Before you Begin

This 50-minute tutorial shows you how to plan for capital assets using capital projects in EPM Planning Capital and EPM Planning Projects. The sections build on each other and should be completed sequentially.

Background

Planning provides five complete, planning and budgeting solutions for Financials, Workforce, Capital, Projects, and Strategic Modeling. They include built-in best practice predefined content including forms, calculations, dashboards, drivers, and key performance indicators (KPIs).

With Capital, you can manage, prioritize, and plan for capital expenses. Capital helps decision-makers and front-line managers communicate throughout the request, justification, review, and approval process.

With Projects, you can bridge the gap between project planning systems and the financial planning process. You can assess the impact organizational projects and initiatives have on overall corporate resources and ensure they align with short and long term financial targets.

With Capital and Projects, you can:

  • Create Capital Projects that manage capital investments; used by companies that invest in capital assets. For example, a company building a new facility can manage costs, labor, equipment, and so on to manage capitalization of assets.
  • Create single or multiple assets from projects.
  • Manage detailed cost in Projects and asset cost pushed to Capital.
  • Assign equipment to Projects from Capital assets.
  • Review Capital Work In Progress values from the project.

You can plan for Capital Assets with Capital Projects using one of the following options:

  1. Create a Capital Project, load costs and Expenses in Projects, and plan for asset capitalization in Projects.
  2. Create a Capital Project, assign and manage assets for the project in Capital.

In this tutorial, you perform Capital Asset Planning with Capital Projects using both options.

What Do You Need?

An EPM Cloud Service instance allows you to deploy and use one of the supported business processes. To deploy another business process, you must request another EPM Enterprise Cloud Service instance or remove the current business process.

  • Have Service Administrator access to an EPM Enterprise Cloud Service instance. The instance should not have a business process created.
  • Upload and import this snapshot into your instance.
  • Download this file (sample_doc.docx) and save it to a local folder.

Note:

If you run into migration errors importing the snapshot, re-run the migration excluding the HSS-Shared Services component, as well as the Security and User Preferences artifacts in the Core component. For more information on uploading and importing snapshots, refer to the Administering Migration for Oracle Enterprise Performance Management Cloud documentation.

Reviewing and Assigning Values to User Variables

User Variables were added when the business process was created. User variables act as filters in forms, enabling planners to focus only on certain members. In this section, you review and set values for user variables.

  1. On the home page, click Tools, and then User Preferences.
    User Preferences
  2. On the left, click User Variables.
    User variables
  3. Review the selected members for each user variable:
    User Variable Member
    Currency USD
    Entity Operations US
    Reporting Currency USD
    Scenario Plan
    Version Working
    Years FY21
  4. For Entity, click its Member Selector (Member Selector) to open the Select Member dialog.
  5. In Select Member, locate and select Manufacturing US and click OK.
  6. Verify your selections and click Save.
    User variables with selected Members
  7. At the information message, click OK.
    Information message
  8. On the upper-right of the page, click Home (Home).

Creating Capital Projects

To plan for Capital Assets with Capital Projects, you create two (2) Capital Projects to facilitate the two (2) options.

  1. From the home page, click Projects, and then Project Summary.
    Go to Project Summary
  2. From the vertical tabs on the left, click Capital Projects (Capital).
    Go to Capital

    The Capital Projects Overview dashboard is displayed.

    Capital Projects Overview
  3. In the POV, for Project, verify that Capital Projects is selected.
  4. From the horizontal tabs at the bottom, click Project Details.
  5. In the grid's whitespace, right-click and select Add Project.
    Add Project
  6. In Add Project, enter the following details:
    Property Value
    Enter Project Name Utrecht Plant
    Enter Project Description New Facility in Utretcht
    Enter Project Start Date 9/1/21
    Enter Project End Date 12/31/21
  7. Verify your entries and click Launch.
    Adding project details
  8. At the information message, click OK.
    Information message

    The project is listed on the form.

    Project listed on the form
  9. On the next row, right-click and select Add Project.
    Add another project
  10. In Add Project, enter the following details:
    Property Value
    Enter Project Name UK Assembly Unit
    Enter Project Description UK Assembly Unit
    Enter Project Start Date 5/1/21
    Enter Project End Date 11/30/21
  11. Verify your entries and click Launch.
    Adding project details
  12. At the information message, click OK.
    Information message

    The added project is listed on the form.

    Projects listed on the form

Capital Asset Planning in Projects

In this section, you plan for capital assets in Projects.

Entering Project Expenses

  1. From the cards on the top of the page, click Expense.
    Expense card
  2. In Expense Overview, for Project in the POV, select Utrecht Plant and click Go (Go).
    POV
  3. From the vertical tabs on the left, click Direct Input (Direct Input).
    Go to Direct Input
  4. In Expense Direct Entry, for Project in the POV, verify that Utrecht Plant is selected.
  5. In the grid area, select or enter the following assumptions and expense amounts:
      Expense Type
    Assumptions    		 Direct Expense Amount
    Year Total
    Line 1 Labor Expense 1,500,000
    Line 2 Material Expense 2,000,000
    Line 3 Travel Expense 250,000
    Line 4 Miscellaneous Expense 150,000
  6. Verify your selections and click Save.
    Direct Expenses
  7. At the information message, click OK.
    Information Message

    Data is saved to the application.

    Calculated data
  8. Right-click the first header cell in the grid and select Calculate Expenses.
    Calculate Expenses

    The calculation takes a moment to complete.

    Calculation status
  9. At the information message, click OK.
    Information message
  10. From the vertical tabs on the left, click Review Project Expense (Review Project Expense).
    Go to Review Project Expense
  11. From the horizontal tabs at the bottom, click Project Expense.
    Go to Project Expense
  12. Review the expense summary for the Utrecht Plant project.
    Project expense summary

Capitalizing Expenses

For capital projects, you can allocate project expenses either partially or in full to one or more assets.

The capitalized assets are then pushed from Projects to Capital.

  1. From the cards on the top of the page, click Project Summary.
    Go to Project Summary
  2. From the vertical tabs on the left, click Capital Projects (Capital).
    Go to Capital

    The Capital Projects Overview dashboard is displayed.

    Capital Projects Overview
  3. From the horizontal tabs at the bottom, click Project Capitalization.
  4. Verify that the POV selection for Project is set to Utrecht Plant.
    POV
  5. Review the Project Capitalization dashboard.
    • In Total Project Expenses, expand members to display detailed expenses.
    • In Allocate Expense to Asset, notice that the form is editable. You can select a project expense you want to capitalize, and then select the corresponding capital expense account. Also select the asset class where you plan the expense to be capitalized.
    • The Capital Work in Progress Assets form is updated with the capitalized projects. You can add details for each capitalized asset and specify the planned in service date, which drives the depreciation and other expense calculations.
  6. In Allocate Expense to Asset, select or enter the following details:
      Project Expenses Capital Expenses Capitalization Asset Class Asset Details
    Line 1 Labor Expense Acquisition Costs 60% Buildings CIP Asset 1
    Line 2 Labor Expense Acquisition Costs 40% Machinery and Equipment CIP Asset 1
    Line 3 Material Expense Acquisition Costs 15% Buildings CIP Asset 1
    Line 4 Material Expense Acquisition Costs 85% Machinery and Equipment CIP Asset 1
    Line 5 Miscellaneous Expense Acquisition Costs 50% Buildings CIP Asset 1
    Line 6 Travel Expense Acquisition Costs 50% Machinery and Equipment CIP Asset 1

    In this step, you allocate project expenses, partially or fully, to multiple asset classes. For example, labor expense is distributed between two asset classes to fully allocate the acquisition costs: 60% for Buildings, and 40% for Machinery and Equipment. In the case of travel expenses, a partial allocation of 50% is set for Machinery and Equipment.

  7. Verify your selections, and then click the form's Save (Save) icon.
    Capitalization of expenses

    After saving, the Capital Work in Progress Assets form now includes the two (2) new assets: Machinery and Equipment, and Buildings. The Acquisition Costs are based on the allocated amount to these assets.

    Project Capitalization dashboard with data updated
  8. For both assets in the Capital Work in Progress Assets form, enter a planned inservice date:
    Asset In Service Date
    Machinery and Equipment 1/1/22
    Buildings 1/1/22

    Data on the Capital Work in Progress Assets form is from the Capital module. The In Service Date refers to when an asset is first placed in use, and included in capital asset calculations. The In Service Date also determines the point when an asset is ready for use and depreciation on the asset begins.

  9. Verify your selections, and then click the form's Save (Save) icon.
    Adding an inservice date
  10. At the information message, click OK.
    Information message
  11. On the upper-right area of the dashboard, click Save (Save).

    The updated data is saved to the forms.

    Save dashboard
  12. At the information message, click OK.
    Information message
  13. On the upper-right of the page, click Home (Home).

Calculating Depreciation

  1. From the home page, click Capital, and then Investments.
    Go to Capital Investments
  2. From the vertical tabs on the left, click Go to New Asset Planning (New Asset Planning).
    New Asset Planning
  3. From the horizontal tabs at the bottom, click New Assets from Projects.
  4. In CIP Assets, verify that Utrecht Plant is selected from the dropdown.
  5. In the CIP Assets grid, review the two (2) Capital in Progress assets displayed on the form.
    New Assets from Projects
  6. In the grid, right-click Machinery and Equipment, then select Calculate Depreciation.
    Calculate Depreciation for Machinery and Equipment
  7. At the information message, click OK.
    Information message

    You can view the profit and loss impact of depreciation and other expenses from the selected asset class and project in the Profit and Loss Impact dashboard.

    Profit and Loss Impact
  8. After reviewing the Profit and Loss Impact dashboard, select the following from its dropdown list and click Go (Go)::
    • Buildings as the Asset Class
    • Utrecht Plant as the Project
  9. In the CIP Assets grid, right-click Buildings, then select Calculate Depreciation.
    Calculate Depreciation for Buildings
  10. At the information message, click OK.
    Information message

    You can review the profit and loss impact of depreciation and other expenses from the selected asset class and project in the Profit and Loss Impact dashboard.

    Profit and Loss Impact
  11. From the horizontal tabs at the bottom, click Capital Work in Progress.
  12. In Capital Work in Progress, review the dashboard for information on capitalized projects.
    Capital Work in Progress

Capital Asset Planning in Capital

Adding Assets to a Capital Project

  1. From the horizontal tabs at the bottom, click New Asset Detail.
  2. In the POV, select the following and click Go (Go):
    • Machinery and Equipment as the Asset Class
    • UK Assembly Unit as the Project
    POV
  3. In the grid's whitespace, right-click and select Add New Asset.
    Adding new assets
  4. In Add Asset, select or enter the following asset details:
    Detail Value
    Description Assembly Unit
    Priority High
    Asset Units 1
    Asset Rate 12500000
    Salvage Value 250000
    Capacity UOM Each
    Purchase Date 9/1/2021
    In Service Date 11/1/2021
    Physical Location Location 1
    Asset Name Assembly Unit
  5. Verify your selections and click Launch.
    Add asset dialog
  6. At the information message, click OK.
    Information message

    The asset is displayed on the form.

    Asset displayed on the form

    You can modify asset details directly on the form.

  7. For the Assembly Unit, modify the Asset Rate. Set the value to 1,250,000 and click the form's Save (Save) icon.
    Modifying the asset rate
  8. At the information message, click OK.
    Information message
  9. On the upper-right area of the dashboard, click Save (Save).
  10. At the information message, click OK.
    Information message

    The updated data is saved.

    Updated data is saved.

Calculating Asset Costs

  1. In the grid, right-click Assembly Unit and select Calculate Asset.
    Calculating Asset Expenses
  2. At the information message, click OK.
    Information message

    The Profit and Loss Impact and Cash Flow Impact charts are updated on the dashboard.

    Dashboard updated

    Running Calculate Asset runs calculations for asset cost, depreciation, cash flow, and other asset-related expenses based on the assumptions. You can drill-down to review how the asset expenses affect multiple years or how it impacts cash flow.

Adding Justification and Attachments

  1. From the horizontal tabs at the bottom, click Detailed Justification.
  2. Verify that the POV is set to the following:
    POV
  3. In Justification, click in the cell next to the Justification field.

    A dialog box displays.

    Justification dialog
  4. In the Justification dialog, enter The Assembly Unit will facilitate the increase in capacity in the UK branch. and click Save.
    Enter and save justification
  5. On the upper-right area of the dashboard, click Save (Save).
  6. At the information message, click OK.
    Justification
  7. Right-click the cell next to the Justification field and select Attachments.
    Adding Attachments
  8. In Attachments, click Choose File.
    Attachments dialog

    Note:

    Depending on your browser, the button label may display Choose File or Browse.
  9. Navigate to where you saved sample_doc.docx, then select or open it. Once selected, it displays as:
    Selected file
  10. Click Upload.
  11. When the file is listed in the Attachments dialog, click Close.
    Attachment added to cell

    A paperclip icon is displayed on the upper-right to identify that the cell includes an attachment.

    Paperclip
  12. On the upper-right area of the dashboard, click Save (Save).
  13. At the information message, click OK.
    Information message

Analyzing Capital Expenditure

  1. From the cards on the top of the page, click Analysis.
    Analysis
  2. In Capital Expenses Summary, verify the POV and review the Capital Expenditure in the dashboard.
    Capital Expenses Summary
  3. Browse through the Expenses Summary and Asset Summary horizontal tabs. Change the POV as necessary to review and update the contents of the dashboard.

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