Cost Accrual Calculation using Billing Extensions
Oracle Projects provides an example billing extension in which the cost accrual amounts are calculated. This example is called the Cost Accrual Billing Extension.
Figure 1 - 39 shows the calculation used in the example billing extension.
You must decide some of the inputs to this extension:
- Budget Amounts. You specify which cost and revenue budget types to use in the calculation on the billing extension definition. If you do not specify values, the budget types Approved Cost Budget and Approved Revenue Budget are used. The last baselined budget version of the specified budget types are used. See: Billing Extensions.
- Cost Amounts for WIP. You determine whether to base your cost accrual on the budgeted raw cost or the budgeted burdened costs. You specify this on the definition of the billing extension. This also defines what cost amounts are accounted for as cost WIP. You must setup your AutoAcccounting rules to account for the appropriate cost amounts as cost WIP.
- Event Types to use for Events. You specify which event types to use when creating the events which result in the Cost Accrual, Cost Accrual Contra, and reversing Cost WIP entries.
Designing a Cost Accrual Billing Extension
Following are some facts to consider when you are using the example cost accrual billing extension.
- In the calculation in Figure 1 - 39, there is no relationship between the costs entered in the system and the cost accrual amounts generated by the Cost Accrual Billing Extension during the life of the project. The cost accrual amounts are calculated based on the actual accrued revenue, the budgeted cost amounts, and the budgeted revenue amounts.
- If the result of the formula in Figure 1 - 39 is zero or less than zero, no event is created. Cost accruals cannot be negative.
- If the budgeted costs are greater than the budgeted revenue amounts (the project is incurring a loss), then the accumulated cost accrual will be greater than the accumulated accrued revenue.
- Events are created at the funding level (project or top task).
- The billing extension example creates events that use only one account for each of the corresponding buckets: Cost Accrual, Cost Accrual Contra, and Cost WIP (for the reversing entries at project closing).
