Asset Cost Allocation Methods Available in Oracle Projects
Here's a table that offers a summary of asset cost allocation methods available in Oracle Projects:
| Asset Cost Allocation Method | Description | Typical Use Case |
|---|---|---|
| Actual Units | The Actual Units asset cost allocation method is based on the actual number of units defined for a project. | Use this allocation method when your assets are almost identical in nature, and the primary difference is in the number of items for each asset. The cost allocation would then be driven by the number of asset items. It would be logical for one asset that has a quantity of 2 to be allocated twice the cost of an asset (with the same price) with the quantity of 1. |
| Current Costs | The Current Costs asset cost allocation method is based on the current construction in progress (CIP) costs charged, and asset accounting lines are created for each individual asset within a project or task. |
Use this allocation method when you are looking to allocate common costs to project assets based on the current costs of the existing assets. This would commonly be done at the conclusion of a capital project. |
| Estimated Costs | The Estimated Cost asset cost allocation method is based on the estimated or budgeted cost of the project assets. | The use case for using Estimated Cost would be when customers can very closely estimate the final cost of their project asset. A project asset in which an estimated cost of $2 million would be allocated twice the common cost of a project asset with estimated cost of $1 million. |
| None | None is an asset cost allocation method that will NOT allocate common and indirect costs to project assets. |
The use case for using None would be when the other five asset cost allocation methods do NOT meet the needs for assigning the project costs to the project assets. The customer will have to assign these unassigned asset lines manually through the Project Assets UI, or in larger volumes using FBDI. Keep in mind, if there is just one project asset assigned to a task, project asset lines will automatically be assigned to that project asset, regardless of the asset cost allocation method used. |
| Standard Unit Cost | A standard unit cost is defined for an asset book and asset category combination. When you use this method, Oracle Fusion Projects multiplies the standard unit cost times the actual units based on the asset book and asset category of each asset, and it determines the proration basis for allocating costs. | The use case for Standard Unit Cost is when customers would like to use a standard defined cost when determining the project cost allocations. |
| Spread Evenly |
The Spread Evenly method is an asset cost allocation method used to allocate common and indirect costs to assets. The Spread Evenly asset cost allocation method considers the number of project assets that will receive project costs and equally shares the costs with those assets. |
The use case for using Spread Evenly would be when customers have very similar assets and have determined that common costs can be equally allocated to each of those assets. A grocery store may have 500 of the same display cases constructed and distributed to their stores. The costs are for all 500 display cases and should be equally divided for each asset. |
- 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.
- When there is one project asset assigned to a specific task, project costs associated with that task are automatically assigned to that one asset. The asset cost allocation method is not used to allocate project costs here.
- 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, and not to previously generated asset lines that have already been transferred into Oracle Assets.