK

14. Navigate to the Find Journals window.

• (N) Journals > Enter

15. Find the journal entries.

• Enter the find criteria:

− Batch = %BottomUp%

• (B) Find

16. Review the journal entry details.

• Select one of the journal entries.

• (B) Review Journal

17. Close the open windows and return to the Navigator.

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 82
Summary

Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 83
 Copyright © 2007, Oracle. All rights reserved.

Appendix B: Budgetary Controls and Budget Integration

Chapter 19 - Page 84
 Summary of R12 Project
Costing Fundamentals
Chapter 20

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 1
 Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 2
Summary of R12 Project Costing Fundamentals

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 3
Objectives

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 4
Agenda

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 5
Defining Projects for Costing

Defining Projects for Costing

You can use Oracle Project Costing to collect costs associated with all of your project
activities. A project financial structure is a task tree showing the organization of project
activities. It can be as simple or detailed as you want it to be. There are no limits in width or
levels.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 6
Expenditures

Expenditures
An expenditure is a group of expenditure items, or transactions, that an employee or an
organization incurs or an expenditure period. You charge expenditures to a project to record
actual work performed or cost incurred. Oracle Project Costing uses these terms for
expenditures:
• Expenditure batch - A user-defined name used to track a batch of expenditures, such as
timecards and miscellaneous transactions.
• Expenditure - A group of expenditure items incurred by an employee or organization for
an expenditure period.
• Expenditure item - The individual transactions charged to a specific project and task
combination.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 7
Performing Cost Processing

Performing Cost Processing

Oracle Project Costing is an integrated cost management solution for all projects and activities
within an enterprise. Costing includes the following major steps:
1. Enter and approve expenditures through the Oracle Project Costing user interface, or
import unaccounted transactions.
2. Distribute costs and derive default accounting.
3. Generate cost accounting events.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 8
Performing Cost Processing

Performing Cost Processing

4. Create accounting in Oracle Subledger Accounting and transfer the accounting entries to
Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 9
Performing Cost Processing

Performing Cost Processing

5. Import final subledger journal entries in Oracle General Ledger.
6. Post journal entries in Oracle General Ledger.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 10
Accounting for Costs

Accounting for Costs

Oracle Project Costing creates many different accounting transactions throughout its business
cycle. You can use AutoAccounting to specify how to determine the correct account for each
transaction.
Oracle Project Costing generates accounting events and creates accounting in Oracle Subledger
Accounting. If you define your own detailed accounting rules in Oracle Subledger Accounting,
then Oracle Subledger Accounting overwrites default accounts, or individual segments of
accounts, that Oracle Project Costing derives using AutoAccounting.
The Account Generator uses Oracle Workflow to derive default account code combinations.
Oracle Payables and Oracle Purchasing use the Account Generator to determine the default
account code combinations for purchasing requisitions, purchase orders, supplier invoices, and
expense reports based on the project information entered.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 11
Burden Costing

Burden Costing
Burdening, also known as cost plus processing, is a method of applying one or more burden
cost components to the raw cost amount of each individual transaction to calculate burden
costs.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 12
Integration with Oracle Purchasing and Oracle Payables

Integration with Oracle Purchasing and Oracle Payables

Oracle Project Costing fully integrates with Oracle Purchasing and Oracle Payables and
enables you to enter project-related documents using those products. You can use both Oracle
Purchasing and Oracle Payables, or just Oracle Payables. In addition, you can use Oracle
iProcurement to enter project-related requisitions.
When you enter project-related transactions in Oracle Purchasing and Oracle Payables, you
enter project information on your source document. Oracle Purchasing, Oracle Payables, and
Oracle Project Costing carry the project information through the document flow: from the
requisition to the purchase order in Oracle Purchasing, to the supplier invoice in Oracle
Payables, and to the project expenditure in Oracle Project Costing. The accounting method for
your ledger determines when you can interface supplier costs to Oracle Project Costing.
Note: You can use Transaction Import in Oracle Project Costing to import accounted supplier
invoices directly into Oracle Project Costing from 3rd party systems.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 13
Integration with Oracle Internet Expenses

Integration with Oracle Internet Expenses

With Oracle Internet Expenses, employees and contingent workers can enter and submit
expense reports using a standard Web browser or a Web-enabled mobile device. Oracle
Workflow automatically routes expense reports for approval and enforces reimbursement
policies. Oracle Internet Expenses integrates with Oracle Payables to provide quick processing
of expense reports for payment.
You can create project-related expense reports using Oracle Internet Expenses. You send
expense reports entered in Oracle Internet Expenses to Oracle Payables and then to Oracle
Project Costing.
Note: You can enter expense reports containing project and task information in Oracle Internet
Expenses or Oracle Payables. Additionally, you can import fully-accounted project-related
expense reports into Oracle Project Costing from third-party systems using Transaction Import.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 14
Integration with Oracle Time & Labor

Integration with Oracle Time & Labor

Oracle Time & Labor integrates with Oracle Project Costing to enable employees and
contingent workers to enter and submit project-related timecards. Employees and contingent
workers enter their own time, which you can subject to an approval process according to your
business rules. You can transfer approved timecards to Oracle Project Costing, Oracle Payroll,
and Oracle Human Resources. After you import the timecards into Oracle Project Costing, you
cost the timecards and derive the default accounting using AutoAccounting. During cost
processing, the raw cost and any additional burden cost is calculated. Finally, you generate cost
accounting events and create accounting for the timecards in Oracle Subledger Accounting.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 15
Integration with Other Applications

Integration with Other Applications

Integration with Oracle Inventory
When you enter project-related transactions in Oracle Inventory, you enter the project
information on the source transaction. Oracle Inventory and Oracle Project Costing carry the
project information through from the Issue To or Receipt From transaction in Oracle Inventory
to the project expenditure in Oracle Project Costing.
Integration with Oracle Project Manufacturing
When used as a part of the Oracle Project Manufacturing functionality, Oracle Project Costing
acts as a cost repository for manufacturing-related activities.
Integration with Oracle Asset Tracking
Oracle Asset Tracking is a fully integrated solution in the Oracle E-Business suite designed to
deploy and track internal products and assets at internal or customer sites, while providing the
ability to automatically capture financial transactions. You can create project-related purchase
orders linked to Oracle Asset Tracking and import tracked items and cost into Oracle Project
Costing. You can also generate asset lines for non-depreciable tracked items and interface the
asset lines to Oracle Assets to create assets.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 16
Allocations and AutoAllocations

Allocations and AutoAllocations

The allocations feature can distribute amounts between and within projects and tasks, or to
projects in other organizational units. For example, you can distribute amounts such as salaries,
administrative overhead, and equipment charges across several projects and tasks. Your
allocations can be as simple or elaborate as you like.
AutoAllocations provide the ability to generate allocations more efficiently. You can group
processes and run them in a specified sequence or at the same time. AutoAllocations is an
Oracle General Ledger and Oracle Project Costing feature. In Oracle General Ledger, the
allocation definition is called a batch. In Oracle Project Costing, the allocation definition is
called a rule.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 17
Asset Capitalization

Asset Capitalization
Using capital projects, you can define capital assets and capture construction-in-process (CIP)
and expense costs for assets you are creating. When you are ready to place assets in service,
you can generate asset lines from the CIP costs and send the lines to Oracle Assets for posting
as fixed assets. You use capital projects to capture the costs of capital assets you are building,
installing, or acquiring.
You can also define retirement adjustment assets and capture cost of removal and proceeds of
sale amounts (collectively referred to as retirement costs, retirement work-in-process, or
RWIP) for assets you are retiring that are part of a group asset in Oracle Assets. When your
retirement activities are complete, you can generate asset lines for the RWIP amounts and send
the lines to Oracle Assets for posting as adjustments to the accumulated depreciation accounts
for the group asset that corresponds to each asset.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 18
Asset Capitalization: Capitalized Interest

Asset Capitalization: Capitalized Interest

Capitalized interest (also referred to as Allowance for Funds Used During Construction) is an
estimate of the interest cost that enterprises incur when they invest in long-term capital
projects. Subject to accounting rules and regulatory guidelines, enterprises can capitalize
interest as part of the total cost of acquiring and constructing assets that require an extended
amount of time to prepare for their intended use.
To accommodate this business requirement, Oracle Project Costing enables you to calculate
and record capitalized interest for capital projects. To meet the requirements of regulated
businesses such as those in the utilities industry that can recognize multiple types of capital
interest, you can set up Oracle Project Costing to separately calculate capitalized interest for
multiple interest types such as debt and equity.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 19
Cross Charge

Cross Charge
When projects share resources within an enterprise, it is common to see those resources shared
across organization and country boundaries. Further, project managers can also divide the work
into multiple projects for easier execution and management. The legal, statutory, or managerial
accounting requirements of such projects often present complex operational control, billing,
and accounting challenges. Cross charge enables project managers to easily view the current
total costs of the project, regardless of who performs the work or where it is performed.
You can choose one of the following processing methods for cross charge transactions:
• Borrowed and Lent Accounting
• Intercompany Billing Accounting
• No Cross Charge Process

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 20
Budgetary Controls and Budget Integration

Budgetary Controls and Budget Integration

Budgetary Controls
You can enforce budgetary controls against a GL budget and a project cost budget. Budgetary
controls enable you to monitor and control expense commitment transactions. Expense
commitment transactions are transactions for non-inventory items. Oracle Project Costing
enforces budgetary controls for:
• Project-related purchase requisitions and purchase orders entered in Oracle Purchasing
• Contingent worker purchase orders entered in Oracle Purchasing
• Supplier invoices entered in Oracle Payables
• Project-related prepayments not matched to a purchase order and the application of
unmatched prepayments to supplier invoices
Budget Integration
Oracle Project Costing budget integration features enable you to integrate project budgets with
non-project budgets in Oracle General Ledger. Integration is defined in order to perform
bottom-up or top-down budgeting.

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 21
Agenda

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 22
Oracle Projects Fundamentals Learning Path

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 23
Summary

Copyright © 2007, Oracle. All rights reserved.

Summary of R12 Project Costing Fundamentals

Chapter 20 - Page 24