The Current Cost Asset Cost Allocation Method

Use the Current Cost method when the actual costs of project assets vary greatly.

The Current Cost asset cost allocation method is based on the current construction in progress (CIP) costs charged, and asset accounting lines created for each individual asset within an asset collection area (project or task).

Project managers can change their asset cost allocation method whenever required. For example, you can always choose to change your asset cost allocation method from Spread Evenly to Current Cost. One use of the Current Cost method is to calculate the basis for determining proration percentages across assets.

To explain this scenario, let’s say that one project has one task for each of the three buildings being constructed. However, there are some very generic costs that are incurred that are not directly associated with any one of the three buildings. Therefore, the customer creates one task to collect just these costs, which are called Common Costs. By definition, it is not possible to assign any asset to a common cost task. At the conclusion of the project, there are some very common costs. When Current Costs (not to be confused with common costs) is the asset cost allocation method, we will use the total current CIP charges for each building to determine how to allocate the common costs collected in the task. Therefore, a project asset in which $2 million has been capitalized would be allocated twice the common costs allocated to an asset with a capitalization of $1 million.

Note: This is the only asset cost allocation method where asset lines MUST be generated at least once to get the basis for determining how to allocate asset lines to project assets. The others do NOT require the Generate Asset Lines process to be run for proration percentages to be calculated.

The current cost is the total asset cost that was calculated by the Generate Asset Lines process.

For example, let’s say that this project is defined with the asset cost allocation method of Current Cost, which is reflected as the total asset cost for the four clay tennis courts:

The Current Cost / (Total Asset Cost) for Clay Tennis Court 1 is $1,000.
The Current Cost for Clay Tennis Court 2 is $4,000.
The Current Cost for Clay Tennis Court 3 is $5,000.
The Current Cost for Clay Tennis Court 4 is $10,000.

In all, there are four assets listed here, with a total current cost of $20,000 (1,000 + 4,000 + 5,000 + 10,000). The project manager decides that it would be most effective to allocate asset costs by the current cost in this context. Thus, asset costs would be allocated to these assets based on the proration of the current costs.

For guidance on how to specify the asset cost allocation method for a project, see the Specifying Asset Cost Allocation Methods While Setting up a Project section in the Asset Cost Allocation Methods topic.

Current Cost: Create Project Assets

The project manager creates the four assets and adds the quantity numbers as appropriate:

The current cost for a project asset is calculated by generating accounting and generating asset lines for the capital project. In this scenario, the total asset cost of $4,000.00 represents the current cost used for the proration of common project costs to the Clay Tennis Court 2 asset.

Here's a table depicting the listing of the four project assets tracking the four clay tennis courts, 1 through 4.

Current Costs: List of Project Assets

Asset	Asset Cost Allocation Method	Current Cost CIP Amount	Prorated Percentage
Clay Tennis Court 1	Current Cost	1,000.00	5%
Clay Tennis Court 2	Current Cost	4,000.00	20%
Clay Tennis Court 3	Current Cost	5,000.00	25%
Clay Tennis Court 4	Current Cost	10,000.00	50%
Totals		20,000.00	100.00%

Current Cost: Assign Project Assets to the Project or its Tasks

When using the Current Cost asset cost allocation method, you typically assign one asset to each task, and you create a task dedicated to collecting common costs.

Current Cost: Create and Collect Project Costs

Now that the assets are associated with the project, the project manager can start importing costs and allocate them to these assets.

Say the project manager imports and adds a cost of $1000 to the project. To view the imported cost:

The project manager navigates to Projects > Costs > Side Panel > Manage Project Costs and searches for the imported costs by project.
From the search results, the project manager clicks the Transaction Number associated with the imported cost. The Project Cost Transaction page appears.
They now click the Costing tab to view cost details.
The project manager selects the Line Number associated with the cost and clicks View Accounting to view details associated with the imported cost.

Current Cost: Generate Asset Lines

The project manager now runs the Assets > Panel Drawer > Generate Asset Lines process.

Current Cost: Review Project Asset Lines

Note that when $1,000 is charged to this project and task combination, the calculated amount of the asset lines is exactly as expected.

Here's a table listing out the prorated amounts allocated to each asset in this example.

Current Costs: Project Asset Details

Asset	Split Percentage	Project Expenditure	Allocated Amount
Clay Tennis Court 1	5.00%	$1.000.00	$50.00
Clay Tennis Court 2	20.00%	$1,000.00	$200.00
Clay Tennis Court 3	25.00%	$1,000.00	$250.00
Clay Tennis Court 4	50.00%	$1,000.00	$500.00
Totals	100.00%		$1,000.00

Once the process completes, the project manager reviews the project asset lines generated (Projects > Assets > Manage Capital Projects > Search > Actions > Manage Asset Lines) to check whether the imported project cost has been distributed as expected. They see that eight asset lines are generated in all. Four asset lines are generated for the imported project cost, and the values in the Split Percentage column is as specified in the Prorated Percentage column in the table above. Since there was just the one asset per task, the project costs were allocated automatically to their specified tasks.

The last four asset lines represent the allocation of the common costs ($1,000) captured in Task 1.1.5 and allocated to the four clay tennis courts.

Current Cost: Transfer Assets to Oracle Assets

The project manager now runs the Transfer Assets to Oracle Assets process to send the generated asset lines to Oracle Assets.