Construction-in-Process Assets

A construction-in-process (CIP) asset is an asset you construct over a period of time, which hasn't yet been placed into service.

Remember the following points when creating CIP assets:

You create and add expenses to your CIP assets as you incur expenses for construction costs including raw materials and labor.
CIP assets don't depreciate, because they aren't yet in use.
When a CIP asset is completed, you place it in service and it begins depreciating.

Track CIP Assets

You can track CIP assets in one of two ways:

Track detailed information about your CIP assets in Oracle Project Costing. If you use Project Costing to track CIP assets, you don't need to track them in Oracle Assets.
Use the asset key to group and track your CIP assets in Assets. You can use the asset key to track each CIP asset by some identifying keyword, such as project name or number.

Note: If you use Project Costing to track CIP assets, you don't need to also track them in Assets.

You can set up Assets to automatically copy CIP assets to a tax book when you add a CIP asset to your corporate book.

When setting up this option, remember the following points:

When you capitalize these CIP assets in your corporate book, they're automatically capitalized in your tax book, even if the corporate and tax books are in different accounting periods.
After you allow Assets to automatically add CIP assets to your tax book, all CIP assets you add to your corporate book will automatically be added to your tax book at the same time.
If you allow CIP assets to be copied to your tax books and then change the option, the assets already copied remain in the tax book. These copied assets are capitalized when their original assets are capitalized in the corporate book.
If the accounting periods in your corporate and tax books aren't in the same fiscal year, and you add and capitalize a CIP asset in the corporate book, the same CIP asset may be added and capitalized in a different fiscal year in the tax book.
Although CIP assets can now appear in your tax books, you can't perform any transactions directly to CIP assets in tax books. You can only perform transactions on CIP assets in your corporate book, and these transactions will automatically be replicated to the tax book.

Capitalize CIP assets when you're ready to place them in service.

When capitalizing an asset, Assets makes the following updates to the asset:

Changes the asset type from CIP to Capitalized
Changes the date placed in service to the date you enter
Sets the cost to the sum of all source lines for the asset
Defaults the depreciation rules from the asset category
Creates an addition transaction for an asset you added in a prior period or changes the CIP addition transaction to an addition for an asset you added in the current period

You can reverse capitalize an asset only in the period you capitalized it, and only if you didn't perform any transactions on it.

When reverse capitalizing an asset, Assets makes the following updates to the asset:

Changes the asset type from Capitalized to CIP
Changes the addition transaction to an addition and void transaction for an asset you added in a prior period, or changes the addition transaction to a CIP addition for an asset you added in the current period.
Creates a CIP reverse transaction for assets you capitalized in a prior period

Note: The date placed in service is unchanged.