How Project Cost Adjustments are Processed

Understand how project cost adjustments are processed, including how project costs are validated, recalculated, or reprocessed during adjustment.

Project cost adjustments include project cost modifications that are required after you import project transactions into Oracle Fusion Project Costing.

For example, a project cost adjustment is needed if a transaction is incorrectly charged to a project or task. You can correct the transaction by performing a project cost adjustment to transfer the costs to a different project or task or changing cost or burden rates for the project cost. Oracle Fusion Project Costing adjusts the project costs and performs the related cost processing. You can review project costs and then perform various costing and billing adjustments.

Settings That Affect Project Cost Adjustments

The document entry option to allow adjustments determines if adjustments can be performed on the project costs created for that document entry.

This document control setting governs whether processed project costs are eligible for adjustment and ensures that only transactions from permitted document entries can be modified.

How Adjustments Are Processed

Perform adjustments to recalculate cost or cross-charge amounts, recalculate currency conversions, change the billing status, or split the quantity and transfer the project costs to another project or task. You can perform one or more adjustments on one or multiple project costs. However, you can only perform one type of adjustment at a time for the selected project costs, regardless of the number of project costs that will be impacted. Depending on your privileges, you either submit the adjustment for approval or approve adjustments and submit them for processing.

When you initiate an adjustment, the application first validates whether the project cost is eligible for adjustment based on document controls, project status, and other validation rules.

The application processes the project costs for the adjustment along with cost processing. The project costs go through the basic validation. Then, depending on the adjustment type, the project costs are run through the Import and Process Cost Transactions process.

This process validates and processes cost transactions and determines whether project costs can proceed through cost processing and adjustment.

Depending on the adjustment type, processing may either update existing cost distributions or create reversing and new cost distributions to reflect the adjusted transaction.

For adjustments such as transfer, split, and split and transfer, the application creates a net-zero reversal of the original project cost and generates new project costs for the adjusted transactions, ensuring accurate audit trails and traceability.

The application rolls back the processing automatically for process validation errors such as those for pricing, accounting, period derivation, and for transaction control violations. For split and transfer project cost adjustments, if transferring of any one of the project costs fails, then the application doesn't create new project costs or the associated cost distributions. The original project cost is set to rejected status and the error details are provided in the adjustment history of the project cost. For other adjustments such as billable status changes or raw cost and burden cost recalculation, the application rolls back the creation of the reversing and new cost distributions and updates the original project cost as rejected. You can't cancel an adjustment performed on a project cost for which funds are already reserved against a control budget.

If approval is required, adjustments are processed only after approval is completed.

The application tracks adjustment history for the project cost, including details such as the person submitting the adjustment and the submission date. It also records whether the adjustment comes from costing, invoice, or revenue. Review the errors and then either cancel or reprocess the adjustment.

You can review the cost distributions for a specific period, and compare and reconcile the cost amounts to amounts in other applications.