Capital Project Automatic Asset Generation for Expense and Inventory Destination Costs

Automatically generate assets when capital costs are created in procurement to an expense or inventory destination. This new capability eliminates the manual effort and processing of data to define and assign project assets.

Automatic creation and assignment of project assets will apply to:

  • Item costs for receipts to an inventory or expense (accrued at receipt) destination. 
  • Supplier invoice costs matched to purchase orders to an expense (not accrued at receipt) destination.
  • Supplier invoice costs not matched to purchase orders. 

Utilize the new capitalization option for project types to enable automatic creation of project assets for capital projects. Also, have project asset units automatically updated when receipt returns, receipt corrections, invoice cancellations, or invoice quantity corrections happen for assets that have not been capitalized.

Additionally, create a maintenance asset for project purchases that have an inventory or expense (accrued at receipt) destination, and automatically establish a relationship between the maintenance asset, project asset, and corresponding fixed asset without any manual intervention. The application creates a single maintenance asset, project asset, and fixed asset for non-serialized items, whereas a unique project asset is created for each serial number associated with the receipt of a serial controlled item. The maintenance assets will be created in Oracle Fusion Cloud Maintenance, project assets in Oracle Fusion Cloud Project Management, and the fixed assets in Oracle Fusion Cloud Fixed Assets.

For detailed steps on each business process, refer to the below topics under the Capital Asset Costs chapter in the Using Project Costing guide.

  • Automatically Create Project Assets for Item Receipts
  • Automatically Create Project Assets for Supplier Invoices

These are the business benefits

  • Automatic creation, assignment, and update of project assets for capital project related item receipts to an inventory or expense destination, and supplier invoice costs.
  • Automatic relationship between maintenance assets, project assets, and the fixed assets without any manual intervention for capital project related item receipts.
  • Complete visibility into the project asset lifecycle, including costs, sourcing, maintenance, and capitalization.

Steps to Enable

Oracle Project Costing

  • Create a new project type and enable the Create Project Assets Automatically option.

    • Setup and Maintenance > Project Financial Management > Project Foundation > Manage Project Types

    • Create a new project type and enable capitalization

    • Under the Capitalization Options section, enable the Create Project Assets Automatically option in the Automated Processing Options for Project Assets subsection. 

    • Create new project templates and projects using the newly created project type. 

    • Only capital projects created using the new project type with the Create Project Assets Automatically option enabled will qualify for this feature.

Manage Project Types - Enable Create Project Assets Automatically

Manage Project Types - Enable Create Project Assets Automatically

Oracle Fusion Asset Tracking

  • Use the new opt-in under the Manufacturing and Supply Chain Materials Management offering in Functional Setup Manager to enable this feature to create project assets for project related item receipts.

    • Setup and Maintenance > Manufacturing and Supply Chain Materials Management > Change Feature Opt In > Maintenance Management > Edit Feature > Create Provisional Assets in Projects at Point of Material Receipts.

    • Click on the Opt-in task button to submit the process, Capture Cutoff Date to Create Provisional Assets in Projects

  • Only receipts for capital project related purchase orders created on or after the date that this opt-in is enabled will qualify for this feature.

Oracle Product Information Management

  • The Inventory item receipts for which project assets are to be created automatically must be enabled for Create Fixed Asset At Receipt in the item definition. 

    • Item > Specifications > Item Organization: Service > Asset

  • Only items enabled for creation of fixed asset at receipt will qualify for this feature.

Product Information Management - Enable create fixed item at receipt option

Product Information Management - Enable create fixed item at receipt option

Oracle Accounts Payable

  • When entering a matched or unmatched payables invoice type of Standard for capital projects, or a credit or debit memo to quantity correct a matched standard invoice for a capital project, ensure the invoice distribution line for the relevant supplier cost has the Track as Asset flag checked. Only invoice lines of type Item, and invoice distribution lines with the Track as Asset flag checked for a capital project will qualify for this feature.

  • The Track as Asset flag can be enabled automatically by virtue of the account associated with the distribution. If the associated account is an asset account, this flag will be checked. If the account is not an asset account and you would like to track the invoice distribution cost as a project asset, you will have to manually select this flag.

Accounts Payable - Track as Asset on Invoice Distribution Line

Accounts Payable - Track as Asset on Invoice Distribution Line

Tips And Considerations

Oracle Project Costing

  • Automatic project asset creation will apply only to new projects created based on new project types that have the automatic project creation option enabled. This feature does not apply to existing projects or project types.

  • Manual project asset creation will continue to be supported and follow existing business processes. The Import Asset and Assignments process has been enhanced to support automatic project asset creation for the scope outlined above.

  • Cross-charge item receipts or supplier invoice costs associated with capital projects are not eligible for automatic project asset creation.

  • If the project type for the capital project that has been enabled for automatic project asset creation has the Require complete asset definition flag set to Yes, the Import Asset and Assignments process will ignore this flag at the time of creation of the project asset.

    • On automatic creation of the project asset, we recommend that you review the details of the asset book, asset category, location, depreciation expense account, and asset key (if the chart of account structure for asset key is marked as required).

    • Review this information in the Manage Capital Assets page for project and associated project assets.

    • Update the information, if it is not already captured by the Import Asset and Assignments process, before attempting to transfer the project assets to Oracle Fusion Assets for capitalization.

  • Capital projects having transaction controls that might result in item receipt costs or supplier invoice costs becoming non-capitalizable will still have their project assets created automatically. We recommend you review your project's transaction controls and the automatically created project assets to place them on hold or take other actions as necessary.

  • When automatic project assets are created for a task defined as a retirement task, such project assets will be created but left unassigned. Users are expected to manually review and assign such project assets.

  • Automatically created project assets will be assigned the project asset type of As-Built.

  • Review the completion text file for the Import Asset and Assignments process to understand the number of project assets that were created or updated automatically when applicable. It can also include information on updates to project asset units that weren't successful because the related assets are capitalized. The BIP report for the Import Asset and Assignments process will continue to be printed for manually imported project assets only.

  • The asset name and asset description of automatically created project assets will follow the template below and can be used for easy identification and reconciliation, both with the source application and Oracle Fusion Assets when required.

    • Source: Accounts Payable

      • Asset Name: {Invoice Number-Line Number-Distribution Line Number-Invoice ID}

        • Example: INV_PRJ_CAPA01_901-1-1-300100630168603

      • Asset Description: Invoice Number-{Invoice Number}

        • Example: Invoice Number -INV_PRJ_CAPA01_901

    • Source: Oracle Fusion Asset Tracking

      • Asset Name: {IB Asset Number}

        • Example: 100106288926227

      • Asset Description: IB Asset Number-{IB Asset Number}

        • Example: IB Asset Number - 100106288926227

  • The Generate Asset Lines process follows the asset cost allocation method as defined in the capitalization options for the project type associated with the project for 25C.

  • The following items are planned for an upcoming release. Keep an eye out for future updates.

    • Direct allocation of costs associated with an automatically created project asset. Examples include item receipt costs, supplier invoice costs, freight charges, item cost variances, and so on. From a future update onward, it should be noted that the Construction in Progress option for the Asset Cost Allocation Method of a Project Type that is enabled for automatic project asset creation, will no longer apply to allocation of costs that are directly associated with an automatically created project asset. Such asset associated costs will be directly allocated.

    • Option to exclude allocation of costs not associated with an automatically created project asset. Examples include labor and miscellaneous project charges.

    • Utilization of the Fixed Asset Capitalization Threshold definition to allow project assets to be expensed or capitalized by the Prepare Asset Transaction Data process in Oracle Fusion Fixed Assets.

Oracle Receiving

  • When receiving expected shipments for project purchase orders to an expense (accrue at receipt) destination, receipts that are added to existing receipts will not automatically create project assets. We recommend using the Create Receipt option and to not receive against or add to an existing receipt.

Oracle Accounts Payable

  • Automatic project assets will be created only for eligible invoice distributions belonging to an invoice type of Standard.

  • Invoice distributions eligible to be created as a project asset and having a quantity value of 0, null, and a value less than 0, will be created with a project asset unit value of 1 in Project Costing.

  • It is recommended that for invoice distributions associated with capital projects that are tracked as assets, have the correct asset book captured on the distribution. The asset book must be of the book class Corporate and should be valid for the ledger associated with the business unit on the invoice.

  • Payables invoice costs that are created for non-accrual expense purchases or unmatched invoices containing inventory items that are serial controlled and tracked as an asset will create a single project asset for each invoice distribution line. The quantity on the distribution will be reflected as the project asset units for the project asset. Also, serial numbers will not be generated or captured in Project Costing for related project assets.

Oracle Product Information Management

  • It is recommended that an asset category be defined for inventory items that are defined for the creation of fixed assets at receipt and for which capital project related purchase receipts will be made.

Define asset category for inventory item

Define asset category for inventory item

  • Inventory items that are enabled for the creation of fixed asset at invoice will not qualify for this feature. Users will need to manually create project assets for such inventory items if required.

General

  • It is recommended that a fixed asset corporate book be defined for the Inventory Organization where capital project related purchases will be made, and for which automatic project asset creation is enabled

Define Fixed Asset Book at Inventory Organization

Define Fixed Asset Book at Inventory Organization

  • Define the default asset book for the receiver business unit of the capital projects for which automatic project asset creation is enabled. This can be defined in the Configure Project Accounting Business Function task.

Define default asset book at the receiver business unit configured for the project accounting business function

Define default asset book at the receiver business unit configured for the project accounting business function

Key Resources

  • Capital Asset Costs chapter in the Using Project Costing guide for the below topics,
    • Automatically Create Project Assets for Item Receipts
    • Automatically Create Project Assets for Supplier Invoices
  • Project-Driven Supply Chain chapter in the Using Project Costing guide.
  • Oracle Supply Chain Management Cloud: Using Supply Chain Cost Management guide 
  • Implementing Manufacturing and Supply Chain Management guide
  • Oracle Fusion Cloud Financials: Using Payables Invoice to Pay: Invoice Corrections

Access Requirements

Users who are assigned this predefined job role can access various parts of this feature:

  • Project Accountant (ORA_PJF_PROJECT_ACCOUNTANT_JOB)
  • Project Manager (ORA_PJF_PROJECT_MANAGER_JOB)
  • Project Administrator (ORA_PJF_PROJECT_ADMINISTRATOR_JOB)
  • Maintenance Manager (ORA_MNT_MAINTENANCE_MANAGER_JOB)
  • Warehouse Manager (ORA_INV_WAREHOUSE_MANAGER_JOB)
  • Cost Accountant (ORA_CST_COST_ACCOUNTANT_JOB)
  • Accounts Payable Supervisor (ORA_AP_ACCOUNTS_PAYABLE_SUPERVISOR_JOB)
  • Asset Administrator (ORA_CSE_ASSET_ADMINISTRATOR_JOB)
  • Asset Accountant (ORA_FA_ASSET_ACCOUNTANT_JOB)