Understanding Asset Retirement

This topic discusses:

  • Manual asset retirement.

  • Asset retirement for work order-managed project activities.

  • Proceeds from sale and cost of removal.

Asset retirement is a method of indicating that an asset is being removed from service. There are two kinds of retirement—partial and full. In partial retirement only a certain portion of the asset is retired. In full retirement the full value of the asset is retired. You can partially or fully retire assets that are managed in PeopleSoft Project Costing by using the Asset Retirement Integration Application Engine process (PC_RETIRE_AM).

Project Costing-managed project is a term that refers to a project that is managed by a project manager in PeopleSoft Project Costing, instead of with work orders in PeopleSoft Maintenance Management. You must use the manual asset retirement process to retire assets if PeopleSoft Maintenance Management is installed and the project is a Project Costing-managed project. You must also use the manual asset retirement process to retire assets if PeopleSoft Maintenance Management is not installed.

Retirement Process Flow - Project Costing-Managed Project Activities

The process flow for retiring assets for Project Costing-managed project activities is:

  1. Create a retirement project

    On the Asset Integration Rules page, select the Enable Integration option and an integration type of Retirement.

    Note: If a project has a retirement integration type, then all of the project's activities must also have a retirement integration type.

    You must select the Manual Identification option on the Asset Integration Rules page for projects and activities to be eligible for asset retirement.

  2. Accumulate transaction costs.

    Transactions with analysis types in the PC to AM Cost of Removal (AMCOR) and AM Proceeds from Sale (AMPFS) analysis groups are eligible for processing to PeopleSoft Asset Management.

  3. Assign transactions to assets.

    Use the Assign Transactions to Assets page for projects that have an asset identification rule of Manual Identification on the Asset Integration Rules page.

  4. Use the Asset Retirement page to run the Asset Retirement Integration process to:

    • Send the asset cost value, cost of removal, and proceeds from sale, to PeopleSoft Asset Management.

    • Update the AM Distribution Status field (AM_DISTRIB_STATUS) to D (distributed) in the Project Transaction table, indicating the transaction rows have been distributed to PeopleSoft Asset Management and cannot be updated in the Project Transaction table.

Note: The Asset Retirement Integration process does not use the PC to AM Staging table. The transactions go directly to the PeopleSoft Asset Management Loader tables.

You can use the Express Retirement process to fully retire assets that are associated with work order-managed projects. You cannot partially retire assets that are associated with work orders.

For project assets to be eligible for the Express Retirement process, you must:

  • Select the Work Order Managed Project option for the project, and change the project processing status to Active, on the Project Definition - General Information page.

  • Establish express asset filter criteria for the business unit on the Express Asset Filter Criteria page.

  • Select Derive from Work Order Task for the project in the Asset Identification group box on the Asset Integration Rules page.

  • Accumulate costs in PeopleSoft Project Costing directly (using online transaction entry in Project Costing) or indirectly (from feeder systems such as PeopleSoft Payables, Expenses, and Inventory).

You can retire an asset only once. If the same asset is assigned to multiple work order tasks, the Work Order Close Application Engine process (WM_CLOSE) restricts the system from processing two retirements for the same asset.

Retirement Process Flow - Work Order-Managed Projects

The process flow for retiring assets for work order-managed project activities is:

  1. Close the work order task.

    PeopleSoft Maintenance Management determines if the asset that is associated with the work order task is already retired, or if it is tagged for retirement in the Asset Management Loader table (INTFC_FIN). If either of these conditions exist, the Work Order Close process will not proceed for this work order task.

    Alternatively, you can retire the asset using the Asset Retirement Integration process.

  2. PeopleSoft Maintenance Management updates these values for the project activity in the Asset Integration Defaults group box on the Asset Integration Rules page:

    • Selects the Enable Integration flag.

    • Selects an integration type of Retirement.

    • Enters a value for filter ID.

  3. The work order closed status triggers the Express Retirement process and indicates to the system that the project activity is ready to process.

  4. The Express Retirement process:

    1. Determines the assets, which are associated with work order-managed project activities in the Project Transaction table, to send to PeopleSoft Asset Management based on defined rules and criteria.

    2. Stamps Project Transaction table rows (cost of removal or proceeds from sale) with asset information.

    3. Calls the Asset Retirement Integration process.

You can submit an asset for retirement only once if you use the Express Retirement process. For example, assume that two work order tasks are associated with the same asset. When you close just one of the work order tasks, the Work Order Close process triggers the Express Retirement process to retire the asset.

Alternatively, you can enter adjustments directly in PeopleSoft Asset Management for assets that are distributed from PeopleSoft Project Costing to Asset Management.

Expenses

Expenses that are booked against work order-related projects interface with PeopleSoft Project Costing; however, PeopleSoft Expenses does not maintain work order-related fields. These transactions are not included in the Express Asset Retirement Integration process unless you manually update the transactions in PeopleSoft Project Costing with the work order-related fields.

You can, however, include expenses transactions in asset retirement for projects that are actively managed in PeopleSoft Project Costing.

By using the Asset Retirement Integration process you can send the cost of removing an asset or the proceeds from selling an asset to PeopleSoft Asset Management at the time that you retire the asset, or after you retire the asset. Transactions are eligible for the retirement process if they are assigned to the asset on the Assign Transactions to Assets page, and the analysis type belongs to the PC to AM Cost of Removal (AMCOR) or AM Proceeds from Sale (AMPFS) analysis groups. Transactions with analysis types in the AMCOR analysis group post to PeopleSoft Asset Management as a transaction removal cost. Transactions with analysis types in the AMPFS analysis group post to PeopleSoft Asset Management as proceeds from sale.

To send costs for removing an asset or the proceeds from selling an asset to PeopleSoft Asset Management, assign transactions to the asset and use the Asset Retirement page to retire the asset. The asset's quantity and retirement quantity determine what proportion of the asset's cost is calculated as the retirement amount. For example, assume that the asset's quantity is 2 and you enter a value of 1 as the retirement quantity on the Asset Retirement page. The retirement quantity is 50 percent of the asset quantity, and the system uses this percentage to calculate the asset's retirement amount. If the cost is 500.00, the retirement amount is calculated as 50 percent of 500.00, which is 250.00. These calculations appear in the following table:

Quantity

Retirement Quantity

Percentage

Cost

Retirement Amount

2

1

50%

500.00

250.00

You can also send the cost of removing an asset and the proceeds from selling an asset to PeopleSoft Asset Management after the asset is retired from PeopleSoft Project Costing. For example, assume that on January 1 you retire Asset 123 from PeopleSoft Project Costing with a cost value of 2,240.00, cost of removal of 5,435.00, and proceeds from sale of 1500.00. On January 2 through 6, transaction costs that are eligible for cost of removal accumulate in the Project Transaction table totaling 7500.00. You can assign the transactions to the asset and use the Asset Retirement page to send the transactions to PeopleSoft Asset Management.