The Estimated Cost Asset Cost Allocation Method
The Estimated Cost asset cost allocation method is based on the estimated or budgeted cost of the project assets.
Use the Estimated Cost asset cost allocation method when you can very closely estimate the final cost of your project asset. A project asset with an estimated cost of $2 million would be allocated twice the common cost of a project asset with an estimated cost of $1 million.
For example, let’s say that this project is defined with the asset cost allocation method of Estimated Cost, which is reflected as the total asset cost for the four clay tennis courts:
- The estimated cost for Clay Tennis Court 1 is $30,000.
- The estimated cost for Clay Tennis Court 2 is $40,000.
- The estimated cost for Clay Tennis Court 3 is $60,000.
- The estimated cost for Clay Tennis Court 4 is $70,000.
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.
Estimated Cost: Create Project Assets
The estimated cost for a project asset is its budgeted or expected cost. In our example above, the estimated cost of Clay Tennis Court 1 is $60,000.
Say a project manager needs the following assets for a project:
| Asset | Asset Cost Allocation Method | Estimated Units | Estimated Cost | Prorate % |
|---|---|---|---|---|
| Tennis Court 1 | Estimated Costs | 1 | 30,000.00 | 15% |
| Tennis Court 2 | Estimated Costs | 1 | 40,000.00 | 20% |
| Tennis Court 3 | Estimated Costs | 1 | 60,000.00 | 30% |
| Tennis Court 4 | Estimated Costs | 1 | 70,000.00 | 35% |
| Totals | 4 | 200,000.00 | 100.00% |
Notice how the only difference between the four assets is the estimated cost. This is used to determine the calculated prorate percentage that will be used when allocating common costs to project assets.
Estimated Cost: Assign Project Assets to the Project or its Tasks
It’s also important to note that all four of these assets are assigned at the project level. This means that when a new common project expenditure item is added to the project, the cost will be assigned to these assets using the prorated percentage we saw calculated in the table above.
Each of these four assets must be as-built, and the project manager also specifies the actual units of each asset that the project needs.
For each asset, the project manager captures the following details, among others:
- Asset Name: The name of the asset.
- Estimated Units: The number of units of that asset required for the project
The project manager can also add project assets to a project using Oracle Assets. To do so, they must:
- Navigate to Oracle Assets > Side Panel > Manage Capital Projects.
- Search for the project.
- Select the project and then click Actions > Manage Capital Assets.
Estimated 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, they click the Transaction Number associated with the imported cost. The Project Cost Transaction page appears.
- They 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.
Estimated Cost: Generate Asset Lines
The project manager now runs the Assets > Panel Drawer > Generate Asset Lines process.
Estimated Cost: Review Asset Lines
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 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.
Note that the calculated amount of the asset lines is exactly as expected.
| Asset | Split Percentage | Project Expenditure | Allocated Amount |
|---|---|---|---|
| Clay Tennis Court 1 | 15.00% | $1.000.00 | $150.00 |
| Clay Tennis Court 2 | 20.00% | $1,000.00 | $200.00 |
| Clay Tennis Court 3 | 30.00% | $1,000.00 | $300.00 |
| Clay Tennis Court 4 | 35.00% | $1,000.00 | $350.00 |
| Totals | 100.00% | $1,000.00 |
Estimated Cost: Transfer Assets to Oracle Assets
Once the project manager is ready to transfer these asset lines to Oracle Assets, they use the Projects > Assets > Side Panel Drawer > Transfer Assets to Oracle Fusion Assets process to transfer these asset lines to Oracle Assets.