Capitalizing Projects

For capital projects, you can allocate project expenses either partially or in full to one or more assets. For example, if you have a project related to building a new facility, you might allocate equipment costs to the Machinery and Equipment asset class.

To capitalize projects:

1. Click Project Summary .

2. Click Capital and then click Project Capitalization.

3. In the Total Project Expenses area, select a project and view your total project expenses.

4. In the Allocate Expense to Asset area, select a project expense you want to capitalize, and then select the corresponding capital expense account. Also select the asset class (for example, Machinery or Buildings) where you plan the expense to be capitalized. You can select one or multiple assets for the expense to be allocated. Choose the same asset class/asset in case you want multiple expenses to be assigned to same asset. Indicate how much of the cost should be capitalized (making it a capital expense versus an operating expense) and enter capitalization details.

   When you save, the Total Project Expenses area is updated to show the capitalized expense compared to the total expense.

   The Capital Work in Progress area is updated with the capitalized projects.

5. In the Capital Work in Progress area, add additional details for each capitalized asset and specify the planned inservice date, which drives the depreciation and other expense calculations.

6. From the Action menu, select Calculate Depreciation.

   The depreciation for the assigned capital project asset is calculated, based on the inservice date.

The capitalized assets are pushed from Projects to Capital. In Capital, in New Asset Planning, select the asset class and project to see the capitalized asset’s value and associated depreciation.