Processing Allocations With Fund Accounting

When an educational or governmental entity acquires a capital asset, the transaction is usually accounted for as a budgeted or funded acquisition. Other programs within PeopleSoft provide the tools to perform budget checking, such as in the Purchase Order and Accounts Payable transaction processing. After the transaction to acquire the asset is completed, PeopleSoft Asset Management creates ongoing depreciation transactions. It is important that the asset depreciation entries do not inherit the original budget reference during creation of period depreciation entries because the original budget reference is not appropriate for future year's depreciation.

For example, assume that the current financial year is 2008 with budget year of 2007. An asset was added on 01/01/2005 with a budget year of 2005. All of the depreciation rows for 2008 are created with the budget year of 2005. When the depreciation entries for 2008 are posted to the general ledger, they have an incorrect budget year of 2005.

To accommodate the use of budget or fund accounting in PeopleSoft Asset Management, it is recommended that you use the allocation process to reallocate the depreciation and other transactions to the active budget reference and year. This program is run after the accounting entry creation process and depreciation close process have been run.