How to decide where to assign project assets?
Assets can be assigned to tasks in different ways, and each of these methods has implications for how costs are assigned to these assets.
Here's a table listing out the implications of choosing each asset-task assignment method.
| Asset-Task Assignment Method | Description | Additional Details |
|---|---|---|
| Project Assets Assigned at the Project Level | Project assets are all assigned at the project level. |
An asset cost allocation method will be used to determine how to allocate project asset costs charged to this project. Tasks will be used for cost collection purposes only. Project assets cannot be assigned at any task if they are assigned at the project level. |
| Single Project Asset Assigned to Each Task | Some tasks will be designated specifically for one project asset. Costs charged to this task will be allocated only to that project asset. |
The asset cost allocation method is not needed to allocate project costs to the only asset associated with the project task. All costs associated with that task will automatically be allocated to that asset. Project assets cannot be assigned at the project level if they are assigned at the task level. |
| Multiple Project Assets Assigned to the Same Task | Some tasks will have multiple project assets assigned to them. For this use case, these project assets share the project costs charged to this task. |
An asset cost allocation method will be used to determine how to allocate project asset costs charged to this task. Project assets cannot be assigned at the project level if they are assigned at the task level. |
| Common Asset Costs Assigned to All Tasks Within the summary task |
Common costs are often necessary for the successful creation of numerous project assets, and the costs need to somehow be shared. Examples of common costs: Permits and architectural fees, wiring, and plumbing. |
These common costs can’t be associated with any specific asset. |
Scenarios for Asset Cost Allocation Methods
There are two distinct scenarios where asset cost allocation methods may be applied: when a project has multiple project assets and when a project has common costs that must be allocated across project assets.
Multiple Project Assets
When there is more than one project asset assigned at one specific project or task, asset cost allocation methods help determine how project costs must be assigned to each of the assets.
For example, consider a task that involves the creation of multiple clay tennis courts. From experience, (and from the project schedule) we know that these courts will be constructed simultaneously. The materials and labor incurred will be shared amongst the clay tennis courts being constructed.
Project managers and project accountants can choose from five options to specify how they want to allocate these costs:
- Actual Units
- Current Costs
- Estimated Cost
- None
- Standard Unit Cost
- Spread Evenly.
If they choose None as the asset cost allocation method, project costs would be generated in a single asset line, and there would be no assignment to any of the four assets listed.
Common Cost Project or Task
If the project manager chooses this method, costs collected will be shared amongst all project assets.
For example, if two tasks in your project are associated with two very different grass tennis courts, both of these tasks will incur very specific charges. In addition to these, there will be some common costs, such as costs associated with topsoil, grass seed, and tennis court line paint, which would be shared by both courts. These common costs would be collected in a separate task (such as Common Grass Tennis Courts Construction Costs), and would then be shared with those assets within the same summary task.
Customers have the same five options to allocate these costs:
- Actual Units
- Current Costs
- Estimated Cost
- None
- Standard Unit Cost
- Spread Evenly
If they choose None as the asset cost allocation method, project costs would be generated in a single asset line, and there would be no assignment to any of the four assets listed. Keep in mind that common costs are typically shared over a large number of assets.
- Projects or tasks that are defined as common costs will never have project assets listed. What you can do is either assign all common costs directly to the project, or you can create a task that is meant specifically for collecting common costs.
- Customers typically wait for significant milestones—or the conclusion of the project—to allocate common costs to eligible project assets.
- You can update the asset cost allocation method associated with a project at any time. You may decide that one of the other asset cost allocation methods may be more suitable at a particular stage of the project’s lifecycle. Keep in mind, however, that any update to allocation methods will only impact the allocation of new project asset lines, not previously generated asset lines that have already been transferred into Oracle Assets.