Understanding Asset Retirement and Component Changeout in PeopleSoft Maintenance Management

This chapter discusses:

• Asset retirement in PeopleSoft Maintenance Management.

• Component changeout in PeopleSoft Maintenance Management.

Asset Retirement in PeopleSoft Maintenance Management

During the course of an organization's operations, physical assets deteriorate and are ultimately retired when the cost of maintaining the asset exceeds the cost of disposing, retiring, and replacing the asset. Depending on the size and complexity of the asset, an organization may need to demolish and remove it during the retirement process, and possibly sell , auction, or donate the asset. You can retire an asset directly in PeopleSoft Project Costing without using Oracle's PeopleSoft Enterprise Maintenance Management. While this process is useful for the partial retirement of assets, it requires substantial user intervention and time. To expedite the full retirement of an asset, however, you can create a work order and identify the asset action as Retire for the work order task in PeopleSoft Maintenance Management. PeopleSoft Maintenance Management triggers a process in PeopleSoft Project Costing to automatically perform a full retirement of the asset with little or no user involvement.

In PeopleSoft Maintenance Management, the two methods for retiring an asset using a work order are:

• Retire an asset using a work order associated with a work order-managed project.

• Retire an asset using a work order associated with a Project Costing-managed project.

Specific rules apply to the retirement of an asset in PeopleSoft Maintenance Management:

• PeopleSoft Maintenance Management only performs full retirement financial assets.

• You must set up the Work Order Management options in the Asset Management business unit Interface Options page.

• If the asset is marked Retire in PeopleSoft Maintenance Management, then it will be retired from PeopleSoft Maintenance Management.

• PeopleSoft Project Costing processes the cost of removal based on the retirement filter set up in PeopleSoft Project Costing.

See Also

Retiring Financial Assets

Establishing PeopleSoft Asset Management Business Units

Integrating Asset Management with Maintenance Management

Asset Retirement Using a Work Order Associated with a Work Order-managed Project

When you create a work order task associated with a work order-managed project to retire an asset, there are basic setup requirements:

• Set up the work order-managed project in PeopleSoft Project Costing.

• Set up the filter rules and criteria for the Project Costing business unit.

• Set up project activity in PeopleSoft Project Costing to derive the asset identification from the work order. The user can enter the filter in the Work Order Task Accounting page, which is updated in PeopleSoft Project Costing when you perform a batch close of the work order (WM_CLOSE).

Asset retirement workflow:

1. Create a work order in PeopleSoft Maintenance Management.

2. Create a work order task in PeopleSoft Maintenance Management for a work order-managed project.

   The project activity is automatically generated.

3. Select Retire as the asset action for the work order task and select the labor, inventory, purchased and on-hand materials, and tools required for the removal, and then execute the work order task.

4. Change the work order task status to complete.

   This action updates the asset integration rules and the status for the activity in PeopleSoft Project Costing to Retirement.

   This action updates PeopleSoft Asset Management for processing asset transactions and creates staging information for PeopleSoft Asset Management to process. The retirement of the asset is completed by the PeopleSoft Asset Management transaction loader process.

5. Close the work order.

   This process triggers PeopleSoft Project Costing to send the costs of transaction related to retirement to PeopleSoft Asset Management.

Asset Retirement Using a Work Order Associated with a Project Costing-managed Project

An organization normally creates a project in PeopleSoft Project Costing that involves the retirement of large-scale assets. Usually these projects can last more than a few days, involve multiple assets, and entail a complex effort that must be actively managed. Project managers can create work orders from PeopleSoft Project Costing that authorize work order tasks that involve the demolition and removal of assets.

When a work order is created from a Project Costing-managed project to retire an asset, the user selects the asset action Retire for a work order task on the Requirements page or the Schedules page of the work order, selects the Retirement radio button and the retirement filter directly in PeopleSoft Project Costing. The work order does not drive the cost of the transaction for this type of retirement. Instead the costs are sent directly to PeopleSoft Project Costing without closing the work order. PeopleSoft Project Costing integration rules determine when to send the cost of retirement from PeopleSoft Project Costing to PeopleSoft Asset Management.

Component Changeout in PeopleSoft Maintenance Management

A component changeout involves the swapping of asset components when the failure or replacement of a component is required to maintain a parent asset and extend or retain a parent asset's useful life. You replace a component with a like component. The characteristics and attributes of the new component are associated with the parent asset.

Specific rules apply to a component changeout:

• A component changeout only applies to capitalized child financial assets. You must update changeouts of smaller, non-financial assets directly in PeopleSoft Asset Management.

• A replacement component must have the same asset profile as the components being replaced.

• A replacement component inherits the asset custodian, location, parent asset, and ChartField designation of the replaced component.

• You can mark each asset as repairable or not repairable in PeopleSoft Asset Management, which means that an asset is repaired or overhauled for use in another asset in the future.

• You must establish the default ChartField mapping rules necessary to accommodate asset component changeout transfers in the PeopleSoft Asset Management warehouse on the Warehouse Mapping page.

• Warranties apply to assets involved in a component changeout as they do for all assets on other work order transactions.

To perform a component changeout:

1. Remove the asset component. (Task 1)

   As part of the removal process, you can:

   • Update the asset disposal information on Work Order Task Accounting page.

   • Retire the asset component. Retirement can have various methods of disposal, such as the selling of an asset.

   • Remove the asset for reuse. (Send it back to the Asset Repository.)

     If the asset is marked repairable, when you select Remove for the asset action, you can select a check box indicating that the asset needs repair. (This check box only appears if the asset is marked as repairable in PeopleSoft Asset Management.) When the check box is selected and the work order task is completed, PeopleSoft Maintenance Management notifies PeopleSoft Asset Management that the asset needs repair.

2. Install another asset component to replace the one that was removed. (Task 2)

   When you select the asset action Install, the Asset Action: Install page displays where you can indicate that this is a replacement. You identify the parent component into which you are installing the new component and select the removed component. If the component was removed using a different work order, the work order ID displays along with a description of the removal. You can select an asset that is marked for removal or an asset that is marked for retirement to indicate which asset is being replaced.

Additional rules and principles that apply to component changeouts include:

• You can use two work orders to remove and then install a component, or you can create two work order tasks. You can add the work order task to install a component as long as the task to remove a component is not marked complete.

• Spare parts can be defined as nonfinancial assets in the asset repository. If these parts are used in the performance of a component changeout, the costs do not flow into PeopleSoft Project Costing. If a nonfinancial component is required to repair a component and you want the costs to flow ti PeopleSoft Project Costing, then you must set the nonfinancial asset up as either an inventory or noninventory item.

• If you select parts to repair an asset and the part is not a capitalized (financial) asset in PeopleSoft Asset Management, then it is treated like any other inventory or noninventory part used to repair an asset. This is not treated as component changeout.

• If a technician removes an inventoried item during a repair, then the inventory personnel must use Express Putaway in PeopleSoft Inventory to enter the part into stock and also must put the part in an inventory storage area location identified as nonnettable if the part is damaged or not available for use. Typically parts that need repair are stored in a nonnettable location so that the quantity does not affect the available quantity.

• You can create a work order without a target asset to capture the costs of the labor and parts needed to repair the inventoried part. Once you repair the part, inventory personnel can move it to a nettable storage area location for reuse.

• For inventoried parts that you remove from an asset so that you can repair the parts, you probably want to enter them in PeopleSoft Inventory under a new item ID and identify then as non-cost items. Identifying the items as non-cost items ensures that when and if you issue the refurbished item to a work order, it will not result in an expense transaction, since the part was previously accounted for in a prior financial transaction.

See Also

Understanding Inventory Material Storage Structures

Component Changeout to Remove and Install Assets

When a work order task is used to remove or install an asset, the processing works the same way it does for any other work order task. The costs of removing or installing the component are sent to the feeder systems (Inventory, PeopleSoft Payables, PeopleSoft Payables, and PeopleSoft Project Costing (tools transaction), which generate the accounting entries that are sent to PeopleSoft Project Costing.

When the status of the removal , retirement, or the install task is changed to Complete the work order sends data to PeopleSoft Asset Management. When the work order task is closed, the Cost Summarization process is run automatically and the actual costs are sent from PeopleSoft Project Costing PeopleSoft Maintenance Management.