Professional Documents
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D65238
Edition 1.0
D60115GC10
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February 2010
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Fundamentals
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Volume 1 - Student Guide
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R12.x Oracle Project Costing
Copyright © 2010, Oracle. All rights reserved.
Unauthorized reproduction or distribution prohibited. Copyright© 2022, Oracle University and/or its affiliates.
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Trademark Notice
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Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective
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owners.
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Debjit Nag
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Table of Contents
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Oracle Project Costing and Integration..........................................................................................................1-7
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Agenda...........................................................................................................................................................1-11
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Oracle Project Costing and Project Classes ...................................................................................................1-12
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Overview of Resources In Oracle Projects ....................................................................................................1-13
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Costing Flow .................................................................................................................................................1-15
Collect and Manage All Costs .......................................................................................................................1-17
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Manage Costs ................................................................................................................................................1-18
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View Accounting: Transaction Details..........................................................................................................1-20
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View Accounting: Final Subledger Accounting Entries................................................................................1-21
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View Expenditure Item Details .....................................................................................................................1-22
Summary........................................................................................................................................................1-23
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Quiz ...............................................................................................................................................................1-24
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Defining Projects for Costing .........................................................................................................................2-1
Defining Projects for Costing ........................................................................................................................2-3
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Objectives ......................................................................................................................................................2-4
Agenda...........................................................................................................................................................2-5
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Overview of Projects and Tasks ....................................................................................................................2-6
Project Classes and Project Types .................................................................................................................2-7
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Quiz ...............................................................................................................................................................2-12
Agenda...........................................................................................................................................................2-14
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Agenda...........................................................................................................................................................2-21
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Summary........................................................................................................................................................2-32
Overview of Budgetary Controls, Budget Integration and Core Budgeting ..............................................3-1
Overview of Budgetary Controls, Budget Integration and Core Budgeting ..................................................3-3
Objectives ......................................................................................................................................................3-4
Agenda...........................................................................................................................................................3-5
Overview of Budgetary Controls...................................................................................................................3-6
Budgetary Control Settings: Time Intervals ..................................................................................................3-7
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Quiz ...............................................................................................................................................................3-21
Agenda...........................................................................................................................................................3-24
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Overview of Budget Integration ....................................................................................................................3-25
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Generating Accounting for Integrated Budgets .............................................................................................3-26
Accounting Event Model Overview ..............................................................................................................3-28
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Budget Check Funds Processing Overview...................................................................................................3-31
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Creating a Baseline for an Integrated Budget ................................................................................................3-33
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Budget Integration Workflow........................................................................................................................3-35
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Reviewing and Overriding Budget Account Details......................................................................................3-36
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Viewing Encumbrance and Budget Subledger Accounting...........................................................................3-37
Quiz ...............................................................................................................................................................3-38
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Agenda...........................................................................................................................................................3-39
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Top-Down Budget Integration.......................................................................................................................3-40
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Top-Down Budget Integration Procedures ....................................................................................................3-41
Encumbrance Accounting Example...............................................................................................................3-43
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Creating Project Budgets for Top-Down Budget Integration ........................................................................3-46
Maintaining the Project Budget .....................................................................................................................3-47
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Year-End Processing .....................................................................................................................................3-49
Agenda...........................................................................................................................................................3-50
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Agenda...........................................................................................................................................................3-54
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Budget Integration: Define the Project Budget Account Generation Workflow ...........................................3-68
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Quiz ...............................................................................................................................................................3-74
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Summary........................................................................................................................................................3-75
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Viewing Accounting Lines ............................................................................................................................4-24
Quiz ...............................................................................................................................................................4-25
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Agenda...........................................................................................................................................................4-27
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Automatically Reversing Expenditure Batches .............................................................................................4-28
Releasing the Batch .......................................................................................................................................4-29
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GL Periods for the Expenditure Items ...........................................................................................................4-30
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Agenda...........................................................................................................................................................4-31
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Upload Expenditure Batches from Microsoft Excel......................................................................................4-32
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Upload Contingent Worker Timecards..........................................................................................................4-34
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Quiz ...............................................................................................................................................................4-36
Agenda...........................................................................................................................................................4-37
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Expenditure Batch Reports ............................................................................................................................4-38
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Quiz ...............................................................................................................................................................4-39
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Agenda...........................................................................................................................................................4-40
Costing Flow: Import Transactions ...............................................................................................................4-41
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Overview of Transaction Sources..................................................................................................................4-42
Overview of Transaction Import ...................................................................................................................4-43
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Resolving Import Exceptions ........................................................................................................................4-44
Quiz ...............................................................................................................................................................4-45
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Implementing Expenditures...........................................................................................................................5-3
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Objectives ......................................................................................................................................................5-4
Expenditures Implementation Steps ..............................................................................................................5-5
Agenda...........................................................................................................................................................5-6
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Expenditure Categories..................................................................................................................................5-7
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Agenda...........................................................................................................................................................5-17
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Quiz ...............................................................................................................................................................5-19
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Agenda...........................................................................................................................................................6-5
Overview of Costing......................................................................................................................................6-6
Costing Concepts...........................................................................................................................................6-9
Overview of Encumbrance Accounting.........................................................................................................6-10
Quiz ...............................................................................................................................................................6-12
Agenda...........................................................................................................................................................6-13
Costing Flow: Distribute Costs......................................................................................................................6-14
Cost Distribution Processing Flow ................................................................................................................6-15
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Determining Costs .........................................................................................................................................6-16
Quiz ...............................................................................................................................................................6-18
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Burden Cost Calculations ..............................................................................................................................6-19
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AutoAccounting: Distribution Programs .......................................................................................................6-20
Cost Distribution Concurrent Programs ........................................................................................................6-21
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Agenda...........................................................................................................................................................6-23
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Costing Flow: Create Accounting .................................................................................................................6-24
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Integration with Oracle Subledger Accounting .............................................................................................6-25
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Generating Cost Accounting Events..............................................................................................................6-26
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AutoAccounting: Generate Accounting Events.............................................................................................6-27
Creating and Transferring Accounting ..........................................................................................................6-28
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Oracle General Ledger Journal Import ..........................................................................................................6-29
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Quiz ...............................................................................................................................................................6-30
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Agenda...........................................................................................................................................................6-31
Streamline Processes .....................................................................................................................................6-32
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Submitting Streamline Processes...................................................................................................................6-34
Agenda...........................................................................................................................................................6-35
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Overview of Period Processing .....................................................................................................................6-36
Control of GL Period Statuses for Project Transactions................................................................................6-37
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Quiz ...............................................................................................................................................................6-47
Summary........................................................................................................................................................6-48
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Agenda...........................................................................................................................................................7-5
Overview of Accounting for Costs ................................................................................................................7-6
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AutoAccounting ............................................................................................................................................7-7
AutoAccounting Rules ..................................................................................................................................7-8
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Assign Rules..................................................................................................................................................7-16
Quiz ...............................................................................................................................................................7-18
Agenda...........................................................................................................................................................7-19
AutoAccounting for Costs Implementation Steps .........................................................................................7-20
Accounting for Labor Costs...........................................................................................................................7-21
Accounting for Expense Report Costs...........................................................................................................7-22
Accounting for Usage Costs ..........................................................................................................................7-23
Accounting for Miscellaneous Costs .............................................................................................................7-24
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Implementing Accounting for Project-Related Supplier Costs and Expense Reports ...................................7-37
Quiz ...............................................................................................................................................................7-39
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Agenda...........................................................................................................................................................7-40
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Encumbrance Accounting and Project Budgets.............................................................................................7-41
Project Budget Account Generation Workflow.............................................................................................7-42
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Quiz ...............................................................................................................................................................7-43
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Agenda...........................................................................................................................................................7-44
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Overview of Oracle Subledger Accounting...................................................................................................7-45
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Integration with Oracle Subledger Accounting .............................................................................................7-46
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Accounting Event Model Overview ..............................................................................................................7-47
Quiz ...............................................................................................................................................................7-49
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Agenda...........................................................................................................................................................7-50
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Oracle Subledger Accounting for Costs Implementation Steps.....................................................................7-51
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Oracle Subledger Accounting for Costs Implementation Steps (continued) .................................................7-52
Sources and Custom Sources.........................................................................................................................7-53
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Journal Entry Methods and Definitions .........................................................................................................7-54
Associating Subledger Accounting Methods and Ledgers ............................................................................7-56
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Post-Accounting Programs ............................................................................................................................7-57
Cross-Entity Balancing Rules........................................................................................................................7-59
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Summary........................................................................................................................................................7-62
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Agenda...........................................................................................................................................................8-11
Listings ..........................................................................................................................................................8-12
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Quiz ...............................................................................................................................................................8-13
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Summary........................................................................................................................................................8-15
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Objectives ......................................................................................................................................................9-4
Agenda...........................................................................................................................................................9-5
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Implementing Burden Costing.......................................................................................................................10-3
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Objectives ......................................................................................................................................................10-4
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Agenda...........................................................................................................................................................10-5
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Overview of Burdening .................................................................................................................................10-6
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Burden Costing Terminology ........................................................................................................................10-7
Storing Burden Cost Calculations .................................................................................................................10-8
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Accounting for Burden Costs ........................................................................................................................10-9
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Project Types and Burdening.........................................................................................................................10-11
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Quiz ...............................................................................................................................................................10-13
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Agenda...........................................................................................................................................................10-14
Burden Costing Implementation Steps ..........................................................................................................10-15
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Cost Bases and Cost Base Types ...................................................................................................................10-16
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Burden Cost Codes ........................................................................................................................................10-17
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Burden Structures ..........................................................................................................................................10-18
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Burden Schedule Types and Burden Schedules.............................................................................................10-22
Assigning Burden Multipliers........................................................................................................................10-23
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Defining Burden Schedules ...........................................................................................................................10-25
Assigning Burden Schedules .........................................................................................................................10-27
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Accounting for Cost Adjustments Example 2: Total Burdened Costs with Incremental Transactions .........10-34
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Accounting for Cost Adjustments Example 3: Summarized Burden Cost Components without Incremental
Transactions...................................................................................................................................................10-36
Accounting for Cost Adjustments Example 4: Summarized Burden Cost Components with Incremental
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Transactions...................................................................................................................................................10-38
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Quiz ...............................................................................................................................................................10-40
Agenda...........................................................................................................................................................10-43
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Quiz ...............................................................................................................................................................10-50
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Summary........................................................................................................................................................10-51
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Objectives ......................................................................................................................................................11-4
Agenda...........................................................................................................................................................11-5
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Agenda...........................................................................................................................................................11-32
Audit Reporting for Expenditure Adjustments ..............................................................................................11-33
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Summary........................................................................................................................................................11-35
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Integration with Oracle Purchasing and Oracle Payables...........................................................................12-1
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Integration with Oracle Purchasing and Oracle Payables..............................................................................12-3
Objectives ......................................................................................................................................................12-4
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Agenda...........................................................................................................................................................12-5
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Overview of Supplier Costs...........................................................................................................................12-6
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Oracle Purchasing and Oracle Payables (Accrual) ........................................................................................12-7
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Oracle Purchasing and Oracle Payables (Cash).............................................................................................12-9
Quiz ...............................................................................................................................................................12-11
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Agenda...........................................................................................................................................................12-12
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Entering Project-Related Information............................................................................................................12-13
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Validating Project Information ......................................................................................................................12-15
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Budgetary Control Activation........................................................................................................................12-16
Commitment Reporting .................................................................................................................................12-17
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Accounting Transactions ...............................................................................................................................12-19
Quiz ...............................................................................................................................................................12-21
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Agenda...........................................................................................................................................................12-22
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Quiz ...............................................................................................................................................................12-32
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Agenda...........................................................................................................................................................12-33
Interfacing Supplier Costs .............................................................................................................................12-34
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Payment Control............................................................................................................................................12-36
Predefined Transaction Sources ....................................................................................................................12-37
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Expenditure Inquiry.......................................................................................................................................12-40
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Agenda...........................................................................................................................................................12-43
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Quiz ...............................................................................................................................................................12-49
Agenda...........................................................................................................................................................12-50
Supplier Cost Adjustments Overview............................................................................................................12-51
Restrictions to Supplier Cost Adjustments in Oracle Project Costing ...........................................................12-53
Adjusting Project-Related Documents in Oracle Purchasing ........................................................................12-55
Writing Off Receipt Accruals in Oracle Purchasing......................................................................................12-57
Adjusting Project-Related Documents in Oracle Payables............................................................................12-58
Adjusting Supplier Costs for Non-Capital Assets .........................................................................................12-60
Processing Adjustments.................................................................................................................................12-62
Prioritizing Supplier Costs Adjustments........................................................................................................12-64
Accounting for Supplier Cost Adjustments ...................................................................................................12-69
Quiz ...............................................................................................................................................................12-74
Agenda...........................................................................................................................................................12-76
Oracle Purchasing and Oracle Payables Integration Implementation Steps ..................................................12-77
Implementing Oracle Purchasing and Oracle Payables Integration...............................................................12-79
Set Profile Options for Project-Related Documents ......................................................................................12-80
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Define the Supplier Invoice Account Generator............................................................................................12-82
Defining a Project-Related Purchasing Transactions Account Generator .....................................................12-83
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Specify a Default Supplier Cost Credit Account ...........................................................................................12-84
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Define Project-Related Distribution Sets.......................................................................................................12-85
Define Oracle Payables Descriptive Flexfields and Related Profiles ............................................................12-86
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Summary........................................................................................................................................................12-87
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Integration with Oracle Internet Expenses ...................................................................................................13-1
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Integration with Oracle Internet Expenses.....................................................................................................13-3
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Objectives ......................................................................................................................................................13-4
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Agenda...........................................................................................................................................................13-5
Oracle Internet Expenses ...............................................................................................................................13-6
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Expense Report Flow.....................................................................................................................................13-7
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Deriving Project Data from Expense Reports................................................................................................13-9
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Disconnected Expense Reporting Process.....................................................................................................13-10
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Adjusting Expense Reports............................................................................................................................13-11
Quiz ...............................................................................................................................................................13-13
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Agenda...........................................................................................................................................................13-15
Integration with Oracle Internet Expenses Implementation Steps.................................................................13-16
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Quiz ...............................................................................................................................................................13-23
Summary........................................................................................................................................................13-25
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Objectives ......................................................................................................................................................14-4
Agenda...........................................................................................................................................................14-5
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Agenda...........................................................................................................................................................14-15
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Basis Method - Target Percentage and Prorate..............................................................................................15-16
Allocation Rule Definition ............................................................................................................................15-17
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Source Definition...........................................................................................................................................15-19
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Target Definition ...........................................................................................................................................15-21
Offset Definition............................................................................................................................................15-23
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Prorated Basis Method Definition .................................................................................................................15-25
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Copy Allocation Rules...................................................................................................................................15-26
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Deleting or Modifying Allocation Rules .......................................................................................................15-27
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Client Extensions for Allocations..................................................................................................................15-28
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Quiz ...............................................................................................................................................................15-30
Agenda...........................................................................................................................................................15-34
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Allocating Costs ............................................................................................................................................15-35
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Creating Allocation Runs ..............................................................................................................................15-36
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Allocation Run Statuses.................................................................................................................................15-37
Deleting Allocation Runs ..............................................................................................................................15-38
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Releasing Allocation Runs ............................................................................................................................15-39
Reversing Allocation Runs ............................................................................................................................15-40
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Quiz ...............................................................................................................................................................15-41
Agenda...........................................................................................................................................................15-42
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Overview of AutoAllocations........................................................................................................................15-43
AutoAllocation Rules Implementation Steps.................................................................................................15-46
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Agenda...........................................................................................................................................................15-51
Submitting an AutoAllocation Set.................................................................................................................15-52
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Asset Capitalization.........................................................................................................................................16-1
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Asset Capitalization.......................................................................................................................................16-3
Objectives ......................................................................................................................................................16-4
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Agenda...........................................................................................................................................................16-5
Overview of Asset Capitalization..................................................................................................................16-6
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Quiz ...............................................................................................................................................................16-16
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Agenda...........................................................................................................................................................16-18
Project Types for Asset Capitalization ..........................................................................................................16-19
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Quiz ...............................................................................................................................................................16-21
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Agenda...........................................................................................................................................................16-22
Asset Processing Flow...................................................................................................................................16-23
Specifying Costs ............................................................................................................................................16-25
Defining Assets for Capital Projects..............................................................................................................16-27
Streamlining Asset Creation ..........................................................................................................................16-29
Asset Grouping Levels ..................................................................................................................................16-30
Asset Cost Allocation Methods .....................................................................................................................16-31
Specifying an Actual Date in Service or a Retirement Date..........................................................................16-32
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Agenda...........................................................................................................................................................16-46
Asset Capitalization Implementation Steps ...................................................................................................16-47
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Implement Asset Extensions..........................................................................................................................16-48
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Define Standard Unit Costs for Asset Cost Allocations ................................................................................16-50
Enable Retirement Cost Processing...............................................................................................................16-51
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Define Proceeds of Sale Expenditure Types..................................................................................................16-52
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Summary........................................................................................................................................................16-53
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Cross Charge....................................................................................................................................................17-1
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Cross Charge .................................................................................................................................................17-3
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Objectives ......................................................................................................................................................17-4
Agenda...........................................................................................................................................................17-5
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Overview of Cross Charge.............................................................................................................................17-6
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Cross Charge Terminology............................................................................................................................17-7
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Cross Charge Types Example........................................................................................................................17-9
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Processing Methods.......................................................................................................................................17-10
Quiz ...............................................................................................................................................................17-11
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Agenda...........................................................................................................................................................17-12
Borrowed and Lent Processing......................................................................................................................17-13
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Quiz ...............................................................................................................................................................17-23
Agenda...........................................................................................................................................................17-25
Borrowed and Lent Cross Charge Processing Implementation Steps............................................................17-26
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Summary........................................................................................................................................................17-36
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Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking ..............18-1
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Appendix A: Integration with Oracle Inventory, Project Manufacturing, and Asset Tracking .....................18-3
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Objectives ......................................................................................................................................................18-4
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Agenda...........................................................................................................................................................18-5
Integration with Oracle Inventory..................................................................................................................18-6
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Transaction Sources (continued) ...................................................................................................................18-26
Quiz ...............................................................................................................................................................18-27
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Agenda...........................................................................................................................................................18-28
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Integration with Oracle Asset Tracking.........................................................................................................18-29
How Purchase Order Receipts Flow into Project-Related Transactions........................................................18-31
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Importing Oracle Asset Tracking Cost ..........................................................................................................18-33
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Summary........................................................................................................................................................18-34
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Appendix B: Budgetary Controls and Budget Integration ..........................................................................19-1
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Appendix B: Budgetary Controls and Budget Integration.............................................................................19-3
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Objectives ......................................................................................................................................................19-4
Agenda...........................................................................................................................................................19-5
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Budgeting Implementation Steps...................................................................................................................19-6
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Define Budget Change Reasons ....................................................................................................................19-7
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Define Additional Budget Types ...................................................................................................................19-8
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Define Additional Budget Entry Methods .....................................................................................................19-10
Budget Calculation Extensions......................................................................................................................19-12
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Budget Verification Extension ......................................................................................................................19-14
Budget Workflow and Budget Workflow Extension.....................................................................................19-15
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Quiz ...............................................................................................................................................................19-16
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Agenda...........................................................................................................................................................19-18
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Agenda...........................................................................................................................................................19-27
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Objectives ......................................................................................................................................................20-4
Agenda...........................................................................................................................................................20-5
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Quiz ...............................................................................................................................................................20-24
Summary........................................................................................................................................................20-26
Summary of R12.x Project Costing Fundamentals.......................................................................................21-1
Summary of R12.x Project Costing Fundamentals........................................................................................21-3
Objectives ......................................................................................................................................................21-4
Agenda...........................................................................................................................................................21-5
Defining Projects for Costing ........................................................................................................................21-6
Expenditures ..................................................................................................................................................21-7
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Performing Cost Processing ..........................................................................................................................21-8
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Accounting for Costs .....................................................................................................................................21-11
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Burden Costing..............................................................................................................................................21-12
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Integration with Oracle Purchasing and Oracle Payables..............................................................................21-13
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Integration with Oracle Internet Expenses.....................................................................................................21-14
Integration with Oracle Time & Labor ..........................................................................................................21-15
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Integration with Other Applications ..............................................................................................................21-16
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Allocations and AutoAllocations...................................................................................................................21-17
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Asset Capitalization.......................................................................................................................................21-18
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Asset Capitalization: Capitalized Interest......................................................................................................21-19
Cross Charge .................................................................................................................................................21-20
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Budgetary Controls and Budget Integration ..................................................................................................21-21
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Agenda...........................................................................................................................................................21-22
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Oracle Projects Fundamentals Learning Path ................................................................................................21-23
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Summary........................................................................................................................................................21-24
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Preface
Profile
Before You Begin This Course
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Prerequisites
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•
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R12.x Oracle E-Business Suite Essentials for Implementers
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• R12.x Project Foundation Fundamentals
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How This Course Is Organized
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This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations
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and written practice sessions reinforce the concepts and skills introduced.
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Related Publications
Oracle Publications
Title Part Number
Oracle Project Costing User Guide E13438-03
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Oracle Projects Implementation Guide E13582-03
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Oracle Projects Fundamentals E13581-03
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Additional Publications
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• System release bulletins
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• Installation and user’s guides
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•
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Read-me files
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• International Oracle User’s Group (IOUG) articles
• Oracle Magazine
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Typographic Conventions
Typographic Conventions in Text
Convention Element Example
Bold italic Glossary term (if The algorithm inserts the new key.
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there is a glossary)
Caps and Buttons, Click the Executable button.
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lowercase check boxes, Select the Can’t Delete Card check box.
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triggers, Assign a When-Validate-Item trigger to the ORD block.
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windows Open the Master Schedule window.
Courier new, Code output, Code output: debug.set (‘I”, 300);
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case sensitive directory names, Directory: bin (DOS), $FMHOME (UNIX)
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(default is filenames,
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Filename: Locate the init.ora file.
lowercase) passwords,
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Password: User tiger as your password.
pathnames, Pathname: Open c:\my_docs\projects
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URLs, URL: Go to http://www.oracle.com
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user input,
User input: Enter 300
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usernames
Username: Log on as scott
Initial cap Graphics labels ide no
Customer address (but Oracle Payables)
(unless the term is a
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proper noun)
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and phrases, For further information, see Oracle7 Server SQL Language
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Quotation Interface elements Select “Include a reusable module component” and click Finish.
marks with long names
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that have only This subject is covered in Unit II, Lesson 3, “Working with
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titles in cross-
references
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Uppercase SQL column Use the SELECT command to view information stored in the
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table names
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Passwords DROP USER scott
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IDENTIFIED BY tiger;
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PL/SQL objects OG_ACTIVATE_LAYER
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(OG_GET_LAYER (‘prod_pie_layer’))
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Lowercase Syntax variables CREATE ROLE role
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italic
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Uppercase SQL commands and SELECT userid
functions FROM emp;
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Typographic Conventions in Oracle Application Navigation Paths
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This course uses simplified navigation paths, such as the following example, to direct you
through Oracle Applications.
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(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve
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1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches
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Summary.
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Notations:
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(N) = Navigator
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(M) = Menu
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(T) = Tab
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(B) = Button
(I) = Icon
(H) = Hyperlink
This course uses a “navigation path” convention to represent actions you perform to find
pertinent information in the Oracle Applications Help System.
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—represents the following sequence of actions:
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1. In the navigation frame of the help system window, expand the General Ledger entry.
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2. Under the General Ledger entry, expand Journals.
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3. Under Journals, select Enter Journals.
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4. Review the Enter Journals topic that appears in the document frame of the help system
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window.
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education.oracle.com/streams/ebusinesssuite
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Chapter 1 - Page 1
Chapter 1
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Chapter 1 - Page 2
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Chapter 1 - Page 3
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Objectives
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Chapter 1 - Page 4
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Agenda
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Chapter 1 - Page 5
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You can use Oracle Project Costing to collect, process, and track costs against projects and
tasks. You can enact cost controls and report on costs for all project activities. Oracle Project
35
Costing is part of the Oracle Enterprise Project Management solution. Oracle Enterprise
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Project Management provides a set of applications that help companies deliver global projects
by integrating and managing project information. It enables all persons at all levels of the
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environment. Information is available to the project team through personalized and secure role-
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based views.
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assets and purchasing. You can also track inventory items after you have installed them
and link financial transactions to the physical movement of equipment. Oracle Asset
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Tracking enables you to create assets upon receipt in Oracle Purchasing. After you create
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the asset, Oracle Asset Tracking performs the changes in the background for any further
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physical movement. For example, if you move the asset from one location to the other,
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then Oracle Asset Tracking performs the asset cost, distribution, and unit changes without
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manual intervention. Oracle Asset Tracking integrates with Oracle Inventory, Oracle
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Purchasing, Oracle Project Costing, Oracle Assets, and Oracle Payables, and stores
information collected from them.
• Oracle Internet Expenses - Oracle Internet Expenses enables you to enter project-
related expense reports. Once approved, the expense reports are imported into Oracle
Payables. Oracle Payables creates invoices from the expense reports, maintains
payments, and creates subledger accounting entries. In Oracle Project Costing, expense
reports are interfaced as actual costs from Oracle Payables.
Copyright © Oracle, 2010. All rights reserved.
integration, enabling you to interface costs from Oracle Inventory to Oracle Project
Costing, without installing Oracle Project Manufacturing. When you enter project–related
transactions in Oracle Inventory, you enter the project information on the source
transaction. Oracle Inventory and Oracle Project Costing carry the project information
through from the Issue To or Receipt From transaction in Oracle Inventory to the project
expenditure in Oracle Project Costing.
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• Oracle iProcurement - You can enter project-related purchase requisitions using Oracle
iProcurement. After requisition approval, you can AutoCreate a purchase order in Oracle
e s
Purchasing. Oracle Purchasing copies the project information to the purchase order.
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• Oracle Payables - In Oracle Payables, you can match a supplier invoice to an existing
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purchase order or receiving transaction. Oracle Payables automatically copies the project
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information from the purchase order distribution lines when you perform the match. You
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can also create non-matched supplier invoices in Oracle Payables and enter invoice
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distributions to charge invoice costs to projects. You can use both Oracle Purchasing and
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Oracle Payables, or just Oracle Payables. You can set up Oracle Payables to apply
discounts to payments. After you enter a payment with discounts, you interface the
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discounts to Oracle Project Costing. Oracle Payables creates subledger accounting entries
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for project-related supplier costs.
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Oracle Purchasing - When you enter project-related transactions in Oracle Purchasing,
you only need to enter project information on the source document; either the requisition
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or the purchase order. The Account Generator automatically creates the account
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information, based on the project-related information you enter. You can also use the
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purchase order shipment is flagged to accrue at receipt and the purchased goods are
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delivered to an expense destination, you enter a receiving transaction for the purchase
order in Oracle Purchasing and create subledger accounting for the receiving transaction
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in final mode. Next, you interface receipt accruals to Oracle Project Costing.
• Oracle Project Manufacturing - Oracle Project Costing acts as a cost repository for
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project and task and use Transaction Import to import them into Oracle Project Costing.
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• Oracle Time & Labor - Oracle Time & Labor integrates with Oracle Project Costing to
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enable employees and contingent workers to enter and submit project-related timecards.
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Employees and contingent workers enter their own time, which you can subject to an
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approval process according to your business rules. You can transfer approved timecards
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to Oracle Project Costing, Oracle Payroll, and Oracle Human Resources. After you
import the timecards into Oracle Project Costing, you cost the timecards and derive the
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default accounting using AutoAccounting. During cost processing, the raw cost and any
additional burden cost is calculated. Finally, you generate cost accounting events and
create accounting for the timecards in Oracle Subledger Accounting.
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capture construction–in–process (CIP) and expense costs for assets you are creating.
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When you are ready to place assets in service, you can generate asset lines from the CIP
costs and send the lines to Oracle Assets for posting as fixed assets. You can also define
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retirement adjustment assets and capture cost of removal and proceeds of sale amounts
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assets you are retiring that are part of a group asset in Oracle Assets. When your
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retirement activities are complete, you can generate asset lines for the RWIP amounts and
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send the lines to Oracle Assets for posting as adjustments to the accumulated depreciation
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between each of the subledger applications and Oracle General Ledger. Oracle Subledger
Accounting stores a complete and balanced subledger journal entry in a common data
model. Oracle Project Costing uses AutoAccounting, or the Project Budget Account
Generation workflow for integrated budgets, to derive default accounts for transactions.
You submit concurrent programs in Oracle Project Costing to generate accounting events
and create accounting entries in Oracle Subledger Accounting. Oracle Project Costing
predefines setup in Oracle Subledger Accounting so that it accepts the default accounts
to
that Oracle Project Costing derives without change. Oracle Subledger Accounting
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transfers the final accounting to Oracle General Ledger. If you define your own detailed
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accounting rules in Oracle Subledger Accounting, then Oracle Subledger Accounting
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overwrites default accounts, or individual segments of accounts, that Oracle Project
Costing derives using AutoAccounting.
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Agenda
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Chapter 1 - Page 11
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You can use Oracle Project Costing to collect costs associated with all of your project
activities.
35
For example, you can use indirect projects to track costs associated with research and
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development, non-billable sales proposal activities, or general overhead operational costs for
departments such as purchasing or human resources. Capital projects enable you to capture
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construction-in-process (CIP) costs for assets you are creating. You can also use capital
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projects to capture the cost of removal and proceeds of sale amounts (RWIP) for assets you are
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retiring. You also can track costs associated with contract projects. In conjunction with Oracle
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Project Billing, you can generate revenue and customer invoices for contract projects. This
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For additional discussion regarding contract projects, see the course titled “R12.x Project
Billing Fundamentals.”
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Oracle Projects provides a centralized resource pool as part of the core foundation in which
employees and contingent workers are identified as resources. Each of the applications in the
35
• Oracle Project Costing: Collects project-related timecard and expense report costs for
resources. Provides resource cost controls and cross-charging for shared resources.
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• Oracle Project Billing: Generates revenue and invoices by billing labor hours on a
project.
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• Oracle Project Management: Creates a budget for labor costs to plan and manage the
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Resources can charge time to projects. For labor costs, you can:
• Associate each labor expenditure item with a scheduled work assignment and a work type.
• Maintain labor cost rate schedules by employee or by job.
• Calculate costs based on labor.
• Override labor cost rates for individuals.
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• Define a method for calculating overtime cost.
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• Maintain burden schedules to calculate additional costs of doing business that support the
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raw costs.
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• Report on actual resource utilization based on actual hours from timecards.
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• Query expenditure items for specific resources.
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Oracle Project Costing integrates with Oracle Time & Labor to capture project-related
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timecards for resources.
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Resources can also charge expenses to projects. Oracle Project Costing integrates with Oracle
Internet Expenses and Oracle Payables to capture project-related expense reports.
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Note: Employees and contingent workers do not have to be schedulable project resources to
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charge time and expenses to projects. Optionally, you can use transaction controls to control
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charges to tasks based on the resources assigned to the workplan tasks.
Cross Charge
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When projects share resources within an enterprise, it is common to see those resources shared
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across organization and country boundaries. Further, project managers can also divide the work
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into multiple projects for easier execution and management. Oracle Project Costing provides
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cross charge features to enable project managers to view the current total costs of the project,
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Project Allocations
You can use the allocations feature to distribute cost amounts between and within projects and
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tasks, or to projects in other organizational units. You can select resources groups and
7@
resources when you define allocation sources and proration basis methods.
35
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Costing Flow
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Costing Flow
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Oracle Project Costing enables you to track and account for all project costs. You can enter
transactions directly into Oracle Project Costing using expenditure batches, import transactions
35
from other Oracle Applications, such as Oracle Time & Labor, or import transactions from
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external systems.
Costing Flow Example (Labor Cost)
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2. PRC: Distribute Labor Costs - Calculates the raw and burden cost amounts for labor cost
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expenditure items and uses AutoAccounting to determine the default debit account for
each expenditure item.
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Accounting, if you select No for the parameter Transfer to GL, then you run must the
program PRC: Transfer Journal Entries to GL to send journal entries to Oracle General
Ledger.
6. Journal Import (in Oracle General Ledger - Imports the final accounting entries from
Oracle Subledger Accounting into Oracle General Ledger.
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Oracle Project Costing is an integrated cost management solution for all projects and activities
within an enterprise. With Oracle Project Costing you can manage costs across currency and
35
organizational boundaries. Oracle Project Costing also acts as a central repository of project
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You can use pre-approved batches to enter expenditures directly into Oracle Project Costing
and Transaction Import to import expenditures into Oracle Project Costing from external
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sources. In addition, you can use Microsoft Excel Integration to enter expenditures and then
import the expenditures into Oracle Project Costing. Oracle Project Costing also integrates
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with other Oracle applications. You can collect project-related costs in applications such as
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Oracle Time & Labor, Oracle Purchasing, Oracle Payables, Oracle iProcurement, Oracle
Inventory, Oracle Project Manufacturing, Oracle Asset Tracking, and Oracle Internet
Expenses.
Manage Costs
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Manage Costs
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After you collect costs, you can perform adjustments as needed. You can also use features such
as cross charge, burdening, project allocations, and asset capitalization to further process the
35
costs. The adjustment functionality in Oracle Project Costing gives you control over your
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project costs. You can adjust your project costs online, create accounting for the adjustments,
and provide a historical audit trail of all activities. You can perform a wide variety of
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billable status of expenditure items, recalculating raw or burdened costs, splitting expenditure
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Cross Charge
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A cross charge takes place when the expenditure organization of an expenditure item is
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different from task owning organization of the task being charged. These organizations are
called the provider and receiver organizations. The organizations can be within the same
operating unit or belong to different operating units. You may perform additional cross charge
processing to pass costs or share revenues between the provider and receiver organizations.
This processing includes creating borrowed and lent accounting entries or generating
intercompany invoices.
Burden costs are costs of doing business that support raw costs. For example, you can define a
burden cost code of G&A to burden specific raw costs with general and administrative
overhead costs. You can create subledger accounting for burden cost and post the accounting to
Oracle General Ledger.
Project Allocations
The allocations feature in Oracle Project Costing can distribute amounts between and within
to
projects and tasks, or to projects in other organizational units. For example, you can allocate
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amounts such as salaries or administrative overhead across several projects and tasks.
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Your allocations can be as simple or elaborate as you like. You identify the amounts you want
to allocate (source) and then define the targets, the projects and tasks to which you want to
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allocate the source amounts. Optionally, you can offset the allocations with reversing
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transactions. The system gathers source amounts into a source pool, and then allocates to the
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targets using the basis method that you specify in the allocation rule. You can use a basis
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method of Spread Evenly to divide the source pool amount equally among all the chargeable
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target tasks included in the rule. Alternatively, you could select Prorate as the basis method to
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use the attributes set in the Basis window.
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When you allocate amounts, you create expenditure items whose amounts are derived from one
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or more of the following sources:
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• Existing summarized expenditure items in Oracle Project Costing
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• A fixed amount
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Asset Capitalization
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Using asset capitalization functionality, you can define capital assets and capture construction–
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in–process (CIP) and expense costs for assets you are creating. When you are ready to place
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assets in service, you can generate asset lines from the CIP costs and send the lines to Oracle
Assets for posting as fixed assets. You use capital projects to capture the costs of capital assets
in.
You can also define retirement adjustment assets and capture cost of removal and proceeds of
sale amounts (collectively referred to as retirement costs, retirement work–in–process, or
35
RWIP) for assets you are retiring that are part of a group asset in Oracle Assets. When your
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retirement activities are complete, you can generate asset lines for the RWIP amounts and send
the lines to Oracle Assets for posting as adjustments to the accumulated depreciation accounts
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You can also calculate and record capitalized interest for capital projects. Capitalized interest
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(also referred to as Allowance for Funds Used During Construction) is an estimate of the
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interest cost that enterprises incur when they invest in long–term capital projects. Subject to
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accounting rules and regulatory guidelines, enterprises can capitalize interest as part of the total
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cost of acquiring and constructing assets that require an extended amount of time to prepare for
their intended use.
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From Oracle General Ledger, you can drill down to subledger details from the Account
Inquiry, Enter Journals, or View Journals windows for journals that have specific journal
35
sources assigned to them. For example, you can select a labor cost journal entry line with the
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source Projects and select the Line Drilldown button to view the details in Oracle Subledger
Accounting. Next you can choose to either view the subledger journal entry or to view the
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transaction. When you choose to view the transaction, the system drills down to Oracle Project
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Costing and queries the individual expenditure items that make up the subledger journal entry
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in expenditure inquiry.
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You can also perform inquiries directly in Oracle Subledger Accounting to view transaction
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details for accounting events. When you view a transaction for a cost accounting event, Oracle
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Subledger Accounting drills down to Oracle Project Costing and automatically opens and
queries information in expenditure inquiry. Similarly, you can drill down to other subledger
applications to view transaction information for the accounting events that originated in those
applications. In Oracle Subledger Accounting, you can query accounting events, journal
entries, and journal entry lines based on multiple selection criteria.
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You can use expenditure inquiry in Oracle Project Costing to view final subledger accounting
entries for expenditure items. Use the View Accounting option from the Tools menu to review
35
accounting entries. You must create accounting in final mode for the accounting events
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Subledger Accounting, and transactions accounted in an external system and interfaced into
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Oracle Project Costing, the View Accounting option displays accounts from the cost
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You can also use expenditure inquiry to view detailed information for each expenditure item.
Depending on the expenditure item, you can:
35
• View cost distribution line information for each expenditure item, including the default
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accounting entries that Oracle Project Costing derived using AutoAccounting, the PA
and GL period, and the accounting event generation status.
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• View the revenue distribution lines for billable expenditure items (contract projects).
• Drill down to Oracle Payables if the supplier cost expenditure item was interfaced to
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• Drill down to the Receipt Transaction Summary window in Oracle Purchasing for
receipt accrual expenditure items.
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• Drill down to view purchase order details in Oracle Purchasing for contingent worker
labor cost expenditure items that are associated with a purchase order.
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Summary
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Chapter 1 - Page 23
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Quiz
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Answer: a, d
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a
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Chapter 1 - Page 24
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Quiz
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Answer: b, c
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a
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Chapter 1 - Page 25
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Quiz
Answer: b
Pr
iya
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a
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Chapter 1 - Page 26
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Quiz
Answer: a
Pr
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a
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Chapter 1 - Page 27
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Pr
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a
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Chapter 1 - Page 28
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Pr
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a
Chapter 2 - Page 1
Chapter 2
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Chapter 2 - Page 2
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Chapter 2 - Page 3
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Objectives
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Chapter 2 - Page 4
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Agenda
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Chapter 2 - Page 5
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You can create a project with one structure defined for workplan management purposes and
another defined for financial management purposes, or you can use one structure for both
35
purposes:
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• Workplan Management
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- The workplan management functionality helps project managers and team members
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managers track billing, costs, budgets, and other financial information for projects.
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You can use three predefined project classes that track the following types of information:
• Indirect projects - Track overhead activities and costs.
• Capital projects - Track asset development activities and costs, and costs are capitalized
as one or more assets.
• Contract projects - Contract projects track cost, revenue, and billing.
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Oracle Project Foundation predefines project classes, but you define project types as part of
your implementation. The project type controls how Oracle Project Foundation creates and
35
processes projects, and is a primary classification for the projects your business manages. You
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must set up at least one project type to create projects. You must set up project types for each
operating unit.
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You use project templates to create new projects. When you create a project from a project
template or an existing project, Oracle Project Foundation copies the financial structure from
35
the source project or template. Project templates belong to only one operating unit. You can
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maintain and copy project templates within an operating unit. However, project template
numbers are unique across operating units. A project template number cannot duplicate any
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For additional information, see the course titled "R12.x Project Foundation Fundamentals."
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A project financial structure is a task tree showing the organization of project work. It can be
as simple or detailed as you want it to be. There are no limits in width or levels. The position of
35
the task in the hierarchy determines what you can do with it:
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• Top Task
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- For example, use top tasks for budgeting and rollup reporting.
a
• Middle Task
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• Lowest Task
- A task that is at the bottom of the structure, without any child tasks. A top task can
also be considered a lowest task, if the task does not have any child tasks.
- For example, use lowest tasks for transaction entry, budgeting, and override entry.
Expenditures are always charged to a lowest task.
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• Project Name - A short and descriptive name of a project. Use this name to find and
identify a project.
35
• Long Name - A longer, unique descriptive name for the project. It can be up to 240
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• Project Number- A unique identification number of a project. You use this number to
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find and identify the project. You can manually enter a project number, or let the system
automatically generate one for you. For audit trail purposes, you cannot modify a project
a
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number after you charge expenditure items, requisitions, purchase orders, or supplier
invoices to the project. If project numbering is automatic, then you cannot modify the
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to
- Enterprise
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• Location - Use project location information to match resource location to work site
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location (the location of the project). Location includes three attributes:
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- City
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- Region
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- Country
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Quiz
Answer: a
Pr
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a
Chapter 2 - Page 12
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Quiz
Answer: b
Pr
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a
Chapter 2 - Page 13
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Agenda
Pr
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a
Chapter 2 - Page 14
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• Burden Schedule
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- Enter the burden schedule you want to use for this project or task.
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• Burden Hierarchy
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- Enter the burden hierarchy you want to default to each burden schedule version.
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• Fixed Date
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- Enter a fixed date for the burden schedule if you want all expenditure items to be
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Organization Overrides
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Organization Overrides
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You can reassign an employee’s or an entire organization’s costs and revenue to a different
organization for a particular project. When you enter an organization distribution override, the
35
new organization you enter overrides the expenditure organization Oracle Project Costing uses
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actual expenditure organization. You can enter the following information in the Organization
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Overrides window:
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• Source Organization - Enter the source organization whose costs and revenue you want
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• Employee Name/Number - Enter the name and number of the employee for this project
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Project Currency
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Project Currency
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You define a project currency for each project. This currency can differ from the functional
currency of the operating unit that owns the project. You can select any active currency defined
35
In a multinational business environment, employees from locations across the world can report
to one operating unit. Therefore, an operating unit can own projects being managed and
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implemented from various remote sites. The project managers of these projects need the ability
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to report project costs and revenues in the local currencies of the countries where the work is
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being performed. To accomplish this, you have the ability to define a project currency that
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differs from the functional currency of the operating unit owning the project.
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- The functional currency of the operating unit that owns the project.
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• Project Currency
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When you enter transactions in a currency that is different from functional currency or project
currency, Oracle Project Costing must convert the transaction amount to the functional and
project currencies. To convert transaction currencies, Oracle Project Costing must first
determine the exchange rate type and exchange rate date.
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When you create a new project, the system copies the default value for the project currency
code from the functional currency defined in the Implementation Options for the project-
35
owning operating unit. You can override the default currency code and enter default
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conversion attributes for the project in the Costing tab of the Currency window. Oracle Project
Costing displays the attributes you select as the default values during expenditure entry, and
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To convert transaction currencies to functional and project currencies, Oracle Project Costing
must first determine the exchange rate type and exchange rate date. Each attribute is
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determined separately. If Oracle Project Costing finds a rate type in step one, but no rate date is
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present at that level, then it uses the rate type and then follows the logic to the next level to
determine the rate date. During project and task setup, Oracle Project Costing copies the values
you enter to all the underlying tasks in the financial structure.
Quiz
Answer: b
Pr
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a
Chapter 2 - Page 20
ide no
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Agenda
Pr
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a
Chapter 2 - Page 21
ide no
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Oracle Project Costing provides you with many levels of charge controls:
• Project Status - You can use the project status to control whether any charges are allowed
35
• Task Chargeable Status - You can specify a lowest task as chargeable or non–chargeable
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• Transaction Dates -You can specify the transaction dates of a lowest task to record the
date range for which charges are allowed for the task. You can also specify transaction
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• Transaction Controls - You can define transaction controls to specify the types of
transactions that are chargeable or non–chargeable for the project and tasks.
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Project Statuses
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Project Statuses
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When you define a status, the Status Controls region contains a list of actions that are allowed
or restricted for each status. To allow charges on a project, you must assign the project a status
35
with the status control Create New Transactions enabled. To allow users to adjust transaction
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on a project, you must assign the project a status with the status control Adjust Transactions
enabled. For additional discussion regarding defining project statuses, see the course titled
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Note: The Create New Transactions status control only affects new transactions. It does not
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prevent reversals that Oracle Project Costing creates when you adjust transactions. In addition,
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it does not prevent you from splitting transactions. For example, if you change the project
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status to a status that does not allow new transactions and transfer an existing expenditure item
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to another project, then Oracle Project Costing still creates the reversing expenditure item on
the original project and task.
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The Allow Charges check box controls whether or not you can charge new expenditure items
to a task. The default setting is to allow charges for all new tasks. Disable the Allow Charges
35
Note: This task-level control only affects new transactions. It does not prevent reversals. For
example, if you disable the option for a task and transfer an existing expenditure item from that
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task to a new task, then Oracle Project Costing still creates the reversing expenditure item on
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Transaction Dates
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Transaction Dates
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project. You cannot charge an expenditure item to a project if the expenditure item date falls
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outside the project-level transaction dates. You must enter a start date to enter a finish date.
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Task transaction dates must be within the corresponding project dates and within the dates of
the parent task. The transaction start and finish dates control the transactions that can be
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charged to the task. You cannot charge an expenditure item to a task if the expenditure item
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date falls outside the task dates. Default values for task transaction dates are the project
transaction dates (for top tasks) or the parent task’s transaction dates (for subtasks).
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Transaction Controls
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Transaction Controls
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Use transaction controls to configure your projects and tasks to allow only charges that you
expect or plan. You can also define which items are billable and non-billable on your contract
35
projects. For capital projects, you can define which items are capitalizable and non-
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capitalizable. This proactive means to control charges to projects enables you to better manage
your projects. You enter transaction controls in the Project Options and Task Options windows.
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You must specify either an employee or an expenditure category for each record. You can
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Transaction controls that you define for people (employees and contingent workers) do not
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apply to transactions that are not associated with people. This includes supplier cost
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transactions entered for a supplier not associated with a person, and usage items incurred by an
organization and not a person. If you define transaction controls to list people who can charge
to your project, then Oracle Project Costing allows transactions incurred by those people. It
also allows any supplier cost transactions and usage items incurred by an organization, and any
other transactions that do not require an employee number.
Oracle Project Costing validates the transaction using the person associated with the supplier.
For example, if you specify that Donald Gray cannot charge to the project, and you enter an
expense report item for the supplier GRAY, DONALD who is associated with the person
Donald Gray, Oracle Project Costing does not allow you to charge the item to the project,
because it validates the transaction controls that you have defined.
Scheduled Expenditures Only Controls
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When Oracle Project Resource Management is installed, you can specify that only employees
with scheduled work assignments are allowed to charge labor and expense report transactions.
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Specifying Billable and Capitalizable Transactions
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You can control what transactions for contract projects are non-billable and what transactions
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for capital projects are non-capitalizable when you set the Billable/Capitalizable field. You can
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choose between the options of No or Task Level. Select No if you want the charges to be non-
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billable or non-capitalizable. Select Task Level if you want the billable or capitalizable status to
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default from the task to which the item is charged.
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Workplan Resources Only Controls
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You can control charges to tasks based on the people assigned to the workplan tasks. For
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information about the validation rules for timecards and expense reports when the Workplan
Resources Only control is set with the other transaction control attributes, see the Oracle
Project Costing User Guide. ide no
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Person Type Control
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You can select no value, Employee Only, or Contractor Only from the list in the Person Type
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field. You can use this control to specify whether transactions incurred by only employees,
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only contractors (contingent workers), or both are chargeable. For additional information, see
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You can enter an Effective From and Effective To date for each transaction control record to
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define transactions as chargeable for a given date range. You must specify an Effective From
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date. The default Effective From date is the start date of the project or task. The Effective To
date is optional.
35
Oracle Project Costing checks all levels of transaction controls when you try to charge a
transaction to a project. Oracle Project Costing checks the control when you:
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chargeable in the transaction controls. Exclusive transaction controls is the default setting.
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When you use exclusive transaction controls, you specify the non-chargeable criteria. Disable
the Limit to check box on the Transaction Controls window to make your transaction controls
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exclusive.
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Inclusive transaction controls limit charges to only those expenditures that meet the specified
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transaction control criteria. Oracle Project Costing rejects any expenditure that are not listed as
chargeable in the transaction controls. When you use inclusive transaction controls, by default,
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nothing is chargeable. You must specify the chargeable criteria. Enable the Limit to check box
on the Transaction Controls window to make your transaction controls inclusive.
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You can use transaction controls to specify whether to allow charges, further controlling the
allowable charges. You usually select Chargeable when you use inclusive transaction controls.
35
To define more complex rules for implementing company-specific expenditure entry policies,
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you can use the transaction control extension. Some examples of rules that you may define are:
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• You cannot charge new transactions to projects for which the work is complete. You can
only transfer items to these projects.
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Oracle Project Costing checks all levels of chargeability control when you try to charge a
transaction to a project. If the expenditure item passes the first three chargeability controls,
35
Quiz
Answer: c
Pr
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a
Chapter 2 - Page 31
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Summary
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a
Chapter 2 - Page 32
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Overview of Budgetary
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Chapter 3
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Chapter 3 - Page 2
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Objectives
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Chapter 3 - Page 4
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Agenda
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Chapter 3 - Page 5
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You can enforce budgetary controls against a GL budget and a project cost budget. Budgetary
controls enable you to monitor and control expense commitment transactions. Expense
35
commitment transactions are transactions for non-inventory items. Oracle Project Costing
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Note: Budgetary controls are not enforced for project-related expense reports entered in Oracle
Payables because you generally enter expense reports after costs are already incurred.
Therefore, you should ensure that your procedures for approving expense report expenditures
include verification of available funds according to your business requirements.
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A time interval defines the budget amounts and the transactions included in the available funds
calculation. Time interval settings identify the beginning and the ending periods included in the
35
calculation. The amount type identifies the beginning period and a boundary code identifies the
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ending period. The budgetary control process determines available funds by summing the
budget amounts and subtracting actual and committed transaction amounts for a time interval.
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If the budget is time-phased by GL period, then the GL period is used. Alternatively, if the
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The Amount Type defines the start of a time interval to determine funds availability:
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• Period To Date - From the start of the period in which the expenditure item date falls
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• Year To Date - From the start of the year in which the expenditure item date falls
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Only certain combinations of amount type and boundary code are valid.
35
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You use budgetary control levels to set the degree of control the system imposes on project
commitment transactions. You can enter default control levels at the project type, project
35
template, and project levels. You can also define default values for resource lists. Select from
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• Advisory - The transaction is accepted when sufficient funds are not available, but the
system issues a warning notification that available funds are exceeded.
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When control levels are either Absolute or Advisory, the budgetary control process first tests
the lowest budget level to determine the availability of funds. If funds are available for a
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transaction at the lowest level, then the validation tests the next level in the budgetary control
hierarchy. The process continues until the transaction passes all levels or fails at any level. If a
transaction fails budgetary control at a level with a control level of Absolute, the process is
discontinued. However, if the control level is Advisory, an insufficient funds warning
notification is generated and the budgetary control process continues to the next level.
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The diagram illustrates an example of a budgetary control rollup that reflects budget amounts
at all budget levels, including resource, resource group, lowest task, top task, and project.
35
At the resource level, the available funds for resources roll up into the available funds for the
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resource groups. The available funds for the resource groups roll up into the available funds for
the lowest tasks. The available funds for the lowest tasks then roll up into the available funds
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for the top tasks. Finally, the available funds for the top tasks roll up into the available funds
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For example, as illustrated for Top Task 2, Resource B1 and Resource B2 each have total
available funds of $10. Combined, the total funds of Resource B1 and B2 roll up into the
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available funds of $20 for Resource Group B. The total available funds of Resource Group B
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and Resource Group C roll up into the available funds for Lowest Task 2.1, which equals $40.
The total available funds for top task 2.1 roll up into the available funds for Top Task 2, which
equals $40. The total available funds of Top Task 2, $40, plus the total available funds of Top
Task 1, $20, roll up into the available funds for Project 1, which equals $60.
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budget amount is entered for a resource or resource group, then Oracle Project Costing treats
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the budget amount as zero. Transactions that map to resources with no budget amounts fail
budgetary control at an Absolute level and pass budgetary control with a warning at an
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Advisory level.
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A budget entry category called Unclassified is available at the resource list level. This category
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enables you to enter one budget amount for a group of resources. You can selectively control
costs for some resources within a resource group by entering specific budget amounts for those
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resources. You can then use the Unclassified category to budget for the remaining resources
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within the resource group. The Unclassified category serves as a budget line for any resource
for which a specific budget line does not exist.
Burden Cost Amounts
If burdening is enabled for a project, then all budgetary control is performed using the
transaction burdened cost. Oracle Project Costing provides the following methods of
accounting for burden costs:
- When you account for burden cost on the same expenditure item as raw costs, the
budgetary control process calculates the burden cost amounts for a transaction and
adds them to the raw cost amount. The process then maps the burdened transaction
amount to a budget line and performs the necessary budgetary control validation.
- When you use the Same Expenditure Item method of accounting for burden costs,
enter budget amounts for the burdened transaction costs.
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• Separate Expenditure Item
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- When you account for burden costs as separate expenditure items, the budgetary
s
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control process calculates the burden cost amounts for each burden cost component
and separately maps each burden amount and the raw cost amount to a budget line.
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Individual budgetary control validations are performed for each component. If any
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component fails validation, then the entire transaction is rejected.
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- When you use the Separate Expenditure Item method of accounting for burden
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costs and you are not using a resource list for budget entry, enter budget amounts
for the burdened transaction costs. The burden costs and the raw cost are mapped to
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budget lines using the same mapping rules and are therefore mapped to the same
line.
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- When you use this burden accounting method and you are budgeting using a
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resource list, the burden costs are not mapped using the resource for the raw cost.
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You must ensure that each burden cost component maps to a budget line with the
desired budgetary control setting. To do this, define your burden cost components
is a
th h
as resources on your resource list and then use these resources to enter budget
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amounts for burden costs. This enables you to enter a budgetary control setting for
each burden cost component and a control setting for budget lines defined for raw
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costs. If you do not want to impose budgetary controls on burden cost amounts,
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then you can assign a control setting of None for all budget lines for burden
component resources.
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components is to use the Unclassified budget entry category to budget for burden
cost amounts. If a budget line cannot be found for the burden cost components and
35
an Unclassified budget line exists, then the budgetary control process maps the
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Oracle Project Costing budgetary controls only apply to expense commitment transactions.
Budgetary controls do not apply to other project-related transactions such as timecards,
35
expense reports, or inventory item purchases. Therefore, when you enable budgetary controls
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for a project, it is recommended that you use one of the following strategies for defining cost
budget amounts:
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• Strategy 1: Define Two Budgets - Define an overall project cost budget. The overall cost
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budget tracks all project costs. Do not enable budgetary controls for the Approved Cost
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recommended that you create a user-defined budget type for the commitment budget.
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• Strategy 2: Define One Cost Budget - The second approach uses one cost budget for all
anticipated project costs. The budget includes separate budget lines for expense
commitment transactions and all other project costs. When you define a project, enable
budgetary controls using this budget type. It is recommended that a control setting of
None be entered for all other budget lines.
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select the Check Funds option for a transaction, and also during the transaction approval.
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In Oracle Project Costing, budgetary controls only apply to expense commitment transactions.
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You interface project-related expense commitment transactions from Oracle Purchasing and
Oracle Payables to Oracle Project Costing as supplier costs. After you interface supplier costs
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to Oracle Project Costing, you can adjust the expenditure items in Oracle Project Costing.
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You run the program PRC: Distribute Supplier Cost Adjustments to process the adjusted
supplier cost expenditure items. This program uses AutoAccounting in Oracle Project Costing
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to determine the default expense account for the adjustments. This program also performs a
budgetary control validation for transactions meeting all of the following criteria:
• The supplier cost originated in Oracle Purchasing or Oracle Payables
• The transaction is charged to a project with budgetary controls enabled
• The transaction is an expense item
budgetary control validation for the changed burden amounts. The program you run depends
on the burdening method for the project.
• PRC: Distribute Total Burdened Costs - Run this program if the project is set up to
account for total burdened costs.
• PRC: Create and Distribute Burden Transactions - Run this program if the project is
set up to account for burden costs by burden cost component.
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If funds are available for the adjusted expenditure amounts, then the adjustment item is cost
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distributed. If funds are not available for an item, then the item is not distributed and an
s
exception is reported.
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Oracle Project Costing also performs budgetary control validation for contingent worker labor
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costs related to a purchase order when you run the program PRC: Distribute Labor Costs or
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PRC: Distribute Labor Costs for a Range of Projects.
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If an item is not cost distributed as a result of a budgetary control failure, then you must
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perform one of the following actions and rerun the distribution program:
• Increase budget amounts so funds are available for the expenditure item.
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• Decrease the budgetary control level from Absolute to Advisory or None for the budget
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level causing the budgetary control failure.
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• For an adjusted item, undo the change that increased the expenditure item amount. For
example, if you increased a burden cost rate, then set the rate back to its original value.
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• For a transferred item, transfer the item to a task within the same project, or to another
is a
project or project task that has sufficient funds available or that does not have budgetary
th h
controls enabled.
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Purchasing and Oracle Project Costing generate accounting events when you check funds
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for a purchase order when top-down budgeting and burdening is enabled for the project.
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3. Budgetary control API calls the Oracle Subledger Accounting Online Process.
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4. Oracle Subledger Accounting Online Process processes the accounting events to create
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accounting entries and calls the Oracle Subledger Accounting Validation Routine.
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with the accounting entries and calls the PSA/GL funds check API.
6. PSA/GL funds check API first calls the Projects funds check API.
7. If a project-related transaction is being validated, then Projects funds check API checks
for funds availability and returns status to PSA/GL funds check API.
8. If Projects funds check API returns a success value, then PSA/GL funds check API
processes the transaction for GL funds availability.
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After the transaction is validated against the project budget, you can view the results from the
Funds Check Results window. The window displays budgetary control results for transactions.
35
Note: You can also view the budgetary control results from the source application after the
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funds validation action is performed. The results are displayed in an XDO report format.
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3. Choose the Find button to display the Funds Check Results window.
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4. Select a budget level tab to view information for a specified budget level.
For a list of budgetary control results messages, see the Oracle Project Management User
Guide.
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Oracle Project Costing maintains budgetary control balances for all projects that use budgetary
controls. For each budget line, the budget amount, the commitment transactions total, and the
35
total actuals related to commitment transactions are maintained. The system also calculates
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balances. When you run PRC: Maintain Budgetary Control Balances, the program updates the
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balances. The updated balances are displayed in the Budget Funds Check Results window. To
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determine how often to schedule the program, consider the number of project-related
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commitments your business creates each day as well as your online inquiry business needs.
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The Budget Funds Check Results window displays budget, actuals, commitments, and
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available funds balances for each budget level. The window includes a tabbed region for each
project budget level. The levels can include the following: project, top task, task, resource
group, and resource. You can use the window to review project-to-date transactions and to plan
future expenditures. You can also use the information in this window, along with the
Transaction Funds Check Results window, to troubleshoot budgetary control failures.
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A transaction is subject to the budgetary controls defined for only the ledger in which the
transaction originates. Therefore, when you enable budgetary controls for a project, you cannot
35
• In Ledger One (L1), budgetary controls are enabled in Oracle General Ledger and Oracle
Payables.
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• In Ledger Two (L2), budgetary controls are not enabled in any application.
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Project A is defined in L1 and budgetary controls are enabled for the project. If you enter a
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commitment transaction in L2 for Project A, the transaction does not undergo budgetary
control validation, because budgetary controls are not enabled in L2.
Quiz
Answer: a
Pr
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a
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Chapter 3 - Page 21
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Quiz
Answer: d
Pr
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a
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pr
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35
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Chapter 3 - Page 22
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Quiz
Answer: b
Pr
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a
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Chapter 3 - Page 23
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Agenda
Pr
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Chapter 3 - Page 24
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budgets consume funds from the organization-level budget and are used to control spending for
individual projects.
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from defined project budgets. The organization-level budget amounts are an accumulation of
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project budget amounts and may also include budget amounts from other sources. Financial
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managers use the organization-level budgets to view budgeted figures for the organization as a
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whole, while project managers maintain independent budgets to monitor spending and revenue
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Oracle Project Costing uses the Project Budget Account Generation workflow to generate
default accounts for budget lines. The budgets that you define in Oracle General Ledger are
35
account-level budgets (by account and GL period). Therefore, when you enter project budget
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amounts for integrated budget types, you must use a budget entry method that is time-phased
by GL period, and you must assign an account to each project budget line.
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If you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
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Oracle Project Costing generates using the Project Budget Account Workflow. You run the
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program PRC: Transfer Journal Entries to GL to transfer the final subledger journal entries
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Important: If you update account derivation rules for budgets in Oracle Subledger
Accounting, then you must carefully consider the affect of the updates on existing integrated
budgets. The baseline process fails if a revised account derivation rule overwrites accounts for
budget lines that are associated with transactions.
For top-down budget integration, Oracle Project Costing generates accounting events to create
project budget encumbrance accounting entries. Oracle Project Costing generates the
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the process to create the subledger accounting in final mode when you create a baseline version
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for a bottom-up integrated project budget.
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In addition, when you initiate the Check Funds action for an integrated budget, Oracle Project
Costing creates accounting in draft mode in Oracle Subledger Accounting.
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Oracle Project Costing predefines the Budgets event entity to use for integrated budgets. An
event entity enables Oracle Subledger Accounting to handle the accounting for similar business
35
In addition, Oracle Project Costing predefines the Budget event class and two event types
Budget Year End Rollover and Budget Baseline, for the Budgets accounting event entity. An
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event class represents a category of business events for a particular transaction type or
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document. An event type represents a business operation that you can perform for an event
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class. Oracle Projects generates accounting events for the Budget event class when you enable
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Oracle Project Costing also predefines event classes and event types for the Requisition,
Purchase Order, and Release accounting event entities in Oracle Purchasing, and for the AP
35
Invoices accounting event entity in Oracle Payables. These event classes and event types are
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Oracle Project Costing creates project encumbrance entries when you enable top-down budget
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integration for a project. Oracle Project Costing provides this setup in Oracle Purchasing and
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Oracle Payables so that these applications can create encumbrance for burden costs.
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Oracle Purchasing and Oracle Payables create encumbrance journals whenever any funds
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related action is performed for a document. For example, when you perform a Check Funds
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action for document, the encumbrance accounting events are processed to create the
encumbrance journals in draft mode. When you perform a Reserve Funds action for a
document, the encumbrance accounting events are processed to create the encumbrance
journals in final mode and the funds balances are updated. After processing is complete, you
can review the updated funds balances.
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You can choose to perform a budget check funds before you submit the budget for baseline
processing. The following processing occurs during a budget check funds:
35
1. Oracle Project Costing determines the default accounts using the Project Budget Account
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Generation Workflow.
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- For top-down integrated budgets, Oracle Project Costing validates existing approved
transaction amounts (at resource, resource group, task, top task and project levels)
a
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4. Oracle Subledger Accounting creates accounting entries in draft mode for the accounting
events.
5. Oracle Project Costing validates funds.
- For bottom-up budget integration, Oracle Project Costing validates the budget
amounts against an organization-level Oracle General Ledger budget.
against the General Ledger Funding Budget and then validates existing approved
transaction amounts (at account level) against the project budget.
6. Oracle Project Costing updates the budget lines with the accounting information from
Oracle Subledger Accounting and the budget check funds result status.
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When you create a baseline version for an integrated project budget, the baseline process
performs the following activities:
35
3. Validates funds.
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- For top-down integrated budgets, the baseline process validates existing approved
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transaction amounts (at resource, resource group, task, top task and project levels)
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- Note: When you use the PA: Budget Workflow to control budget status changes,
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Oracle Project Costing performs funds validation only after the budget is approved.
4. Generates accounting events to reverse the accounting for the most recent baseline
version, if one exists, and to create accounting for the new baseline version.
- For bottom-up budget integration, the baseline process generates accounting events to
create budget journal entries.
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- For top-down integrated budgets, the baseline process validates budget amounts
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against the General Ledger Funding Budget and then validates existing approved
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transaction amounts (at account level) against the project budget.
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- Note: If the budget fails funds validation, then the baseline process removes the
accounting entries it created from Oracle Subledger Accounting and updates the
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submitted budget version to Rejected status.
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You run the program PRC: Transfer Journal Entries to GL to transfer the journal entries to
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Oracle General Ledger. When you submit the program PRC: Transfer Journal Entries to GL,
you can optionally choose to have the program post the journal entries. Otherwise, you can
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manually post the journal entries in Oracle General Ledger. The baseline program updates
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funds balances in Oracle General Ledger. The program PRC: Transfer Journal Entries to GL
does not affect funds balances.
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For non-integrated budgets with budgetary controls, the baseline process validates the
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submitted budget version, creates baseline version, and validates existing transaction amounts
against the project budget. The baseline process does not generate and process accounting
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When a project uses budgetary controls, the budget baseline process launches the PA: Budget
Integration workflow to perform the baseline processing tasks.
35
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You can review and optionally override default accounts, or an account segment, generated by
the Project Budget Account Generation workflow.
35
Note: Do not update the account for the budget line if the budget line is associated with
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If you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
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transactions exist for a budget line, then Oracle Project Costing updates the budget line with
the new account when you manually update accounts on the Budget Accounts Details window
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and when you define account derivation rules in Oracle Subledger Accounting to overwrite
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accounts.
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You can use the subledger accounting events drill-down and inquiry menu options in Oracle
Project Costing, Oracle Payables, and Oracle Purchasing to view information about budget and
35
• Perform an inquiry on accounting events, journal entries and journal entry lines based on
multiple selection criteria.
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accounting event.
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• Compare subledger journal entry information for any two journal entries.
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• View subledger journal entry lines for a number of different documents or transactions.
• View subledger journal entry in T-account format.
Quiz
Answer: a
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35
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Agenda
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pr
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35
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Chapter 3 - Page 39
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When enterprises use top-down budgeting, top management defines spending limits for each
organization. Budgetary controls are set to enforce the limits, and encumbrance accounting
35
The reservations ensure that funds will be available when project costs are incurred, and
provide a complete picture of funds available for future use.
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budget or budgets in Oracle General Ledger. To set an organization's spending limits, you enter
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funding budget balances for the accounts assigned to each budget organization.
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To reserve funds in General Ledger funding budgets for anticipated project costs, define
budget integration using the Budgetary Controls option from the Projects, Templates window.
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When you define integration for your project, use the budget type you plan to use for your
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commitment budget and select the Encumbrance balance type. You must define Integration
before you create a baseline version for the project budget and before you enter any project
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are approved, the project encumbrance is reduced and new commitment encumbrances created.
When you define integration using the Encumbrance balance type, the system automatically
enables budgetary controls for the project. The Project control level is automatically set at
Absolute and cannot be changed. Oracle Project Costing uses budgetary controls to ensure that
the project commitment total for expense transactions never exceeds the project commitment
budget and the amounts reserved in the General Ledger funding budget.
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Creating a Baseline Budget Version
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When a project is set up to use top-down integration, the process to create a baseline version
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varies depending on whether you use workflow to control budget status changes.
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• If you do not use workflow to control budget status changes, then Oracle Project Costing
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calls the PA: Budget Integration Workflow.
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• If you use workflow to control budget status changes, then Oracle Project Costing changes
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the budget version status to In Progress and calls the budget approval workflow. After the
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budget is approved, baseline processing continues for the budget version. Oracle Project
Costing displays any rejections encountered during baseline processing in the budget
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approval notification.
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When you submit a top-down integrated budget, Oracle Project Costing:
• Validates the submitted budget version. ide no
• Creates a baseline version
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• Validates existing approved transaction amounts (at resource, resource group, task, top
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Subledger Accounting
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budget.
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If the baseline version is the initial baseline version for the budget, then Oracle Project Costing
35
creates and validates encumbrance journal entries for this budget version. If a prior baseline
version exists, then Oracle Project Costing creates and validates reversal encumbrance journal
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entries for the most recent baseline version and new encumbrance journal entries for the new
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baseline version.
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You run the program PRC: Transfer Journal Entries to GL to transfer encumbrance journal
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When you submit the program PRC: Transfer Journal Entries to GL, you can optionally choose
to have the program post the journal entries. Otherwise, you can manually post the journal
entries in Oracle General Ledger. The baseline process updates funds balances in Oracle
General Ledger. The program PRC: Transfer Journal Entries to GL does not affect funds
balances.
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You enter a top-down integrated budget for a project. The budget entry method must use GL
periods for budgeting. In this example, the budget entry method uses a resource list that is
35
grouped into resource groups (expenditure organizations in this example). Each resource group
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The Account Generator creates GL accounts for each budget line. The baseline process
validates the submitted budget version, creates a baseline version, validates existing approved
35
transaction amounts (at resource, resource group, task, top task and project levels) against the
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project budget, generates accounting events, creates encumbrance journal entries in final mode
for the accounting events in Oracle Subledger Accounting, validates budget amounts against
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the General Ledger Funding Budget, and validates existing approved transaction amounts (at
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The Finance Department submits the program PRC: Transfer Journal Entries to GL and selects
Yes for the parameter Post in General Ledger. The program transfers encumbrance journal
35
entries from Oracle Subledger Accounting to Oracle General Ledger and posts the journal
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When you define top-down budget integration for a project, it is recommended that you create
a commitment budget for tracking and controlling the project's expense commitment
35
• General Ledger accounts must be assigned to all budget lines for integrated budget types.
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• When you create a budget for an integrated budget type, you must use a budget entry
method that is time phased by GL period.
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• You must create a budget line for each budget category and budget period for which
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• The process to create a baseline version varies depending on whether you use workflow to
control budget status changes.
• Additional validations occur when you create a baseline for an integrated project budget.
Note: For top-down budget integration, you also need to enable encumbrance accounting in
Oracle Purchasing and Oracle Payables and budgetary control in Oracle General Ledger. See
the section of this lesson titled "Implementation Steps."
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When you modify a top-down integrated budget, the baseline process performs the following
tasks for the new budget version:
35
The system validates budgetary controls when budget amounts are deleted or decreased or
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when the budget entry method is changed. When budget amounts are reduced, the baseline
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process performs budgetary control validations to ensure that existing transaction totals do not
exceed available funds calculated using the new budget amounts. When the budget entry
method is changed and a budget version is created using new budget categories, the baseline
process maps all existing transactions in open GL periods to a budget line in the new budget
version. Budgetary control validations are then performed for each transaction that uses
budgetary controls defined for the new budget lines. If any transaction generates a budgetary
control failure, the baseline process fails. If the baseline process fails, you can troubleshoot by
use the Funds Check Results window to view the rejection reason for the particular transaction
that failed during the baseline process.
Funding Budget Controls and GL Period Statuses
When budget amounts are increased or new budget lines are entered, additional funds must be
reserved in the funding budget. Therefore, the baseline process performs a budgetary control
validation against the funding budget to ensure that funds are available for the additional
to
project budget amounts. If any budgetary control failures are returned, the baseline process
fails.
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Project Encumbrance Maintenance
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When a baseline is successfully created for a revised budget, the project encumbrance against
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the funding budget is adjusted. If new budget lines are added or existing budget line amounts
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are increased, then additional funds are reserved in the funding budget. If budget lines are
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decreased or deleted, then project encumbrances are liquidated, reducing the project
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reservation. The Accounted Amount column on the By Account tab of the Budget Accounts
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Details window displays the encumbrance adjustment amounts. Positive values reserve
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additional funds and negative values reduce the current reservation.
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Year-End Processing
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Year-End Processing
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When budgeted funds for a fiscal year are not used by the end of the year, many businesses
move the available amounts to the next year. Organizations that operate under budget do not
35
lose the budgeted amounts. Instead, their spending limits for the next year are increased.
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The PRC: Year End Budget Rollover program transfers year-end balances for top-down
integrated project budgets to the next fiscal year. The program performs budget rollover
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functions for all selected top-down integrated budgets. The program calculates transfer amount
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for each project budget line by subtracting the total actual and commitment balances from the
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budgeted amounts. The program then adds the transfer amount for each project budget line to
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the budget amount for the first period of the next fiscal year.
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When the program PRC: Year End Budget Rollover is complete, you run the program PRC:
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Transfer Journal Entries to GL to transfer the encumbrance journal entries to Oracle General
Ledger. When you submit the program PRC: Transfer Journal Entries to GL, you can
optionally choose to have the program post the journal entries. Otherwise, you can manually
post the journal entries in Oracle General Ledger.
Agenda
Pr
iya
nk
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pr
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35
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Oracle General Ledger, budgets contain estimated cost or revenue amounts for a range of
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accounting periods. Budget organizations define the departments, cost centers, divisions, or
other groups for which budget data is maintained. You assign accounts to each budget
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organization. You create organization budget balances by entering budget amounts for the
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assigned accounts.
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You define budget integration using the Budgetary Control option from the Projects,
Templates window. You can use any project budget type to define bottom-up budget
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integration. You must define Integration before you create a baseline version for the project
budget and before you enter any project transactions. See the section of this lesson titled
"Implementation Steps."
Entering Budget Amounts and Generating Accounts
Next, you enter your budget and generate accounts in Oracle Project Costing.
to
the budget version status to In Progress and calls the budget approval workflow. After the
e
budget is approved, baseline processing continues for the budget version. Oracle Project
s
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Costing displays any rejections encountered during baseline processing in the budget
approval notification.
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The budget baseline process validates the submitted budget version, creates a baseline version,
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generates accounting events, creates budget journal entries for the accounting events in Oracle
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Subledger Accounting, and validates the budget amounts against an organization-level Oracle
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General Ledger budget. If the baseline version is the initial baseline version for the budget,
then the baseline process creates and validates budget journal entries for this budget version. If
n
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a prior baseline version exists, the baseline process creates and validates reversal budget
journal entries for the most recent baseline version and new budget journal entries for the new
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baseline version.
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Transferring Budget Journals to Oracle General Ledger
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After you create a baseline version for an integrated project budget, you run the program PRC:
Transfer Journal Entries to GL to transfer the journal entries to Oracle General Ledger and
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initiate the program Journal Import in Oracle General Ledger. If the baseline version is the
e m)
initial baseline version for the budget, then the program transfers the budget journal entries it
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creates for this version. If a prior baseline version exists, then the program transfers reversal
budget journal entries for the most recent baseline version and new budget journal entries for
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the new baseline version. The baseline process updates funds balances in Oracle General
Ledger. The program PRC: Transfer Journal Entries to GL does not affect funds balances.
in.
When you submit the program PRC: Transfer Journal Entries to GL, you can optionally choose
35
to have the program post the journal entries. Otherwise, you can manually post the journal
entries in Oracle General Ledger. You can review and post the entries using the General
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Agenda
Pr
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nk
a
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pr
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35
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Chapter 3 - Page 54
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You can set up your project to use budgetary controls with a non-integrated budget. Oracle
Project Costing does not generate and process accounting events for non-integrated budgets.
35
You define budget integration using the Budgetary Control option from the Projects,
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Templates window. See the budgetary control discussion in the section of this lesson titled
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"Implementation Steps."
Creating a Baseline Budget Version
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When you create the baseline budget version, the baseline process:
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Agenda
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35
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Chapter 3 - Page 56
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Budgeting Implementation Steps
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Chapter 3 - Page 57
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You can define additional core budgeting setup as needed. This setup includes budget change
reasons, budget types, and budget entry methods.
35
• Budget Change Reasons - You can select a budget change reason for budget versions and
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for individual budget lines. You can define your own change reasons.
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• Budget Types - Budget types define the different types of budgets that you plan for when
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you want to create budgets that use budgetary controls and budget integration features.
• Budget Entry Methods - Budget entry methods specify and control the following
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options:
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- The level of the work breakdown structure at which you enter a budget.
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- The time phase that you use to enter budget amounts, if any.
- Whether you enter amounts that are categorized by resources.
- The amounts that you can enter.
For additional information, see the "Implementing Oracle Project Management" section of the
Oracle Projects Implementation Guide.
Pr
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Implementing Budgetary Controls
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Chapter 3 - Page 59
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Note: The budgetary control process uses the following predefined encumbrance types:
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• PA: Days to Maintain BC Packets - Specify the number of days budgetary control
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results are maintained. The default value is 3. Increasing this value may slow the
performance of the budgetary control process. Use the Funds Check Results window to
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view budgetary control results for transactions that are not older than the number of days
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that you specify. The budgetary control results for transactions that pass budgetary
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control are available for online viewing in the Funds Check Results window only until
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- You run the concurrent program PRC: Maintain Budgetary Control Balances.
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- You create a baseline version for any project with budget integration.
- The transaction is older than the number of days specified for profile option.
• PSA: Budgetary Control Report Template – You can set this profile option at the site,
application, responsibility, and user levels. You must select Budgetary Control Results
Template to view budgetary control results from Oracle Purchasing and Oracle Payables.
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Define budgetary controls for non-integrated budgets and for top-down integrated budgets.
You can define budgetary controls for project types, project templates, and projects. Values
35
that you define for a project type are the default values for project templates. Values that you
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define for project templates are the default values for projects. When you define a project type,
indicate whether or not the default values for budgetary controls can be changed at the project
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level.
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2. Allow Override at Project Level - Check this box to allow users to modify the settings at
the project level.
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4. Non-Project Budget - Leave blank.
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5. Levels - Select a default control level for each budget level.
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6. Time Phase - Select an Amount Type and Boundary Code to be used when the system
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calculates available funds.
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For information about defining budgetary control setup for top-down integrated budgets, see
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the information in this section about implementing top-down integration.
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When you enable budgetary controls for a project, you must create a baseline version for your
project cost budget before you enter commitment transactions. If a baseline version does not
35
exist when you approve a commitment transaction, then the transaction fails and you receive an
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cost amounts. Oracle Project Costing uses burdened cost amounts to enforce budgetary
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controls. If you enter only raw cost amounts for a project budget with a budget entry method
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that allows the entry of burdened cost amounts, then Oracle Project Costing automatically
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copies the raw cost amounts to the burdened cost fields. These amounts are then used to
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When you create a baseline for a project budget for the first time, Oracle Project Costing
creates default budgetary control level settings for each budget level based on the values in the
35
Budgetary Controls option. You can override the default control level values for the baseline
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budget version. When you create subsequent baselines for the project budget, Oracle Project
Costing uses the revised budgetary control level settings and not the default settings. For
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example, if you override the budgetary control level for a task, Oracle Project Costing does not
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reset the task to the default value the next time that you create a baseline for the budget.
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If you add new tasks to the project or new resource groups or resources to the resource list
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assigned to the budget, the next time you create a baseline for the budget, Oracle Project
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Costing automatically creates default budgetary control settings for the new tasks, resource
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groups, or resources. You can override the default control level values for the baseline budget
version.
To adjust budgetary control levels, perform the following steps:
1. Navigate to the Budgets window.
2. Query your project cost budget.
3. Choose the History button to view the budget version history.
to
restore the default budgetary control settings for the project. When you select the Reset
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Defaults button, Oracle Projects resets all budgetary control settings to the default values,
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including any settings that you have manually overridden.
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Default Budgetary Controls and Changing the Budget Entry Method
You can change the budget entry method for a budget after you create a baseline version. If the
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budget entry level for the new budget entry method is different from the budget entry level for
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the current budget entry method, Oracle Project Costing resets to the budgetary controls to the
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default budgetary control level settings when you create the next budget baseline.
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For example, if the budget entry level of the current budget entry method is Top Tasks and the
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budget entry level for the new budget entry method is Lowest Tasks, Oracle Project Costing
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resets the budgetary controls to the default budgetary control level settings when you create the
next budget baseline. ide no
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When you integrate project budgets with non-project budgets, you use either top-down
integration or bottom-up integration.
35
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generate default accounts when a project budget is integrated with a non-project budget. You
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must customize the Project Budget Account Generation workflow process to generate accounts
according to your business needs.
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• You manually select the Generate Budget Accounting option from the Tools menu of the
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Budgets window.
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• You run the year-end rollover program for a top-down integrated budget to carry forward
the unspent project budget encumbrance amount from the year that is ending into the next
year.
When you activate the workflow from the Tools menu, an account is generated or regenerated
for all the defined budget lines. When the workflow is activated during budget submission,
accounts are only generated for budget lines that do not already have an assigned account.
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Oracle Project Costing predefines setup in Oracle Subledger Accounting to accept default
accounts from Oracle Project Costing without change. If you define your own detailed
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accounting rules in Oracle Subledger Accounting, then Oracle Subledger Accounting
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overwrites default accounts, or individual segments of accounts, that Oracle Project Costing
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derives using the Project Budget Account Generation workflow.
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For additional details, see the Oracle Projects Implementation Guide.
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• PA: Allow Override of Budget Accounts - This profile option enables you to control
whether you can manually override accounts generated by the Project Budget Account
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• PA: Enable Budget Integration and Budgetary Control Feature - To enable budget
integration for your projects, you must set this profile option to Y (Yes).
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• PA: Days to Maintain BC Packets - This profile option specifies the number of days
budgetary control results are maintained. For more information, see the discussion in this
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• PSA: Budgetary Control Report Template – You can set this profile option at the site,
application, responsibility, and user levels. You must select Budgetary Control Results
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Template to view budgetary control results from Oracle Purchasing and Oracle Payables.
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2. Allow Override at Project Level - Enable this box to allow users to modify the default
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3. Budget Type - Select a project cost budget type to be integrated. You can enable top-down
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4. Control Flag - Enable the Control Flag check box. Budgetary controls must be enabled for
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top-down integration.
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5. Balance Type - For top-down integration, the Balance Type must be Encumbrance.
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controls. The project budget controls must not allow a transaction to pass budgetary control if
the transaction will fail budgetary control validation against the funding budget. In general, the
project budget controls must be equal to or more restrictive than the funding budget controls.
Defining Top-Down Budget Integration for Project Templates and Projects:
1. Navigate to the Budgetary Control option of the Projects, Templates window.
2. Budget Type - Select a project cost budget type to be integrated.
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3. Balance Type - Select Encumbrance.
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4. Non-Project Budget - Select General Ledger Funding Budget.
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5. Levels - Select a default control level for each budget level. For top-down budget
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integration, the system imposes absolute control at the project level for all encumbered
accounts.
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6. Time Phase - Select an Amount Type and Boundary Code to be used when the system
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calculates available funds.
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2. Allow Override at Project Level - Check this check box to allow users to modify the
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4. Balance Type - For bottom-up integration, the Balance Type must be Budget.
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5. Non-Project Budget - Select a General Ledger budget from the list of values.
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For Bottom-Up Budgeting, all other budgetary control fields must be blank.
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Quiz
Answer: a
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Chapter 3 - Page 74
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Summary
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Chapter 3 - Page 75
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Chapter 3 - Page 76
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Entering Expenditures
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Chapter 4 - Page 1
Chapter 4
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Unauthorized reproduction or distribution prohibited. Copyright© 2022, Oracle University and/or its affiliates.
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Entering Expenditures
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Chapter 4 - Page 2
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Entering Expenditures
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Entering Expenditures
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Chapter 4 - Page 3
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Objectives
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Chapter 4 - Page 4
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Agenda
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Entering Expenditures
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Chapter 4 - Page 5
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You can use pre-approved batches to enter project-related expenditures directly into Oracle
Project Costing.
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Entering Expenditures
Chapter 4 - Page 6
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Expenditures Overview
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Expenditures Overview
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actual work performed or cost incurred. Oracle Project Costing uses these terms for
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expenditures:
• Expenditure batch
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- You can enter the following classes of pre-approved expenditure batches in Oracle
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• Expenditure
- A group of expenditure items incurred by an employee or organization for an
expenditure period.
• Expenditure item
- The individual transactions charged to a specific project and task combination.
Entering Expenditures
Chapter 4 - Page 7
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The multiple organization access control (MOAC) feature allows you to enter and process pre-
approved batches in two or more operating units without switching responsibilities.
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Entering Expenditures
Chapter 4 - Page 8
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Expenditures Overview
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Expenditures Overview
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You enter:
• Expenditure Item Date - The date on which work is performed or a cost is incurred and
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• Project Number - A unit of work that requires resources to produce measurable results. A
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project can be broken down into one or more tasks. You can charge costs to a project.
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• Task Number - A subdivision of project work. You can charge costs to lowest-level
tasks.
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• Assignment Name - When Oracle Project Resource Management is installed, you can
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• Work Type - A classification of work. You use work types to classify both actual and
scheduled work. You can also use work types to classify work to determine the billability
of expenditure items, classify cross charge amounts into cost, and revenue for cross-
charged work, and assign attributes for utilization reporting. Work types roll up to
resource and organization utilization categories. This field is required when the PA:
Require Work Type Entry for Expenditures profile option has a value of Yes.
Entering Expenditures
Chapter 4 - Page 9
• Expenditure Type - A classification of cost that you assign to each expenditure item. You
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can choose any expenditure type within the expenditure type class that you select for the
expenditure batch.
• Non-Labor Resource and Non-Labor Organization - If the expenditure type class for
the batch is Usages, enter the non-labor resource and its owning organization. This enables
you to track use of company-owned assets.
• Currency Fields - You can optionally display and enter the currency fields. You can use
to
folder tools to display to display currency fields. When your cursor is positioned in the
Expenditure Items regions of the Expenditures window, select Show Field from the Folder
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menu and then select the field that you want to display.
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• Quantity - The quantity of units. The expenditure type determines the unit of measure.
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For example, on a timecard, you enter the quantity for professional labor in hours.
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• Comment - Optionally, enter a free text Comment.
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Entering Expenditures
Chapter 4 - Page 10
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• Project Currency - The common currency into which all transactions for a particular
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Note: You must use folder tools to display additional currency fields.
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Entering Expenditures
Chapter 4 - Page 11
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2. Enter an expenditure.
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Entering Expenditures
Chapter 4 - Page 12
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• Submitted - The batch is awaiting review. You can return the batch to Working status
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• Released - The expenditure batch is released for cost distribution. You can reverse
incorrectly entered expenditure items within the batch.
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Entering Expenditures
Chapter 4 - Page 13
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4. Enter the expenditure ending date for the batch. If you enter a date that is not the last day
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of an expenditure week, the system automatically updates the date to the next valid week
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ending date.
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automatically reverse the batch. The expenditure type class must be Miscellaneous
Transaction to create an automatically reversing expenditure batch. For more information
regarding this feature, see the section in this lesson titled “Automatically Reversing
Expenditure Batches.”
Entering Expenditures
Chapter 4 - Page 14
8. Optionally, enter a control total and control count in the Amounts region. Use the
Unauthorized reproduction or distribution prohibited. Copyright© 2022, Oracle University and/or its affiliates.
Running Totals and Counts and the Difference columns to verify actual versus entered
totals.
9. Select the Expenditures button to enter the batch. The status of a new batch is always
Working.
10. In the Expenditures window, enter the employee or organization that incurred the cost.
11. Optionally enter the total units of measure in the Control Total field. When you have
to
entered all the expenditure items, you can compare the Control Total with the Running
e
Total, to verify your entries.
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12. Enter the expenditure items in the Expenditure Items region.
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13. When you have completed the expenditure batch, submit the batch for review.
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Entering Expenditures
Chapter 4 - Page 15
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the running total or running count does not equal your control totals, then you cannot submit
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the expenditure batch until your totals match. If you do not enter control totals, then Oracle
Project Costing does not validate control totals.
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remove the release capability from the entry person’s Oracle Project Costing responsibility.
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You can edit expenditure batches before release. The status must be Working to make changes.
Release makes expenditures ready for cost distribution. Release is synonymous with Approval.
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Releasing a batch automatically releases all the expenditures and expenditure items in the
batch.
Entering Expenditures
Chapter 4 - Page 16
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The Reverse button is enabled only if the current batch is released. You can reverse imported
expenditure batches only if the transaction source of the batch allows reversals. When you
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reverse an expenditure batch, Oracle Project Costing reverses all the expenditure items except
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for:
• Related items
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Entering Expenditures
Chapter 4 - Page 17
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After you submit a batch, you can rework the batch to add, delete, and revise expenditures and
expenditure items. You also must correct a batch if your supervisor rejects and returns a
35
submitted batch to you. If the batch has a status of Submitted, locate the batch, click the
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Rework button to return its status to Working, and change the expenditure or expenditure item
before resubmitting the batch.
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If the batch has a status of Released, you can correct individual expenditure items by reversing
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the full amount of the original item and then entering the correct information. For example, if
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you entered six hours on a timecard expenditure item when the correct number of hours is four,
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then you can create a reversing item equal to a negative six hours and add a new expenditure
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Entering Expenditures
Chapter 4 - Page 18
- Optionally check the All Negative Transactions Entered As Unmatched check box if
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you want to enter transactions with negative amounts and do not want Oracle Project
Costing to search for corresponding existing transactions.
2. In the Expenditure Items window, select the Reverse Original button.
- Instead of choosing the Reverse Original button, you can enter a negative amount in
the Quantity field. Precede negative amounts with a minus (–) sign. If the All
Negative Transactions Entered as Unmatched check box is not enabled, then Oracle
to
Project Costing searches for a matching expenditure item and alerts you if it is unable
to find a match.
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3. In the Reverse Expenditure Items window, specify the items that you want to reverse.
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4. Select the Reversal button.
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- Oracle Project Costing inserts a reversing (negative) expenditure item into the batch.
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5. Finish entering the batch and submit the batch as usual.
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- Expenditure batches can contain both positive and negative expenditure items.
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Entering Expenditures
Chapter 4 - Page 19
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If you frequently enter similar groups of expenditures, you can copy data from one week to the
next. The Copy function copies all expenditures and, optionally, all expenditure items from a
35
specified source batch. You need to revise only the items that are different in the new batch.
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Copying your expenditure batches can reduce your manual data entry requirements when you
enter similar groups of expenditures.
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Note: You cannot copy expenditure items from a reversed expenditure batch.
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Entering Expenditures
Chapter 4 - Page 20
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your system uses project security, then you can select only projects that you are allowed to
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see. The expenditure items that you view can cross operating units, but you must have
security access to an operating unit to view those expenditure items. For example, a
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project has expenditure items associated with operating units A, B, C, and D. If your
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responsibility only gives you access to operating units B and C, then you can view and
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• All - You can view expenditure items across projects and structure your query to retrieve
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information across projects within a single operating unit. If you have access to more than
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one operating unit, then you must select the operating unit that you want to query. If you
have access to only one operating unit, then that operating is the default value. No project
security is enforced. Oracle Project Costing shows only the expenditure items that
correspond to the current operating unit. If a project has expenditure items that are
charged across operating units, then you cannot view these expenditure items. In this case,
use the Find Project Expenditure Items window to query these expenditure items.
Entering Expenditures
Chapter 4 - Page 21
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2. Enter your search criteria. You can enter search criteria for a large number of attributes
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and on multiple tabs at the same time to limit the results of the query.
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• Note: For a detailed discussion of the available search criteria, see the Oracle
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3. Choose Find to execute the search, or choose Mass Adjust to process mass adjustment of
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expenditures. For information about mass adjustments, see the lesson titled "Performing
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Cost Adjustments."
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Entering Expenditures
Chapter 4 - Page 22
• Note: This window does not display events. If your project uses event-based or cost-
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to-cost revenue accrual or invoice generation, use the Events window to view the
total project revenue and bill amounts.
• Select the Item Details button to review the details of this expenditure item. You can
then choose one of the following options:
- Cost Distribution Lines - View individual transactions and the default debit and
credit GL accounts for each expenditure item that Oracle Project Costing derived
to
using AutoAccounting. You can also view other information about the cost
distribution lines, such as PA and GL period, accounting event generation status,
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and the rejection reason if the generation of the accounting event was not
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successful. The Cost Distribution Lines window does not display the credit
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account for supplier invoice expenditure items interfaced from Oracle Payables.
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- Revenue Distribution Lines - View the revenue transactions generated for a
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specific expenditure item. The window displays the default revenue account that
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Oracle Project Billing derived using AutoAccounting. You can also see the GL
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and PA posting period for the revenue, accounting event generation status, and
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the rejection reason if the generation of the accounting event was not successful.
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- AP Invoice - Drill down to the Invoice Overview window in Oracle Payables. If
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the invoice is matched to a purchase order, then you can drill down to the
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purchase order from the Invoice Workbench. This option is enabled for
expenditure items whose expenditure type class is either Supplier Invoices or
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Expense Reports.
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Oracle Purchasing. You can also drill down to the related purchase order from
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- Purchase Order Details - Drill down to the purchase order details for
contingent worker labor costs. This option is enabled for expenditure items for
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contingent worker labor costs that are associated with a purchase order.
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• Important: If you define your own detailed accounting rules in Oracle Subledger
Accounting, then Oracle Subledger Accounting overwrites default accounts, or
35
final accounts that Oracle Subledger Accounting transfers to Oracle General Ledger.
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To view the final subledger accounting, use the View Accounting option from the
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Tools menu.
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Entering Expenditures
Chapter 4 - Page 23
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You can use the View Accounting option from the Tools menu to review accounting entries for
expenditure items. You must create accounting in final mode for the accounting events
35
associated with the expenditure item to view accounting entries. If an expenditure item has
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multiple cost distribution lines, then you can view accounting for each cost distribution line
that is accounted in Oracle Subledger Accounting. Similarly, if you adjust an expenditure item
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and do not create accounting for the adjustments in Oracle Subledger Accounting, then the
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View Accounting window only shows the accounted cost distribution lines. If you create
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accounting in draft mode, then you can either review the output from the create accounting
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Note: The View Expenditure Accounting window displays final accounting entries from
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Oracle Subledger Accounting. It does not display default accounts that Oracle Project Costing
derives using AutoAccounting.
Note: For both historical (prior to Release 12) expenditure items not migrated to Oracle
Subledger Accounting, and transactions accounted in an external system and interfaced into
Oracle Project Costing, the View Accounting option displays accounts from the cost
distributions table in Oracle Project Costing.
Entering Expenditures
Chapter 4 - Page 24
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Quiz
Answer: a
Pr
iya
Entering Expenditures
nk
a
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pr
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35
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Chapter 4 - Page 25
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Quiz
Answer: b
Pr
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Entering Expenditures
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a
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pr
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35
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Chapter 4 - Page 26
ide no
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Agenda
Pr
iya
Entering Expenditures
nk
a
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pr
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35
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Chapter 4 - Page 27
ide no
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is a
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ibm
in.
You can create automatically reversing expenditure batches to record cost accruals in Oracle
Project Costing. Frequently, you receive items and services in one accounting period, which
35
are then invoiced in another period. You can use automatically reversing expenditure batches
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expenditure type class. When you release the batch, Oracle Project Costing creates reversing
.(
As you add expenditure items and save the batch, Oracle Project Costing determines the GL
date for each transaction and stores it as an expenditure item attribute called Accrual Date.
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• If Expenditure Item Date Accounting is used, then the accrual date is the expenditure item
date.
• If Period-End Date Accounting is used, then the accrual date is the period ending date of
the General Ledger period that includes the expenditure item date.
Entering Expenditures
Chapter 4 - Page 28
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When you release an expenditure batch with the Reverse Expenditures In a Future Period
checkbox enabled, Oracle Project Costing automatically reverses each expenditure item
35
included in the batch. Oracle Project Costing determines the GL date for the reversing
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expenditure items when it creates the reversing entries and it stores the date in the Accrual
Date attribute.
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• If Expenditure Item Date Accounting is used, then the accrual date of the reversing item is
a
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the first day of the GL period that follows the GL period that includes the accrual date of
the original expenditure item.
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• If Period-End Date Accounting is used, then the accrual date of the reversing item is the
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last day of the GL period that follows the GL period that includes the accrual date of the
original expenditure item.
• If the accrual dates for the reversing items fall in a period with a closed status in Oracle
General Ledger, then the release process fails and an error message appears.
Entering Expenditures
Chapter 4 - Page 29
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Oracle Project Costing assigns the original expenditure items to the current GL period and the
reversing expenditure items to the next GL period.
35
iya
pr
.(
a
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iya
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Entering Expenditures
Chapter 4 - Page 30
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Agenda
Pr
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Entering Expenditures
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a
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Chapter 4 - Page 31
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You can enter and upload pre-approved expenditure batches using Microsoft Excel
spreadsheets. You can connect to the database to validate records during entry, or you can
35
create the spreadsheet offline and allow validation to occur during the transaction upload.
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Note: If you choose to create the spreadsheet offline, then only mandatory fields associated
with a list of values are validated during transaction upload. The transaction upload calls the
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You must first download an entry template from Oracle Project Costing. All fields marked with
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an asterisk are mandatory. If List-Text appears under the column name, then a list of values is
available. To access the list of values, double-click in the column or select List of Values from
Pr
Entering Expenditures
Chapter 4 - Page 32
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Once the batch is ready, you can upload the data to the Oracle Project Costing transaction
import interface table. From here, the concurrent program PRC: Transaction Import brings the
35
Upload Batch
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Select Upload from the Oracle menu located at the top of the spreadsheet template. Optionally,
.(
select the Parameters button to select upload options. After viewing the Parameters window,
you must select Close or Proceed to Upload to return to the Upload window. Select Upload to
a
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launch the upload process. The upload process updates the message column for each record in
the spreadsheet to indicate whether the upload was successful.
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Transaction Import
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The upload process populates the transaction import table. Run the PRC: Transaction Import
program to import the transactions into the Expenditure Items table. You can optionally use the
upload parameter to run the transaction import program automatically.
Entering Expenditures
Chapter 4 - Page 33
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You can enter contingent worker timecard batches in Microsoft Excel and upload the batches
to Oracle Project Costing:
35
• A amount check is performed against the purchase order during transaction import.
pr
• Oracle Project Costing uses the cost rates stored on the purchase order to calculate
.(
• The supplier must submit an invoice. You match the invoice to the purchase order to
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• You interface additional cost, such as non-recoverable tax or invoice price variances, to
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Entering Expenditures
Chapter 4 - Page 34
Note: When contingent workers are allowed to enter timecards that are not related to a
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purchase order, you must ensure that the purchase order is not related to a project. Otherwise,
the cost for the contingent work will be recorded in Oracle Project Costing twice, once as labor
and once as supplier cost.
Entering Contingent Worker Timecards with Oracle Purchasing Integration
1. Enter a project-related purchase order for the contingent worker labor in Oracle
Purchasing. Associate the purchase order and purchase order line to the contingent worker
to
assignment in Oracle HRMS.
e
2. Consolidate contingent worker project-related timecards and enter a timecard batch in
s
Microsoft Excel. Assign a purchase order and purchase order line to each timecard line.
en
3. Upload the timecards and run the program PRC: Transaction Import to import the
lic
timecards into Oracle Project Costing. An amount check takes place against the purchase
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order during import.
b
ra
4. Process contingent worker timecards in Oracle Project Costing:
sfe
a. Run PRC: Distribute Labor Costs. The program retrieves cost rates from purchase
order.
n
ra
b. Run PRC: Generate Cost Accounting Events (for the process category Labor Cost).
. n-t
c. Run PRC: Create Accounting (for the process category Labor Cost).
5. Process in Oracle Payables: ide no
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a. Supplier submits an invoice.
b. Match supplier invoice to the purchase order to reduce outstanding balances.
is a
th h
d. Run PRC: Interface Supplier Costs in Oracle Project Costing to interface any
us .co
For information about entering contingent worker in Oracle Time & Labor, see the lesson titled
"Integration with Oracle Time & Labor."
in.
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pr
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iya
Pr
Entering Expenditures
Chapter 4 - Page 35
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Quiz
Answer: a
Pr
iya
Entering Expenditures
nk
a
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Chapter 4 - Page 36
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Agenda
Pr
iya
Entering Expenditures
nk
a
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35
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Chapter 4 - Page 37
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This slide describes the concurrent programs used to generate expenditure batch reports.
• AUD: Expenditure Batch Status - With this report you can identify expenditure batches
35
that are ready for release. Use this report to ensure that none of your expenditure batches
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go unprocessed.
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Expenditures Entry Audit report to review pre-approved expenditures. After you enter all
expenditures for an expenditure batch, submit this report and use it to verify that the
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entered data is correct before you submit your expenditure batch. This report provides a
summary for each expenditure batch that displays the total amounts for each expenditure
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Entering Expenditures
Chapter 4 - Page 38
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Quiz
Pr
Answer: b, c
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Entering Expenditures
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a
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Chapter 4 - Page 39
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Agenda
Pr
iya
Entering Expenditures
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a
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Chapter 4 - Page 40
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in.
Oracle Project Costing provides a single open interface, called Transaction Import, to enable
you to load transactions from external cost collection systems into Oracle Project Costing.
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Transaction Import creates pre-approved expenditure items from transaction data entered in
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external cost collection systems. Examples of external cost collection systems are:
• Timecard entry systems
pr
.(
• Payroll systems
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You can use the Review Transactions window to view and correct transactions that were
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Entering Expenditures
Chapter 4 - Page 41
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When you submit Transaction Import, you must identify the source of the transactions that you
want to import.
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To import 3rd party transactions, use your import utility to enter this transaction source in the
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For additional information about transaction sources, see the lesson titled "Implementing
a
nk
Expenditures."
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Entering Expenditures
Chapter 4 - Page 42
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When you import transaction information from external cost collection systems, Oracle Project
Costing records the transaction details and the source of the imported transactions during
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transaction import. The PRC: Transaction Import program (also referred to as Transaction
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Import) validates the transaction information, reports any exceptions, and creates transactions
for all of the valid transactions.
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To import transactions, you first must load transactions for external systems into the PA
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Transaction Interface Table. Your implementation team must determine the method for
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After you populate the interface table, you use the Submit Request window to run PRC:
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Transaction Import to import transactions into Oracle Project Costing. The program selects all
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pending transactions that satisfy the selection criteria of the request and validates each
transaction. If a transaction is valid, the program creates expenditure records in Oracle Project
Costing.
For additional information, see the online course titled "R12 Oracle Projects Advanced -
Transaction Import."
Entering Expenditures
Chapter 4 - Page 43
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If any one expenditure item in an expenditure fails validation, then Oracle Project Costing
rejects the entire expenditure and updates each expenditure item in the expenditure with a
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status of R (Rejected). However, only the expenditure item that was rejected appears on the
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exception report. Other expenditure items attached to the rejected expenditure do not appear on
the report. The remainder of the expenditures in the batch interface to Oracle Project Costing.
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Note: The transaction import validation logic is different when you run the program PRC:
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Interface Supplier Costs to import transactions from Oracle Purchasing and Oracle Payables.
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The program uses predefined supplier cost transaction sources to import expenditure items and
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it rejects only the expenditure items that fail validation. The program imports the valid
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Entering Expenditures
Chapter 4 - Page 44
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Quiz
Answer: d
Pr
iya
Entering Expenditures
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a
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pr
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Chapter 4 - Page 45
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To make changes to the source information because of invalid data, you can delete the rejected
rows from the interface table, correct the rejected transactions in the feeder system, and reload
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them from the feeder system. You can also correct the transaction in the interface table using
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the Review Transactions window. Oracle Project Costing automatically updates the status of
corrected items and all other transactions in the same expenditure to P (Pending). The original
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and updated values for corrected transactions are stored in the audit table.
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You can also use the Review Transactions window to create one or more new transactions
a
without loading them from the feeder system. This window was designed to expedite minor
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The Review Transactions window is a folder-type window. Many of the currency fields are not
displayed in the default folder. You can create folders that display these fields.
Review Transactions Window: Expenditure Item Dates for Supplier Costs
The program PRC: Interface Supplier Costs validates expenditure item dates for supplier costs
that you interface from Oracle Purchasing and Oracle Payables. If the expenditure item date for
an expenditure item fails validation, then the program rejects the transaction and leaves it in the
Entering Expenditures
Chapter 4 - Page 46
interface table. You must either change the date setup in Oracle Project Costing or change the
Unauthorized reproduction or distribution prohibited. Copyright© 2022, Oracle University and/or its affiliates.
date for the expenditure item. You can use the Review Transactions window to change the date
for a rejected expenditure item. Oracle Project Costing picks up the revised date for the
rejected transaction the next time that you run the program PRC: Interface Supplier Costs. To
update the expenditure item date in the Review Transactions window, the Allow Interface
Modifications option must be enabled for the transaction source.
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Entering Expenditures
Chapter 4 - Page 47
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Pr
Summary
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Entering Expenditures
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pr
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Chapter 4 - Page 48
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Pr
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Implementing Expenditures
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Chapter 5 - Page 1
Chapter 5
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Implementing Expenditures
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Chapter 5 - Page 2
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Implementing Expenditures
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Chapter 5 - Page 3
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Objectives
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a
Implementing Expenditures
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Chapter 5 - Page 4
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Implementing Expenditures
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Expenditures Implementation Steps
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Chapter 5 - Page 5
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Agenda
Pr
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Implementing Expenditures
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Chapter 5 - Page 6
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Expenditure Categories
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Expenditure Categories
7@
Oracle Project Costing uses expenditure categories to group expenditure types for costing. An
expenditure category describes the source of your organization’s costs. For example, an
35
expenditure category with a name such as Labor refers to the cost of labor. You use
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expenditure categories when you define organization overrides, for budgeting, and for
transaction controls. In addition, you can use expenditure categories in your AutoAccounting
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Use the Expenditure Categories window to define an expenditure category. For each
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expenditure category, enter a unique name for the expenditure category and a description.
nk
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Implementing Expenditures
Chapter 5 - Page 7
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A revenue category describes a source of your organization’s revenue. For example, a revenue
category with a name such as Labor refers to labor revenue.
35
Use the Revenue Category Lookups window to define new revenue categories. Revenue
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categories are used for grouping expenditure types and event types for revenue and billing.
You can use revenue categories for budgeting, for reporting purposes, and in your
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AutoAccounting rules.
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For additional discussion regarding event types, see the course “R12.x Project Billing
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Fundamentals.”
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Implementing Expenditures
Chapter 5 - Page 8
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Define Units
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Define Units
7@
A unit of measure records quantities or amounts of an expenditure item. You assign a unit to
each expenditure type. For example, to calculate the cost of computer services using the
35
amount of time a user uses a computer, you can define an expenditure type for computer
iya
Implementing Expenditures
Chapter 5 - Page 9
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An expenditure type class tells Oracle Project Costing how to process an expenditure item.
Oracle Project Costing predefines all expenditure type classes.
35
Oracle Project Costing uses the following expenditure type classes to process labor costs:
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• Straight Time - Labor cost calculated using a base cost rate multiplied by hours
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• Overtime - Labor cost calculated using a premium cost rate multiplied by hours.
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Oracle Project Costing uses the following expenditure type classes to process non-labor project
a
costs:
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• Expense Reports – Expense reports from Oracle Payables or Oracle Internet Expenses.
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You cannot enter expense reports directly into Oracle Project Costing. Expense reports
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that you import into Oracle Project Costing must be fully accounted prior to import.
• Usages - You must specify the non-labor resource for every usage item you charge to a
project. For each expenditure type classified by a Usage expenditure type class, you also
define non-labor resources and organizations that own each non-labor resource.
• Supplier Invoices - Supplier invoices, discounts, and payments from Oracle Payables or
an external system, and receipt accruals from Oracle Purchasing.
Implementing Expenditures
Chapter 5 - Page 10
• Miscellaneous Transaction - Miscellaneous Transactions are used to track miscellaneous
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to
transactions. These costs are created as a separate expenditure item that has a burdened
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cost amount, but has a quantity and raw cost value of zero. You can adjust burden
s
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transactions that are not system-generated.
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• Work In Process – You use this expenditure type class for Oracle Project Manufacturing
WIP transactions that you interface from Manufacturing to Oracle Project Costing. You
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can also use this expenditure type class when you import other manufacturing costs via
b
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Transaction Import or when you enter transactions via pre-approved batch entry.
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• Inventory - This expenditure type class is used for the following transactions:
n
- Oracle Project Manufacturing transactions that you import from Manufacturing or
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Oracle Inventory.
. n-t
- Oracle Inventory Issues and Receipts that you import from Oracle Inventory in a
ide no
manufacturing or non-manufacturing installation.
- You can also use this expenditure type class when you import other manufacturing
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costs via Transaction Import or when you enter transactions via pre-approved batch
is a
entry.
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pr
.(
a
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iya
Pr
Implementing Expenditures
Chapter 5 - Page 11
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An expenditure type is a classification of cost that you assign to each expenditure item you
enter in Oracle Project Costing. Defining expenditure types is a key aspect of your
35
expenditure type:
• Name - A unique name for the expenditure type.
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• Expenditure Category - The expenditure category you want to associate with this
expenditure type.
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• Revenue Category - The revenue category you want to associate with this expenditure
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type.
• Unit of Measure (UOM) - The unit of measure to use when Oracle Project Costing
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calculates the cost for this expenditure type. You must enter Hours for labor expenditure
types.
• Tax Classification Code - Optionally, click Tax Classification Code and select the tax
classification code for customer invoice lines for this expenditure type and operating unit.
Oracle Project Costing uses this code as the default tax classification code based on the
Application Tax Options hierarchy that you define in Oracle E-Business Tax for the
Implementing Expenditures
Chapter 5 - Page 12
combination of Oracle Project Costing and the specified operating unit. For more
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information on setting up taxes and the hierarchy of tax options for an application and
operating unit, see the Oracle E-Business Tax User Guide.
• Rate Required - If this expenditure type requires a cost rate, then enable the Rate
Required check box. Select the Cost Rate button to navigate to the Expenditure Cost Rates
window, select an operating unit, and then enter a cost rate and its effective dates. If this
expenditure type does not require a cost rate, then do not enable the Rate Required check
to
box. If you create a non-labor expenditure type without checking the Rate Required check
box, you cannot subsequently require and enter a cost rate for that expenditure type.
e s
Instead, you must disable the expenditure type and create a new one that requires a cost
en
rate and has a unique name. If you enable the Rate Required check box when you create a
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non-labor expenditure type, then you can change the cost rate at any time.
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For supplier invoice expenditure types, if you specify that a rate is required, Oracle Project
b
Costing requires you to enter a quantity in Oracle Payables for invoice distributions using
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that expenditure type. When you interface the invoice distribution to Oracle Project
sfe
Costing, Oracle Project Costing copies the quantity and amount to the expenditure item
and calculates the rate. If you define a supplier invoice expenditure type with the Rate
n
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Required option disabled, then the quantity of the expenditure item is set to the amount
. n-t
you enter in Oracle Payables.
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• Description and Dates - On the Description, Dates tab, enter a description and an
effective from date for the expenditure type. You can optionally enter an effective to date
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• Expenditure Type Classes - In the Expenditure Type Class region, select the expenditure
th h
Attention: After you create and save an expenditure type, you cannot subsequently update the
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• Name
• Expenditure Category
in.
• Revenue Category
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• Unit of Measure
35
Instead, you must enter an end date for the expenditure type and create a new one that has a
unique name. When you enter an end date for an expenditure type, the end date has no affect
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on existing transactions. Oracle Project Costing uses the old expenditure type to report on and
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process existing transactions. You cannot use the old expenditure type for new transactions that
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Implementing Expenditures
Chapter 5 - Page 13
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You can assign multiple expenditure type classes to an expenditure type. This feature allows
you to use a single expenditure type to classify as many different costs as you require. You can
35
use the same expenditure type for expenditures that have different origins (and therefore
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different accounting), but which should otherwise be grouped together for costing, budgeting,
or summarization purposes.
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For example, an expenditure item with the expenditure type Materials can have the
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expenditure type class Supplier Invoice if it originated in Oracle Payables, and the expenditure
a
type class Inventory if it originated in Oracle Inventory. This ability enables you to easily
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group these costs together for reporting and budgeting purposes, because the cost rolls up into
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the same expenditure type, regardless of the source of the individual transaction.
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Implementing Expenditures
Chapter 5 - Page 14
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Quiz
Answer: b
Pr
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a
Implementing Expenditures
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Chapter 5 - Page 15
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Quiz
Answer: c
Pr
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a
Implementing Expenditures
.(
pr
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35
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Chapter 5 - Page 16
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Agenda
Pr
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a
Implementing Expenditures
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Chapter 5 - Page 17
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The transaction control extension enables you to define your own rules to implement company-
specific expenditure entry policies. You can validate any transaction entered into Oracle
35
Project Costing, including transactions from other Oracle Applications and from external
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systems. The transaction control extension is called during expenditure entry. In addition, the
program PRC: Transaction Import calls the transaction control extension to validate
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• You cannot charge new transactions to projects for which the work is complete. You can
only transfer items to these projects.
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The transaction control extension validates expenditure items one at a time. All validation is
done for each expenditure item. Oracle Project Costing checks each expenditure item during
data entry and the transaction is validated before it commits the transaction to the database.
Oracle Project Costing processes the transaction control extension after the standard validation
performed for expenditure entry, and after validating any transaction controls entered at the
project or task level.
Implementing Expenditures
Chapter 5 - Page 18
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Quiz
Answer: a
Pr
iya
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a
Implementing Expenditures
.(
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Chapter 5 - Page 19
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AutoApproval Extension
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AutoApproval Extension
7@
Use the AutoApproval Extension to define conditions under which expense reports in Oracle
Internet Expenses or timecards in Oracle Time & Labor are approved automatically. You can
35
configure this extension to meet your needs. For additional information, see the Oracle
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Implementing Expenditures
Chapter 5 - Page 20
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Agenda
Pr
iya
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a
Implementing Expenditures
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Chapter 5 - Page 21
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Transaction sources identify the source of transactions imported into Oracle Project Costing
using Transaction Import. The transaction source determines how Transaction Import
35
import into Oracle Project Costing. The Transaction Import program selects all eligible
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selection criteria of the program request and determines the validity of each transaction.
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Oracle Project Costing predefines some transaction sources, and you can create others to fit
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your business needs. When you create a transaction source, you select the transaction source
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options to control the Transaction Import processing. For details about each of the transaction
source options, see the Oracle Projects Implementation Guide and the online course titled
"R12 Oracle Projects Advanced - Transaction Import."
Implementing Expenditures
Chapter 5 - Page 22
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Oracle Projects predefines a set of transaction sources to import cost from Oracle sources. Do
not use these transaction sources to import transactions from non-Oracle sources. For a
35
complete list of predefined transaction sources, see the Oracle Projects implementation Guide.
iya
pr
.(
a
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iya
Pr
Implementing Expenditures
Chapter 5 - Page 23
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7@
Project Manufacturing and Oracle Inventory. Do not use these transaction sources to import
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transactions from non-Oracle sources. For a complete list of predefined transaction sources, see
the Oracle Projects implementation Guide.
pr
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For the transaction sources for Inventory, WIP, and WIP Straight Time transactions, the GL
Posting Option in the Project Manufacturing Parameters window determines whether Oracle
a
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Project Manufacturing or Oracle Project Costing generates accounting events and creates
accounting for the transactions in Oracle Subledger Accounting as follows:
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Implementing Expenditures
Chapter 5 - Page 24
- If the option is set to Use AutoAccounting, then Oracle Project Costing uses the
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35
iya
pr
.(
a
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iya
Pr
Implementing Expenditures
Chapter 5 - Page 25
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Quiz
Answer: a
Pr
iya
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a
Implementing Expenditures
.(
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35
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Chapter 5 - Page 26
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Agenda
Pr
iya
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a
Implementing Expenditures
.(
pr
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35
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Chapter 5 - Page 27
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Listings
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Listings
7@
review expenditure types. You can print a listing for one or all expenditure categories and
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for a specified effective date. If an effective date is specified for the report, then the report
lists only expenditure types that are active as of the date you enter.
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• IMP: Revenue Categories - Use the IMP: Revenue Categories Listing to review revenue
categories. For each revenue category listed, this report prints all the associated
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expenditure types and their corresponding expenditure categories. To limit the report to
only one revenue category, enter the revenue category. Otherwise, leave this field blank.
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• IMP: Units Definition - Use the IMP: Units Definition Listing to review all units of
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measure.
Implementing Expenditures
Chapter 5 - Page 28
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Summary
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Implementing Expenditures
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Chapter 5 - Page 29
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Pr
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Implementing Expenditures
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Chapter 5 - Page 30
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Pr
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a
Chapter 6 - Page 1
Chapter 6
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Chapter 6 - Page 2
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Chapter 6 - Page 3
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Objectives
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Chapter 6 - Page 4
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Agenda
Pr
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Chapter 6 - Page 5
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Overview of Costing
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Overview of Costing
7@
import transactions. You can use Transaction Import to import unaccounted and
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accounted transactions. If you import unaccounted transaction, then you must run the
costing programs for the transactions. If you import accounted transactions, then no
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2. Distribute costs and derive default accounting. Cost distribution is the act of calculating
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the cost and determining the cost accounting for an expenditure item. Oracle Project
Costing has a set of cost distribution programs that you run, depending upon the type of
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expenditure. Some imported expenditures are already cost distributed when you import
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Overview of Costing
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Overview of Costing
7@
4. Create accounting in Oracle Subledger Accounting and transfer the accounting entries to
Oracle General Ledger. You run the concurrent program PRC: Create Accounting in
35
Oracle Project Costing to create accounting entries for accounting events. Depending on
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the parameter values you select, the program performs the following tasks:
- Creates subledger accounting entries for unprocessed accounting events. If you
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define your own detailed accounting rules in Oracle Subledger Accounting, then
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- Transfers accounting entries to the Oracle General Ledger interface tables. In Oracle
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Project Costing, you can optionally run a separate program named PRC: Transfer
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Overview of Costing
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Overview of Costing
7@
In Oracle General Ledger, the Journal Import program takes the summary interface
information stored in the Oracle General Ledger interface tables and automatically creates
35
journal entries for posting in Oracle General Ledger. Journal Import creates a journal entry
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batch for your journal entry records in your ledger and accounting period. For each journal
entry category in a batch, Journal Import creates a journal entry header. For each header in a
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journal entry batch, Journal Import creates one or more journal entry lines that correspond to
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the journal entry records you transfer from Oracle Subledger Accounting to Oracle General
a
Ledger.
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When you run the program PRC: Create Accounting and you select Yes for the parameter
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Transfer to General Ledger, the create accounting program transfers the final accounting from
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Oracle Subledger Accounting to Oracle General Ledger and runs the Journal Import program.
When you submit the program PRC: Create Accounting, and you choose to transfer to Oracle
General Ledger, or alternatively when you submit the program PRC: Transfer Journal Entries
to GL, you can optionally set the parameter Post in General Ledger to Yes to enable the
program to automatically post successfully imported journal entries in Oracle General Ledger.
Costing Concepts
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Costing Concepts
7@
Raw Cost - Cost directly attributable to work performed. Examples of raw cost are salaries
and travel expenses.
35
• Burden Cost - Cost of doing business that supports raw cost and cannot be directly
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attributed to work performed. Examples of burden cost are fringe benefits, office space,
and general and administrative costs.
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• Total Burdened Cost - The total cost. It consists of raw cost plus any burden cost.
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Budgetary controls are set to enforce limits, and encumbrance accounting creates reservations
for planned expenditures. The reservations ensure that funds will be available when project
35
costs are incurred, and provide a complete picture of funds available for future use. Oracle
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Project Costing creates project encumbrance entries when you enable top-down budget
integration for a project.
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Budgetary Controls
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Budgetary controls enable you to monitor and control expense commitment transactions
a
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entered for a project based on a project cost budget. Expense commitment transactions are
transactions for non-inventory items. Oracle Project Costing enforces budgetary controls for:
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Payables because you generally enter expense reports after costs are already incurred.
Therefore, you should ensure that your procedures for approving expense report expenditures
include verification of available funds according to your business requirements.
Budget Integration
Oracle Project Costing budget integration features enable you to integrate project budgets with
non-project budgets in Oracle General Ledger. Integration is defined in order to perform
to
bottom-up or top-down budgeting.
e s
en
For additional information, see the lesson titled "Appendix B: Budgetary Controls And Budget
Integration."
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a
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Quiz
Answer: b
Pr
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a
Chapter 6 - Page 12
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Agenda
Pr
iya
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a
Chapter 6 - Page 13
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After you enter or import expenditures, the next step is to distribute the costs.
35
iya
pr
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a
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• Convert all transaction currency amounts to functional currency and project cost currency
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amounts
a
• Determine default accounting using AutoAccounting (debit account for raw cost and
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burden cost, debit and credit accounts for total burdened cost)
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Note: If you are not performing burdening, then you can skip the programs that create and
distribute burden and burdened cost. See the lesson titled "Implementing Burden Costing."
Determining Costs
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Determining Costs
7@
• For employees and contingent workers, you can maintain labor cost rate schedules by
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employee (includes contingent workers) or by job. You also have the option of overriding
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labor cost rates for individual employees and contingent workers. In addition, you can
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define a unique labor costing algorithm using the Labor Costing Extension.
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• For contingent worker timecards with Oracle Purchasing integration, when you run the
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program PRC: Distribute Labor Costs, Oracle Project Costing uses rates from the related
purchase order to calculate the costs.
• Oracle Project Costing determines costs for labor transactions with the following
programs:
- PRC: Distribute Labor Costs
- PRC: Distribute Labor Costs for a Range of Projects
• Raw cost is equal to quantity (if quantity is in currency, for example, a currency amount),
or alternatively, raw cost is the result of multiplying quantity by a rate (if quantity is not in
currency). You can define cost rates for usage and miscellaneous costs as follows:
- Cost rates by expenditure type
- Cost rates by non-labor resource and owning organization for usages to override the
expenditure type cost rate
to
• Burden cost is the result of multiplying raw cost by a burden multiplier.
e
• Burdened cost is the sum of raw cost and burden cost.
s
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• Oracle Project Costing determines costs for usage and miscellaneous costs with the
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following program:
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- PRC: Distribute Usage and Miscellaneous Costs
b
Determining supplier cost:
ra
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• For supplier cost interfaced from Oracle Payables, raw cost for each expenditure item is
equal to the supplier invoice distribution line amount (accrual basis accounting) or the
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payment distribution amount (cash basis accounting) in Oracle Payables.
ra
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• For receipt accrual cost interfaced from Oracle Purchasing, raw cost is equal to the receipt
transaction amount in Oracle Purchasing.
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• Burden cost is the result of multiplying raw cost by a burden multiplier.
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• Oracle Project Costing determines costs for supplier invoice transactions with the
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following programs:
e m)
• Raw cost for each expenditure item is equal to the expense report invoice distribution line
7@
amount (accrual basis accounting) or the payment distribution amount (cash basis
35
• Note: When you split a receipt in Oracle Payables across multiple expenditure items,
a
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Oracle Project Costing does not divide the receipt amount among the expenditure items.
As a result, each expenditure item is associated with the full receipt amount.
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• Oracle Project Costing determines costs for expense reports with the following programs:
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Quiz
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Answer: a, c
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a
Chapter 6 - Page 18
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Oracle Project Costing calculates burden cost by multiplying raw cost by a burden multiplier.
This calculation is represented in the following formula:
35
Oracle Project Costing calculates total burdened cost by adding burden cost to the raw cost
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You use the burden multiplier to derive the total amount of the burden cost. For additional
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discussion regarding burdening, see the lesson titled “Implementing Burden Costing.”
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You create rules in AutoAccounting to specify the default accounts that the distribution
programs generate. Oracle Project Costing creates many different accounting transactions
35
throughout its business cycle. You use AutoAccounting to specify how to determine the correct
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account for each cost distribution line. See the lesson titled “Accounting for Costs.”
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a
nk
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Pr
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Oracle Project Costing provides the following cost distribution concurrent programs
• PRC: Create and Distribute Burden Transactions - Summarizes burden cost and
35
creates expenditure items for burden transactions. The program creates burden
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transactions for projects, depending on the method you use to store burden costs. See the
lesson titled “Implementing Burden Costing.”
pr
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• PRC: Distribute Borrowed and Lent Amounts - Distributes all transactions identified
for Borrowed and Lent accounting. The program determines the transfer price amount for
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each transaction and generates the default borrowed and lent accounting entries. You run
this program in the provider operating unit. See the lesson titled "Cross Charge."
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• PRC: Distribute Expense Report Adjustments - Computes the burden costs associated
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with adjusted expense report expenditure items and determines the account to which to
post the raw costs. The program also identifies if a transaction is cross-charged and, if so,
determines the processing it requires.
• PRC: Distribute Labor Costs for a Range of Projects & PRC: Distribute Labor Costs
- Computes the labor costs for timecard hours and determines the default GL account to
to
• PRC: Distribute Total Burdened Costs - Creates total burdened cost distribution lines
for all transactions on a burdened project. The program also identifies and processes any
e s
cross-charged transactions. The program creates default accounts for credit and debit
en
distribution lines for burdened cost. See the lesson titled see the lesson titled
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“Implementing Burden Costing.”
le
• PRC: Distribute Usage and Miscellaneous Costs - Computes the costs and determines
b
the default GL account to which to post cost for expenditure items with the following
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expenditure type classes: Usages, Burden Transactions, Miscellaneous Transactions, and
sfe
Inventory and WIP transactions not already costed or accounted. The program also
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identifies if a transaction is cross-charged and, if so, determines the processing it requires.
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7@
35
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pr
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a
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Pr
Agenda
Pr
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a
Chapter 6 - Page 23
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After you distribute costs, the next step is to create the accounting for the costs. Creating
accounting consists of four main steps:
35
to
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Oracle Project Costing fully integrates with Oracle Subledger Accounting so that you can
create accounting for your project-related transactions.
35
Oracle Project Costing generates accounting events and creates the subledger accounting
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entries for the accounting events. Oracle Project Costing predefines setup for Oracle Subledger
Accounting so Oracle Subledger Accounting accepts the default accounting information from
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Oracle Project Costing without change. Next, Oracle Subledger Accounting transfers the final
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accounting to Oracle General Ledger. If you define your own detailed accounting rules in
a
Oracle Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts,
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or individual segments of accounts, that Oracle Project Costing derives using AutoAccounting.
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Pr
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The program PRC: Generate Cost Accounting Events collects cost distribution lines in Oracle
Project Costing and uses AutoAccounting to determine the default liability account. The value
35
you select for the parameter Process Category determines the type of costs that the program
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processes. The program also creates accounting events for the costs in Oracle Subledger
Accounting. If the program is able to successfully generate an accounting event, then it updates
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the status of the cost distribution line to Accepted. If the program cannot successfully
.(
determine a liability account or is unable to generate an accounting event, then it updates the
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When you run program PRC: Generate Cost Accounting Events, Oracle Project Costing uses
AutoAccounting to determine the credit side of the accounting for each cost distribution line.
35
to
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The program PRC: Create Accounting creates draft or final accounting entries in Oracle
Subledger Accounting for unprocessed accounting events. If you define your own detailed
35
overwrites default accounts, or individual segments of accounts, that Oracle Project Costing
derives using AutoAccounting. You can run this program in either draft mode, if you want to
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review the results before you create the final accounting, or final mode. You can optionally
.(
choose to transfer final journal entries to Oracle General Ledger, initiate the Journal Import
a
If you do not choose to have the program transfer final journal entries to Oracle General
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Ledger, then you can run the program PRC: Transfer Journal Entries to GL to transfer final
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journal entries from Oracle Subledger Accounting to Oracle General Ledger. This program
transfers final subledger accounting journal entries from Oracle Subledger Accounting to
Oracle General Ledger and initiates the program Journal Import in Oracle General Ledger.
Optionally, you can choose to have the program post journal entries in Oracle General Ledger.
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Use Journal Import to import accounting entries into Oracle General Ledger. Journal Import is
an Oracle General Ledger program that creates journal entries from transaction data stored in
35
the Oracle General Ledger GL_INTERFACE table. The program creates and stores journal
iya
Quiz
Answer: c
Pr
iya
nk
a
Chapter 6 - Page 30
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. n-t
Agenda
Pr
iya
nk
a
Chapter 6 - Page 31
ide no
. n-t
Streamline Processes
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Streamline Processes
7@
Streamline processes submit and monitor a series of concurrent programs that must be run
sequentially to complete a function. For example, distributing labor costs, generating cost
35
accounting events, creating accounting in Oracle Subledger Accounting, and transferring the
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costs to Oracle General Ledger requires that you submit several programs. Instead of running
the individual programs one at a time, you can choose to submit the program PRC: Submit
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Interface Streamline Processes and select the streamline option DXL: Distribute and Interface
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Labor Costs to GL. The streamline process then submits and monitors the progress of each
a
separate program in sequence until all programs complete. Oracle Project Costing provides
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to
Note: For the program PRC: Create Accounting, the interface streamline processes
e s
automatically set the Mode parameter to Final, the Transfer to General Ledger parameter to
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Yes, and the Post in General Ledger parameter to Yes.
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35
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pr
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a
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Pr
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2. For Name, choose one of the three streamline processes. For details about each of the
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streamline options and the programs that each option initiates, see Oracle Projects
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Fundamentals.
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4. (Optional) Enter the Reschedule Interval, Reschedule Time of Day, and Stop
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Rescheduling Date.
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5. Choose the Submit button. Oracle Project Costing submits your streamline request. The
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Streamline Processing Report lists the name, the concurrent request ID, and the
completion status of each child programs monitored by the streamline process.
Agenda
Pr
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Chapter 6 - Page 35
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measure project performance. Project accounting periods are also referred to as PA periods.
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To report project information more frequently than your Oracle General Ledger accounting
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periods (GL periods) allow, you can define PA periods that are shorter than your GL periods.
For example, you can define weekly PA periods and monthly GL periods. You can also create
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PA periods that match existing GL periods. However, defining PA periods that overlap your
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GL periods can create the need for numerous adjustments and journal entries if you wish to
reconcile Oracle Project Costing with Oracle General Ledger. For additional information, see
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You can control the status of GL periods for transaction processing in Oracle Project Costing,
without closing the period in Oracle General Ledger. This feature enables you to open and
35
close GL periods for project transactions independent of the closing processes for the other
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subledgers. The status of a GL period for project transactions in Oracle Project Costing can
differ from the same GL period’s status in Oracle General Ledger.
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If your PA periods and GL periods are identical, you can enable the Maintain Common PA and
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GL Periods implementation option. When this option is enabled, the system automatically
maintains PA period statuses as you maintain the GL period statuses. To use this method, you
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To give you greater control over when your transactions are accounted, you can enable the
profile option PA: Enable Enhanced Period Processing to use expenditure item date
35
accounting.
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With period end date accounting, you maintain PA periods in Oracle Project Costing and GL
periods in Oracle General Ledger. Oracle Project Costing derives the PA date for a transaction
35
from the expenditure item date and sets the PA date to the PA period ending date. The period
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must be in either Open or Future status. Next, Oracle Project Costing derives GL dates from
PA dates and sets the accounting date to the end date of the corresponding GL accounting
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period.
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In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-
2010. This expenditure item date falls within the SEP-10 PA period and because the SEP-10
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PA period is open, Oracle Project Costing sets the PA date to 30-SEP-10, the last day of the
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period.
Next, Oracle Project Costing uses the PA date (30-SEP-10) to derive the GL date. The PA date
falls into the open SEP-10 GL period. The derived GL date is 30-SEP-2010, the end date of the
SEP-10 GL period.
Date Derivation
Project Accounting Date (PA Date)
Adjustments
- The PA date is set to the end date of the earliest PA period that includes or follows
the transaction expenditure item date and has a status of Open or Future.
• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
- The PA date is determined based on the relationship of the transaction expenditure
to
item date to the GL date entered in Oracle Purchasing or Oracle Payables.
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- If the expenditure item date is less than or equal to the GL date, then the PA date
s
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is set to the end date of the earliest PA period that includes or follows the GL
date and has a status of Open or Future.
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- If the expenditure item date is greater than the GL date, then the PA date is set to
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the end date of the earliest PA period that includes or follows the expenditure
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item date and has a status of Open or Future.
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Oracle General Ledger Accounting Date (GL Date)
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• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
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Adjustments
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- The GL date is set to the end date of the earliest GL period that includes or follows
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the PA date of the cost distribution line and has a status of Open or Future according
to the period status in Oracle General Ledger.
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• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
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- When you interface supplier costs from Oracle Purchasing and supplier costs and
expense reports from Oracle Payables, Oracle Project Costing copies the GL date for
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each distribution line from the GL date entered for the distribution in Oracle
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With expenditure item date accounting, you maintain both PA periods and GL period statuses
for project transactions in Oracle Project Costing. Oracle Project Costing derives PA dates and
35
GL dates independently, and does not set the accounting dates to the end date of the
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In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-
2010. The expenditure item date falls into the open SEP-10 PA period. The PA date is set to
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The GL period SEP-10 is also open for Oracle Project Costing. Oracle Project Costing sets the
GL date to expenditure item date of 08-SEP-2010.
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Date Derivation
Project Accounting Date (PA Date)
• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
Adjustments
period with a status of Open or Future. If the expenditure item date falls in a closed
PA period, then the PA date is set to the start date of the earliest open or future
enterable PA period that follows the expenditure item date.
• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
- The PA date is set to the transaction expenditure item date if that date falls in a PA
to
period with a status of Open or Future. If the expenditure item date falls in a closed
PA period, then the PA date is set to the start date of the earliest open or future
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enterable PA period that follows the expenditure item date.
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Oracle General Ledger Accounting Date (GL Date)
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• Timecard, Usage, Miscellaneous, Supplier Cost Adjustments, and Expense Report
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Adjustments
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- The GL date is set to the transaction expenditure item date if that date falls in a GL
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period with a status of Open or Future according to the period status in Oracle Project
Costing. If the expenditure item date falls in a closed GL period, then the GL date is
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set to the start date of the earliest open or future enterable GL period that follows the
expenditure item date.
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• Supplier Costs Interfaced from Oracle Purchasing and Supplier Costs and Expense
Reports Interfaced from Oracle Payables
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- When you interface supplier costs from Oracle Purchasing and supplier costs and
expense reports from Oracle Payables, Oracle Project Costing copies the GL date for
is a
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each cost distribution line from the GL date entered for the distribution line in Oracle
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7@
statuses for project transactions in Oracle Project Costing and the system automatically
maintains PA Periods. To use this method, you must define identical PA periods and GL
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periods. Oracle Project Costing derives a GL date for each transaction and copies the value to
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the PA date.
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In the example on the slide, you enter a transaction with an expenditure item date of 08-SEP-
2010. The expenditure item date falls into the SEP-10 GL period. While SEP-10 is still open in
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Oracle General Ledger, the GL period for project transactions status is Closed in Oracle Project
Costing. Because this GL period is closed for project transactions, Oracle Project Costing sets
the GL date to 01-OCT-2010, the start date of the OCT-10 GL period. OCT-10 is the earliest
open or future enterable GL period for project transactions that follows the expenditure item
date. It then copies the PA date from the GL date.
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7@
35
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During the period-end closing cycle, you can choose to close the period without accounting for
all accounting events. The program PRC: Sweep Transaction Accounting Events enables you to
35
move accounting events that are in a closed GL period, and have errors or are not fully
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accounted, to the next open GL period so that you can complete closing without accounting for
these transactions. This program changes the date on unaccounted transaction accounting
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events to the first day of the next open GL period without accounting for them.
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After the program sweeps the transaction accounting events, it also changes the GL date on the
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cost and revenue distribution lines associated with the accounting events to the first day of the
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When budgetary control is enabled for a project, this program also updates unaccounted
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Subledger Accounting.
• The transaction has unprocessed accounting events.
When you submit the program, you can choose to run it in either review mode or update mode.
Use review mode to view all transactions with exceptions and the reasons for the exceptions.
At this point, you can address the exceptions and run the program PRC: Create Accounting in
final mode to complete the accounting for the transaction. Alternatively, if you do not want to
to
correct the exceptions at this time, run the sweep transaction accounting events program in
update mode to change the dates on the unaccounted accounting events to the first day of the
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next open GL period.
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Upon completion, the sweep transaction accounting events program generates an output report
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that shows the results of the program.
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Note: If you sweep revenue transactions, and you use Project Status Inquiry, Project
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Performance Reporting, or Oracle Daily Business Intelligence for Projects, then you must run
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the appropriate refresh or update programs so that reporting tool accurately reports the GL
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period. For additional information, see Oracle Projects Fundamentals.
n
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Note: Before you sweep transaction accounting events, consider the impact on other related
processing such as burden cost accounting, asset capitalization, allocations, and non-CIP
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assets. For example, if the raw cost for a transaction is successfully accounted and the
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transaction accounting event for the burden cost is in error, then when you sweep transaction
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accounting events to the next period, you can end up with the raw cost posted to one period and
burden cost posted to the following period.
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7@
35
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Pr
Quiz
Answer: a
Pr
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a
Chapter 6 - Page 47
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Pr
Summary
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a
Chapter 6 - Page 48
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Pr
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Chapter 7 - Page 1
Chapter 7
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Unauthorized reproduction or distribution prohibited. Copyright© 2022, Oracle University and/or its affiliates.
Pr
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Chapter 7 - Page 2
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Pr
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35
7@
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Chapter 7 - Page 3
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Pr
Objectives
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Chapter 7 - Page 4
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Agenda
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Chapter 7 - Page 5
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Oracle Project Costing creates accounting transactions throughout its business cycle. You can
use AutoAccounting to specify how to determine the correct account for each transaction.
35
Oracle Project Costing generates accounting events and creates accounting for the accounting
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events in Oracle Subledger Accounting. Oracle Project Costing predefines setup in Oracle
Subledger Accounting so that the create accounting program accepts default accounts from
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AutoAccounting without change. If you define your own detailed accounting rules in Oracle
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individual segments of accounts, that Oracle Project Costing derives using AutoAccounting.
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The Account Generator uses Oracle Workflow to derive default account code combinations.
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Oracle Payables and Oracle Purchasing use the Account Generator to determine the default
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account code combinations for purchasing requisitions, purchase orders, supplier invoices, and
expense reports based on the project information entered. AutoAccounting, the Account
Generator, and Oracle Subledger Accounting each provide functionality to create accounting
for project-related supplier costs and expense reports. When you implement Oracle Purchasing
and Oracle Payables integration with Oracle Project Costing, carefully consider how to set up
the account derivation logic in each location.
AutoAccounting
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AutoAccounting
7@
When you implement AutoAccounting, you define the rules governing which general ledger
accounts Oracle Project Costing uses under which circumstances. Oracle Project Costing uses
35
The AutoAccounting feature requires that you allow dynamic insertion of new account
combinations. You must define your Accounting Flexfield structure with the Allow Dynamic
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Note: If you set up your own rules in Oracle Subledger Accounting, then you still set up
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AutoAccounting so that Oracle Project Costing can determine valid default accounts. The
AutoAccounting setup enables programs, such as programs that distribute costs and generate
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cost accounting events, to determine the default accounts that Oracle Project Costing sends to
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Oracle Subledger Accounting. For example, if use total burdened cost accounting and set up
your own rules in Oracle Subledger Accounting, then you also need to define AutoAccounting
for total burdened costs so Oracle Project Costing can minimally determine a default debit and
credit accounts.
AutoAccounting Rules
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AutoAccounting Rules
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AutoAccounting rules are formulas (or methods) that you use to derive each segment within
your account structure based on the type of transaction. Each rule can use one of three
35
• Constant value
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• Parameter
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- Execute an SQL select statement to retrieve a value; make the rule dependent on
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Each AutoAccounting rule you define supplies one Accounting Flexfield segment value at a
time. Thus, you need to specify one AutoAccounting rule for each segment in your Accounting
35
Flexfield, for each AutoAccounting transaction you want to use. Some of the AutoAccounting
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rules you define can be quite simple, such as always supplying a constant company code or
natural account. Others can draw upon context information (parameters), such as the
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expenditure type of an expenditure item or the organization that owns a particular non-labor
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resource. You can use multiple parameters to provide a segment value. You can reuse the same
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For each rule that you define, only one segment value within the entire account structure is
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supplied at a time. Thus, you specify one AutoAccounting rule for each segment in your
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Constant Value
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Constant Value
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Use a constant value when you always supply a particular intermediate value (usually an
Accounting Flexfield segment code). If you specify Constant as the rule intermediate value
35
source, then enter the value that you want Oracle Project Costing to supply as the intermediate
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value.
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Parameter Value
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Parameter Value
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When you define an AutoAccounting rule, you can use a predefined parameter as an input
value. Examples of parameters that you can use as context information include the project-
35
owning organization or the expenditure type of an expenditure item. Oracle Project Costing
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AutoAccounting rules. Not all of the parameters are available for all functions. The Customer
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ID and the Customer Name parameters are available for cross charge functions only.
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Submit the AutoAccounting Functions Listing for a complete listing of all of the parameters
available for each function.
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A SQL select statement value enables you to execute a SQL select statement to retrieve an
intermediate value. You can make the rule dependent on multiple values and conditional
35
statements. SQL statements are intended to process rules that depend on more than one
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parameter. You can define rules to read any value by using a SQL select statement. You should
consider the performance implications of using SQL statements. For example:
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setup against volume data to check their performance quality before implementation.
AutoAccounting rules with SQL statements are intended to process rules that are dependent on
more than one parameter. They are not intended to derive additional parameters using SQL that
accesses application tables. This type of use can affect processing performance and may not be
supported based on the AutoAccounting function.
Lookup Sets
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Lookup Sets
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corresponding account segment value. One or more related pairs of intermediate values and
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segment values form a lookup set. When you define lookup sets, lists of values are not
available.
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You need to define a lookup set before you can use it in a rule. However, if you prefer to
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define your rules before completing your lookup sets, you can define each lookup set’s name
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and description and then define the intermediate values and segment values later.
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If AutoAccounting does not find a matching intermediate value in the lookup set, then it
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provides an error message (Incomplete AutoAccounting Rules) to notify you that it could not
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build an Accounting Flexfield combination. You must correct your AutoAccounting setup and
resubmit the program that triggered the AutoAccounting error. If AutoAccounting does not
find a matching segment value in the lookup set, then it provides an error message (Invalid
Accounting Flexfield) to notify you that it could not build a valid Accounting Flexfield
combination. You must correct your AutoAccounting setup and resubmit the program that
triggered the AutoAccounting error.
You can use the descriptive flexfield attributes to store values used in AutoAccounting instead
of maintaining lookup sets for entities. These entities include:
• Agreement types
• Budget entry methods and budget types
• Class categories and class codes
• Compensation rule sets
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• Event types
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• Expenditure categories and expenditure types
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• Burden cost codes
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• Lookup sets
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• Non-labor resources and non-labor resource organizations sources
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• Project role types
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• Transaction sources
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7@
35
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After you specify an intermediate value, you specify one of the following segment value
sources to indicate whether the intermediate value is already a valid segment value or whether
35
• Intermediate Value
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- Supply the intermediate value as a segment value; do not use a lookup set.
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- Look up the intermediate value in a lookup set; translate the intermediate value into
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You do not always need to use a lookup set when you write an AutoAccounting rule. If you
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define a simple constant rule, then you do not need to use a lookup set to supply a segment
value because you generally supply a valid segment value as the constant.
Assign Rules
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Assign Rules
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Function
For each accounting transaction, you define rules to determine the appropriate account to
35
AutoAccounting functions are components of programs that you submit to generate accounting
entries.
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Function Transactions
When you are assigning rules to an AutoAccounting function, you can assign different rules to
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different conditions. For example, you can account for indirect projects using one set of rules,
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and use two different sets of rules for billable items and non-billable items on contract projects.
Oracle Project Costing provides function transactions for each function which identify
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commonly used conditions. You can assign rules to function transactions for each
AutoAccounting function. Complete the following steps to assign AutoAccounting rules to
AutoAccounting functions and function transactions:
• Enable each function transaction you want to use.
• For each function transaction you enable, specify an AutoAccounting rule for each
segment of your Accounting Flexfield.
rules to use under which circumstances. In cases where an AutoAccounting function consists
of several distinct function transactions, you assign rules to each function transaction that you
want to use. These rule assignments determine which account AutoAccounting uses to process
that function transaction. Oracle Project Costing attempts to use the most appropriate function
transaction. If you have not enabled that function transaction, then it tries to use the next most
appropriate transaction. Oracle Project Costing continues this process until it finds an enabled
function transaction.
to
Segment Rule Pairings
e s
After you enable a function transaction, you match each segment in your Accounting Flexfield
en
with the appropriate AutoAccounting rule. For example, if you have a two-segment
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Accounting Flexfield containing a Company segment and an Account segment, you assign one
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rule to the Company segment and one rule to the Account segment. You use the Assign
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AutoAccounting Rules window to enable AutoAccounting function transactions and assign
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rules to them.
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35
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Quiz
Answer: b
Pr
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Chapter 7 - Page 18
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Agenda
Pr
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Chapter 7 - Page 19
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Oracle Project Costing uses AutoAccounting to generate default accounting for cost
transactions. When you implement AutoAccounting, you define rules that determine accounts
35
that Oracle Project Costing assigns to transactions to meet your business requirements. You
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can optionally define your detailed accounting rules in Oracle Subledger Accounting. If you
define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
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Note: If you set up your own rules in Oracle Subledger Accounting, then you still set up
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AutoAccounting so that Oracle Project Costing can determine valid default accounts. The
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AutoAccounting setup enables programs, such as programs that distribute costs and generate
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cost accounting events, to determine the default accounts that Oracle Project Costing sends to
Oracle Subledger Accounting. For example, if use total burdened cost accounting and set up
your own rules in Oracle Subledger Accounting, then you also need to define AutoAccounting
for total burdened costs so Oracle Project Costing can minimally determine a default debit and
credit accounts.
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in.
Oracle Project Costing uses the Labor Cost Account and the Labor Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Straight
35
When you run PRC: Distribute Labor Costs or PRC: Distribute Labor Costs for a Range of
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Projects, Oracle Project Costing calculates labor cost amounts based upon employee labor cost
overrides and labor costing rules. After calculating labor costs, Oracle Project Costing uses the
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Labor Cost Account transactions to debit a default expense account for raw labor costs.
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the program credits a default payroll clearing liability account to balance the labor expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.
You can assign different sets of rules to and enable the Contingent Worker Labor and
Employee Labor function transactions to generate a different default clearing account based on
the person type. Alternatively, you can assign rules to and enable only the All Labor function
transaction to use the same rules for employees and contingent workers.
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Oracle Project Costing uses the Expense Report Cost Account function to determine the
expense default debit account for transactions associated with the Expense Reports expenditure
35
type class.
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When you run PRC: Distribute Expense Report Adjustments, Oracle Project Costing calculates
.(
and distributes costs originating from expense report adjustments, and uses the Expense Report
Cost Account function transactions to determine which default expense account to debit for
a
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the program credits a default supplier cost liability account to balance the supplier cost expense
account. If you specify a default account in Oracle Project Costing implementation options,
then the program uses the Default Supplier Cost Credit Account. Otherwise, you must set up
Oracle Subledger Accounting to derive the account. The program also generates cost
accounting events in Oracle Subledger Accounting.
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Oracle Project Costing uses the Usage Cost Account and the Usage Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Usages
35
When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
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the Usage Cost Account transactions to debit a default expense account for raw usages costs.
Usage Cost Clearing Account Function
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When you run PRC: Generate Cost Accounting Events for the Usage Cost process category,
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the program credits a default asset usages liability account to balance the usages expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.
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Oracle Project Costing uses the Misc Trans Cost Account and the Misc Trans Cost Clearing
Account functions to determine the default cost accounting for transactions associated with the
35
When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
.(
the Misc Trans Cost Account transactions to debit a default expense account for raw
miscellaneous costs.
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When you run PRC: Generate Cost Accounting Events for the Miscellaneous Cost process
category, the program credits a default miscellaneous cost liability account to balance the
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miscellaneous cost expense account. The program also generates cost accounting events in
Oracle Subledger Accounting.
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Oracle Project Costing uses the Burden Cost Account and the Burden Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Burden
35
When you run PRC: Create and Distribute Burden Transactions, Oracle Project Costing uses
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the Burden Cost Account transactions to debit a default expense account for the burden costs.
Burden Cost Clearing Account Function
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When you run PRC: Generate Cost Accounting Events for the Burden Cost process category,
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the program credits a default burden cost liability account to balance the burden cost expense
account. The program also generates cost accounting events in Oracle Subledger Accounting.
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Oracle Project Costing uses the Total Burdened Cost Debit and the Total Burdened Cost Credit
functions to determine the default cost accounting for total burdened costs.
35
When you run PRC: Distribute Total Burdened Cost, Oracle Project Costing creates two
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burdened cost distribution lines for the total burdened cost. One distribution line holds the
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default account for the burdened cost debit and the other distribution line holds the default
account for the burdened cost credit. Oracle Project Costing creates these two distributions for
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all expenditure items charged to projects which are defined to burden costs.
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The Total Burden Costs Debit/Credit function consists of the following functions:
• Total Burdened Cost Debit
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Oracle Project Costing uses the WIP Cost Account and the WIP Cost Clearing Account
functions to determine the default cost accounting for transactions associated with the Work in
35
Process (WIP) expenditure type class. In addition, Oracle Project Costing uses the Inventory
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Cost Account and the Invent. Cost Clearing Account functions to determine the default cost
accounting for transactions associated with the Inventory expenditure type class.
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When you run PRC: Distribute Usage and Miscellaneous Costs, Oracle Project Costing uses
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the WIP Cost Account transactions to debit a default expense account for raw work in process
costs.
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When you run PRC: Generate Cost Accounting Events for the Work in Process Cost process
category, the program credits a default work in process cost liability account to balance the
work in process expense account. The program also generates cost accounting events in Oracle
Subledger Accounting.
to
the program credits a default inventory cost liability account to balance the inventory expense
e
account. The program also generates cost accounting events in Oracle Subledger Accounting.
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35
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in.
When you enter project-related supplier invoices in Oracle Payables or receipt accruals in
Oracle Purchasing, Oracle Payables or Oracle Purchasing invokes the Account Generator in
35
real time. The Account Generator derives the Accounting Flexfield values based on project
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information in much the same way that AutoAccounting works in Oracle Project Costing
programs. After you interface supplier costs to Oracle Project Costing, you can adjust the
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supplier cost expenditure items in Oracle Project Costing. Oracle Project Costing processes
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these supplier invoice adjustments using the Supplier Invoice Cost Account AutoAccounting
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function.
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Oracle Project Costing uses the Supplier Invoice Cost Account function to debit the
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appropriate default expense account for supplier cost adjustments (includes adjustments to
expenditure items from invoices, receipts, and payments).
When you run PRC: Distribute Supplier Cost Adjustments or PRC: Distribute Supplier Cost
Adjustments for a Range of Projects, Oracle Project Costing uses the Supplier Invoice Cost
Account function to debit a default expense account for raw supplier costs.
to
accounting events in Oracle Subledger Accounting.
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Listings
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Listings
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• IMP: AutoAccounting Functions - For each function, this report displays all of the
possible parameters that AutoAccounting rules use to derive key flexfield segment values.
35
The report also shows you all of the transactions related to the AutoAccounting function
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prints each possible intermediate value and its corresponding segment value.
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• IMP: AutoAccounting Rule Definitions - For each AutoAccounting rule, this report
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displays the type of its intermediate source and the corresponding value for that source. If
the intermediate value source is a SQL statement, this report displays the text of that
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statement. This listing also includes the segment value source that maps an intermediate
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value to the final segment value. If the segment value source is a lookup set, then this
report displays the name of that lookup set.
• IMP: AutoAccounting Segment Rule Pairings - For each function, this report displays
each of the function’s transactions. It also lists the AutoAccounting rule and key flexfield
segment pairings for each transaction. This report also displays the function’s transactions
without paired segments and rules.
Quiz
Answer: d
Pr
iya
Chapter 7 - Page 32
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. n-t
Agenda
Pr
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Chapter 7 - Page 33
ide no
. n-t
Account Generator
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Account Generator
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The Account Generator uses Oracle Workflow to derive default account code combinations.
Oracle Payables and Oracle Purchasing use the Account Generator to determine the default
35
account code combinations for purchasing requisitions, purchase orders, supplier invoices, and
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expense reports based on the project information entered. You define functions and processes
to derive the Accounting Flexfield combinations. You can optionally customize the Account
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Oracle Purchasing
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Oracle Purchasing uses item types to generate account numbers for all requisitions and
purchase orders, whether they are project-related or not. Oracle Purchasing provides a set of
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default account generator processes for the accounts it needs to build. Oracle Purchasing
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provides default account generator processes. To derive the accounts based on project
information, you must change the default processes so that they use the project information.
For more information, see the “Oracle Purchasing User’s Guide.”
Oracle Payables
depends on whether you are entering an invoice or expense report that contains project and task
information:
• Supplier invoices
- Oracle Payables (Invoices window) calls the Project Supplier Invoice Account
Generator.
• Oracle Internet Expenses and Oracle Payables expense reports
to
- Oracle Internet Expenses or Oracle Payables calls the Project Expense Report
e
Account Generator.
s
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PA: Allow Override of PA Distributions in AP/PO
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You use the profile option PA: Allow Override of PA Distributions in AP/PO to control
whether users can override the account number that the Account Generator derives for project-
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related distributions. Settings for this profile options are:
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• Yes - User is allowed to update and override the generated Account.
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• No - User is not allowed to update and override the generated Account.
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• (No Value) - Equivalent to Yes.
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For more information regarding the Account Generator and Oracle Project Costing, see the
Oracle Projects Implementation Guide.
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35
iya
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The Account Generator uses Oracle Workflow to derive default account code combinations.
AutoAccounting determines default account combinations for all other project-related
35
transactions.
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AutoAccounting, the Account Generator, and Oracle Subledger Accounting each provide
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functionality to create accounting for project-related supplier costs and expense reports. When
you implement Oracle Purchasing and Oracle Payables integration with Oracle Project
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Costing, you must carefully consider how to set up the account derivation logic in each
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location.
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documents.
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• Project Supplier Invoice Account Generator (required) - Oracle Payables uses the
Account Generator to derive default debit accounts for project-related supplier invoices
that are not matched to a purchase order.
- Oracle Payables always uses the Account Generator for project-related invoices. You
must set up the Account Generator to generate a default account, even if the profile
option PA: Allow Override of PA Distributions in AP/PO. option is set to Yes.
debit account for supplier cost and expense report adjustments that you perform in
Oracle Project Costing. Oracle Project Costing uses this information to determine
whether to allow the adjustment when you enable Automatic Offsets in Oracle
Payables. Oracle Project Costing also uses this information to determine whether an
adjustment can potentially affect tax recoverability.
• Project Expense Report Account Generator (required) - Oracle Internet Expenses and
to
Oracle Payables (Invoices window) use the Account Generator to derive default debit
accounts for project-related expense reports. You set up the Account Generator when you
e s
implement Oracle Payables.
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• Supplier Invoice Cost Account AutoAccounting Function (required) - Oracle Project
lic
Costing uses this AutoAccounting function to derive default debit accounts for supplier
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cost adjustments that you perform in Oracle Project Costing.
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• Expense Report Cost AutoAccounting Function (required) - Oracle Project Costing
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uses this AutoAccounting function to derive default debit accounts for expense report
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adjustments that you perform in Oracle Project Costing.
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• Default Supplier Cost Credit Account Implementation Option (optional) - The
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program PRC: Generate Cost Accounting Events uses the specified account as the default
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credit account for supplier cost and expense report adjustments that you perform in Oracle
Project Costing. ide no
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• User-defined Setup in Oracle Subledger Accounting for Supplier Cost Adjustments
(optional) - Oracle Project Costing predefines setup in Oracle Subledger Accounting so
is a
that the create accounting program accepts the accounting for supplier cost and expense
th h
report adjustments from Oracle Project Costing without change. You can optionally define
e m)
- If you allow adjustments to supplier costs in Oracle Project Costing and you do not
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define a default supplier cost credit account in Oracle Project Costing implementation
options, then you must set up Oracle Subledger Accounting to derive the credit
in.
Quiz
Answer: a
Pr
iya
Chapter 7 - Page 39
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Agenda
Pr
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Chapter 7 - Page 40
ide no
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Oracle Projects creates project encumbrance entries when you enable top-down budget
integration for a project. Oracle Purchasing and Oracle Payables create encumbrance entries to
35
relieve the existing encumbrances and to create new encumbrance accounting entries. Oracle
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Projects provides this setup in Oracle Purchasing and Oracle Payables so that these
applications can create encumbrance for burden costs.
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Oracle Purchasing and Oracle Payables create encumbrance journals whenever any funds
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related action is performed for a document. For example, when you perform a Check Funds
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action for document, the encumbrance accounting events are processed to create the
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encumbrance journals in draft mode. When you perform a Reserve Funds action for a
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document, the encumbrance accounting events are processed to create the encumbrance
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journals in final mode and the funds balances are updated. After processing is complete, you
can review the updated funds balances.
If you define your own detailed accounting rules in Oracle Subledger Accounting, then Oracle
Subledger Accounting overwrites default accounts, or individual segments of accounts, that
Oracle Purchasing or Oracle Payables derives using the Account Generator.
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Oracle Project Costing uses the Project Budget Account Generation workflow process to
generate default accounts when a project budget is integrated with a non-project budget. You
35
must customize the Project Budget Account Generation workflow process to generate accounts
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Integration."
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Quiz
Answer: b
Pr
iya
Chapter 7 - Page 43
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Agenda
Pr
iya
Chapter 7 - Page 44
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accounting for subledger journal entries and transfers the accounting to Oracle General Ledger.
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It stores a complete and balanced subledger journal entry in a common data model for each
business event that requires accounting.
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Oracle Subledger Accounting provides a uniform approach to accounting and a common set of
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tools that enable you to configure accounting rules for applications that require accounting. It
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includes a common user interface and a set of programs that can generate accounting for
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When you set up rules in Oracle Subledger Accounting, you can define the types of lines,
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descriptions, and accounts to store on journal entries. Oracle Subledger Accounting partitions
data by subledger application, while storing the information in a common model.
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Oracle Project Costing fully integrates with Oracle Subledger Accounting so that you can
create accounting for your project-related transactions.
35
Oracle Project Costing generates accounting events and creates the subledger accounting
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entries for the accounting events. Oracle Project Costing predefines setup for Oracle Subledger
Accounting so Oracle Subledger Accounting accepts the default accounting information from
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Oracle Project Costing without change. Oracle Subledger Accounting transfers the final
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accounting to Oracle General Ledger. If you define your own detailed accounting rules in
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Oracle Subledger Accounting, then Oracle Subledger Accounting overwrites default accounts,
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or individual segments of accounts, that Oracle Project Costing derives using AutoAccounting,
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Oracle Project Costing generates accounting events for the business events that it processes and
then creates subledger accounting entries for the accounting events.
35
For example, a business event takes place when an employee charges time to a project. After
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you distribute costs for the labor expenditure items, you run PRC: Generate Cost Accounting
Events to generate accounting events. Next, you run PRC: Create Accounting to create
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As the foundation of the event model, Oracle Project Costing predefines event entities. An
event entity enables Oracle Subledger Accounting to handle the accounting for similar business
35
events in a consistent manner. The three event entities are Expenditures, Budgets, and Revenue
iya
category of business events for a particular transaction type or document. Event classes group
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An event type represents a business operation that you can perform for an event class. An
accounting event has both an event class and an event type that affect the subledger accounting
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entries. Event types provide the lowest level of detail for storing accounting definitions.
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Oracle Project Costing provides a predefined set of event classes and event types for each
accounting event entity. Oracle Project Costing also predefines accounting event class options
for each event class to specify the detailed information about the event class. For example, the
accounting event class options specify the general ledger journal category and the balance type
(actual, encumbrance, or budget) for each event class.
Quiz
Answer: a
Pr
iya
Chapter 7 - Page 49
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. n-t
Agenda
Pr
iya
Chapter 7 - Page 50
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You can optionally set up your own accounting rules in Oracle Subledger accounting. For
additional information, see the Oracle Subledger Accounting Implementation Guide.
35
iya
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Oracle Project Costing predefines a set of sources. Sources are pieces of information that
Oracle Subledger Accounting uses to determine how to create accounting for an accounting
35
event. Oracle Project Costing assigns the predefined sources to accounting attributes.
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Accounting attributes are values that Oracle Subledger Accounting needs to successfully create
subledger journal entries. For example, for the event class Labor Cost, Oracle Project Costing
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assigns the source Raw Cost to the accounting attribute Entered Amount. The program PRC:
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Create Accounting uses the raw cost value from the labor cost distribution line to determine the
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You can optionally define custom sources to extend the list of sources available to application
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accounting definitions. To create custom sources, you write PL/SQL functions that use the
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predefined sources and constant values as parameters. For example, if you capture the
geographic region to which each organization belongs in a descriptive flexfield segment, then
you can create a custom source to use the information in your application accounting
definitions. You use the expenditure organization (a predefined source) as a parameter in the
definition of the custom source. For information about how to define custom sources, see the
Oracle Subledger Accounting Implementation Guide.
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Oracle Project Costing provides predefined accounting setup for Oracle Subledger Accounting.
If you use the predefined setup, then Oracle Subledger Accounting accepts the default accounts
35
from Oracle Project Costing without change. You can optionally define your own detailed
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subledger accounting rules. Many different components come together to form the subledger
accounting setup:
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that determines how Oracle Subledger Accounting processes accounting events. The
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applications such as Oracle Project Costing, Oracle Payables, Oracle Purchasing, and
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Oracle Receivables. This grouping capability enables you to assign a set of application
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derivation rules, and journal entry descriptions into a complete set of journal line types
within an event class or event type.
• Journal Line Types: Journal line types determine the characteristics of subledger journal
entry lines for an event class. These characteristics determine whether the line is used to
create actual, budget, or encumbrance entries, whether the line is a debit or a credit,
whether matching lines are merged, and whether data is transferred to the general ledger in
to
summary or detail form.
• Account Derivation Rules: Account derivation rules determine the Accounting Flexfield
e s
values for subledger journal entries. You can define account derivation rules in Oracle
en
Subledger Accounting that generate either a value for a single Accounting Flexfield
lic
segment or a complete Accounting Flexfield account code combination.
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• Mapping Sets: Mapping sets enable you to assign a specific output value to an
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Accounting Flexfield or Accounting Flexfield segment. You use mapping sets when you
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set up account derivation rules. Account derivation rules determine the Accounting
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Flexfield values for subledger journal entries.
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• Journal Entry Description: The journal entry description determines both the content
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and sequence in which the elements of the description appear. You assign journal entry
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descriptions to headers and lines in the application accounting definition. Oracle
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Subledger Accounting assigns the descriptions to the journal header and lines when it
creates the draft or final accounting.
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For additional information, see the Oracle Subledger Accounting Implementation Guide.
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You must assign a subledger accounting method to a ledger. Assigning different subledger
accounting methods to different ledgers enables you to create multiple accounting
35
representations of transactions.
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Post-Accounting Programs
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Post-Accounting Programs
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Accounting uses accounting classes to classify journal entry lines. The post-accounting
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programs distinguish journal lines for processing based on the accounting class assigned to
each journal entry line.
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Oracle Project Costing provides two post-accounting programs, one for debits and one for
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credits, to obtain final accounting information from Oracle Subledger Accounting because the
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accounting that Oracle Project Costing creates using AutoAccounting may not be the same as
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the final accounting that Oracle Subledger Accounting transfers to Oracle General Ledger.
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Oracle Project Costing uses post-accounting programs to determine which journal entry lines
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to retrieve from Oracle Subledger Accounting when Oracle Project Costing performs the
following activities:
• Groups asset lines on capital projects
• Generates audit reports
Costing from other applications, such as Oracle Purchasing, Oracle Payables, or Oracle
Inventory
• Creates a reversing entry for expenditure items when you split an expenditure item,
transfer an expenditure item, or change transaction attributes for an expenditure item (for
example, change whether the expenditure item is billable or capitalizable)
The predefined setup for the post-accounting programs consists of the program code and a list
to
of the accounting classes assigned to each respective program. If you modify the accounting
class for a journal line type, or add a new accounting class and journal line type pair, then you
e s
must also update the accounting classes assigned to each of the predefined post-accounting
en
programs. This update ensures that the asset generation program, audit reports, and expenditure
lic
item splits and transfers in Oracle Project Costing continue to work accurately.
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Important: Do not add the same accounting class to both the debit and the credit journal line
b
types.
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Important: Oracle Project Costing predefines post-accounting program assignments for the
sfe
PA Postaccounting Debit program and the PA Postaccounting Credit program. Do not remove
n
the predefined accounting classes even if you define your own journal lines definitions and add
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accounting class assignments to the programs. In this case, Oracle Project Costing uses the
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predefined accounting classes to process and report on existing historical journals and new
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user-defined accounting classes that you add to process and report on new journals.
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35
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Oracle Subledger Accounting uses intracompany balancing rules to create balancing lines on
journal entries between balancing segment values. You set up this functionality in the
35
Accounting Setup Manager in Oracle General Ledger. The Accounting Setup Manager
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centralizes the common setup steps for the Oracle financial applications.
For example, if you define accounting rules for project costs that use the operating unit to
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derive the account for your balancing segment, then transactions can have unbalanced entries
.(
when you create transactions between two different operating units. To address this situation,
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Oracle Project Costing sends the unbalanced entries to Oracle Subledger Accounting and
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Oracle Subledger Accounting automatically creates debit and credit accounting lines to balance
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the subledger journal entries by balancing segment. Oracle Subledger Accounting uses the
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balancing accounts that you define for the ledger in the Accounting Setup Manager.
You must select the Enable Intracompany Balancing option in the ledger definition to enable
the application of the balancing rules. You also must set up the accounts to ensure that Oracle
Subledger Accounting generates the balancing journal entries. For information about cross-
entity balancing rules, including examples, see the Oracle Financials Implementation Guide.
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You can query accounting events, journal entries, and journal entry lines based on multiple
selection criteria. You can use subledger accounting inquiries to:
35
• View detailed information about the subledger journal entry headers for an accounting
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event.
.(
• Compare subledger journal entry information for any two journal entries.
a
When you view a transaction for a cost accounting event, Oracle Subledger Accounting drills
down to Oracle Project Costing and automatically opens and queries information in
expenditure inquiry. Similarly, you can drill down to other subledger applications to view
transaction information for the accounting events that originated in those applications.
Audit Reports
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Audit Reports
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The Project Subledger Audit Reports print cost distribution lines related to projects. The
reports enable you to drill down from a GL account balance in the trial balance to the
35
• AUD: Project Subledger Summary - This report prints a summary of cost distribution
lines by project. The report includes subtotals for GL Account, Project Number,
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• AUD: Project Subledger Detail by Project - This report shows cost distribution lines for
a
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• AUD: Project Subledger Detail by Expenditure Type - This report shows project
subledger detail across projects for one expenditure type.
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Summary
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Chapter 7 - Page 62
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Pr
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Chapter 8 - Page 1
Chapter 8
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Pr
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Chapter 8 - Page 2
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. n-t
Pr
iya
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a
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Chapter 8 - Page 3
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. n-t
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Objectives
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Chapter 8 - Page 4
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. n-t
Agenda
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Chapter 8 - Page 5
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When you charge a usage expenditure item to a project, your must specify the non-labor
resource utilized and the non-labor resource organization that owns the resource. When you
35
define non-labor resources, you can choose only expenditure types with the Usages
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Chapter 8 - Page 7
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Non-Labor Costing Implementation Steps
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1. In the Non-Labor Resources window, enter the name, description, effective dates. Select
an expenditure type for each non-labor resource entered.
35
2. In the Organizations region, select the organizations to which the resource is assigned and
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enter the effective dates. The organizations include any organization from your
organization hierarchy, regardless of whether the organization has the Project
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An expenditure type cost rate is a currency amount that Oracle Project Costing multiplies by
the expenditure type unit to calculate cost. In the Expenditure Types window, select an
35
expenditure type and choose the Cost Rates button to enter a cost rate for it.
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When you define an expenditure type, you specify whether cost rates are required. You can
only select the Cost Rates button for the expenditure type if you enable the Rate Required
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option. You cannot change this setting after you save the expenditure type. Instead, you must
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create a new expenditure type with a unique name and set the Rate Required option for it.
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In a multi-organization environment, you set up expenditure types once and they are shared
across all operating units. However, the cost rates for expenditure types are specific to each
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operating unit. You must define cost rates for each operating unit.
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For additional discussion regarding defining expenditure types, see the lesson titled
“Implementing Expenditures.”
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You define cost rate overrides in the Non-Labor Resources window. When you define non-
labor resources, you assign each non-labor resource an expenditure type. The cost rates you
35
define for an operating unit for the expenditure type apply to all non-labor resources with that
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expenditure type.
You can optionally define non-labor cost rate overrides for non-labor resources. You define
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each cost rate override by operating unit for a specific non-labor resource and organization
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combination.
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In a multi-organization environment, you set up non-labor resources once and share them
across all operating units, while you define cost rate overrides by operating unit.
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Agenda
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Chapter 8 - Page 11
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Listings
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Listings
7@
Use the following concurrent programs to document non-labor resource setup information:
• IMP: Expenditure Cost Rates - Use the IMP: Expenditure Cost Rates listing to review
35
the non-labor expenditure cost rates. You can print a listing for one or all expenditure
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categories, one or all expenditure types, or for a specified effective date. If an effective
date is specified for the report, then the report lists only expenditure cost rates that are
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report displays the organization’s non-labor resources and the corresponding expenditure
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Quiz
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Answer: a, c
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Chapter 8 - Page 13
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Quiz
Answer: b
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Chapter 8 - Page 14
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Summary
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Chapter 8 - Page 15
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Chapter 8 - Page 16
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Chapter 9 - Page 1
Chapter 9
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Chapter 9 - Page 2
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Objectives
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Chapter 9 - Page 4
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Agenda
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Chapter 9 - Page 5
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When you import or enter labor costs into Oracle Project Costing as a quantity of hours, the
cost distribution program determines how to calculate the raw cost of the labor. To accomplish
35
this, within Oracle Project Costing you can maintain labor cost rate schedules by employee or
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by job or use a labor costing extension to calculate the cost. You also have the option of
overriding labor cost rates for individual employees. When you run the program PRC:
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Distribute Labor Costs or the program PRC: Distribute Labor Costs for a Range of Projects,
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the program uses the cost rates to determine the raw cost for each uncosted labor expenditure
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item. You can also define a method for calculating overtime cost.
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A labor costing multiplier is a value by which Oracle Project Costing multiplies an employee’s
labor cost rate to calculate the employee’s overtime premium cost rate:
35
• Labor Cost Rate * Labor Cost Multiplier = Overtime Premium Labor Cost Rate
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Oracle Project Costing then multiplies this overtime premium labor cost rate by the number of
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overtime hours an employee works to calculate the overtime premium for that employee:
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You define a labor cost multiplier for each kind of overtime your business uses, such as double
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time, or time and a half. For example, if you pay an employee double time for all overtime
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hours, then define a labor cost multiplier of 1.0. You multiply the employee’s labor cost rate by
1.0 to calculate the employee’s overtime premium labor cost rate. If you pay an employee time
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and a half for all overtime hours, then define a labor cost multiplier of 0.5 to calculate the
employee’s overtime premium labor cost rate. An employee’s total labor cost is the overtime
premium plus the total number of hours that employee worked multiplied by the employee’s
labor cost rate:
• Overtime Premium + (Total Hours x Labor Cost Rate) = Total Labor Cost
Quiz
Answer: a
Pr
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Chapter 9 - Page 8
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You define a labor costing rule for each pay type your business uses. For example, you can
define a labor costing rule for pay types such as exempt, non-exempt, uncompensated,
35
compensated, or hourly. When an employee charges time to a project, Oracle Project Costing
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processes the labor hours according to the employee’s labor costing rule.
To define a labor costing rule:
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- Rates: When you select Rates, Oracle Project Costing calculates the labor costs
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- Extension: When you select Extension, labor costs are calculated by the labor
costing extension. When you use this option, you are not required to maintain
hourly cost rates in Oracle Project Costing.
2. If the overtime calculation extension creates overtime hours, then you can select the
Overtime Trans Defaults button and specify a default project and task by operating unit
for system-generated expenditure items.
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Quiz
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Answer: b, c
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Chapter 9 - Page 11
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Rate Schedules
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Rate Schedules
7@
You can define rate schedules for both billing and costing. A cost rate schedule maintains
hourly cost rates for employees or jobs. No system attribute exists to distinguish between a bill
35
For labor cost rate schedules, specify one of the following schedule types for each rate
schedule you define:
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• Employee
- Use this type of rate schedule to define standard hourly rates or percentage markups
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• Job
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- Use this type of rate schedule to define standard hourly rates by job title. When you
enter a job-based rate schedule, you enter a job group to indicate which jobs are used
to determine rates. When a project uses a job-based bill rate schedule, the job group
on the schedule must match the project’s billing job group.
In a multi-organization environment, you can share rate schedules across different operating
units, or have different rates for the same resource in different operating units.
1. Specify the operating unit to which your organization and rate schedule belongs. When
you have access to only one operating unit, that operating unit appears as a default value
in this field.
2. Specify the organization that maintains the schedule.
- The organization you enter can be any organization from your organization hierarchy,
regardless of whether the organization has the Expenditure Organization
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classification, and regardless of the start and end dates for the organization.
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3. In the Rate Schedules window, enter a schedule name and a description of the schedule.
s
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4. Specify a currency for the schedule.
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5. Optionally, enable the Share Across Operating Units check box.
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- This optional enables other operating units to use this schedule.
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6. Select a schedule type.
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7. Specify rates or markups for employees or for job titles.
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specific expenditure organizations. The costing rule and rate schedules assigned to an
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• Specify currency rate attributes to calculate labor costs if the currency of the cost rate
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schedule is different from the currency of the operating unit in which the timecard is
entered.
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• Define default overtime projects and tasks for organizations using the overtime calculation
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applies the following rules in the order presented to determine the costing rule for each
transaction:
• If an assignment exists for the transaction expenditure organization, then the
corresponding costing rule and rate schedule are used to calculate labor costs.
• If an assignment does not exist for the expenditure organization, Oracle Project Costing
uses the Expenditure Organization Hierarchy and searches for an assignment for the parent
parents and a rule is assigned to each, then the rule assigned to the lowest level parent
organization is applied.
• If an assignment does not exist for a parent organization, then Oracle Project Costing
searches for an assignment for the expenditure-operating unit.
To assign costing rules and rate schedules:
1. Select an Operating Unit, Organization or both.
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- If you do not select an operating unit, then Oracle Project Costing displays all
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organizations that are part of any Expenditure/Event Organization Hierarchy.
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- If you select an operating unit, then Oracle Project Costing displays only those
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organizations that are in the Expenditure/Event Organization Hierarchy for the
selected operating unit. An organization does not have to be classified as Project
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Expenditure/ Event Organization to appear on the list.
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2. Select a labor costing rule.
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- If the labor costing rule has a costing method of Rates, then select the cost rate
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schedule that defines the hourly cost rates for employees in the selected organization.
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- If you assign an organization labor costing rule to an organization that is not
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classified as a Project Expenditure/Event Organization, then the rule applies to
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organizations that are below it in the hierarchy, unless you assign a rule to an
organization at a lower level in the hierarchy. For example, a hierarchy has three
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organization labor costing rules only to Organization 1 and Organization 11, then the
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rule that you assign to Organization 11 takes precedence for Organization 111.
3. Enter a default job rate schedule.
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6. Enter the currency conversion attributes in the Currency Conversion Attributes region.
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- Enter this information if your cost rate schedule currency is different from your
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- If you do not specify currency attributes, then Oracle Project Costing applies the rate
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For individual employees, you can enter labor costing overrides. You can override the assigned
costing rule, override the assigned cost rate schedule, or enter an overriding cost rate.
35
1. In the Labor Costing Overrides window, find any existing labor costing overrides.
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- Select either the Employee Name or Employee Number from the list of values.
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3. Choose an override type to specify whether to override the assigned rate schedule or enter
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Use the labor costing extension to implement a unique costing method for labor transactions.
The standard method calculates raw cost using the number of hours multiplied by the
35
employee’s hourly cost rate. The labor costing extension enables you to derive raw cost
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amounts for individual labor transactions. Examples uses of the extension include:
• Standard cost rate by job
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You can use the labor costing extension to implement unique costing methods other than the
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standard method, which calculates raw cost using the number of hours multiplied by the
employee’s hourly cost rate.
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Processing
Oracle Project Costing processes the labor costing extension during labor cost distribution
before calculating standard raw cost amounts. If Oracle Project Costing encounters a labor
costing extension that derives the raw cost amount of a labor transaction, then it skips the
standard raw cost calculation section for that transaction.
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The labor transaction extension enables you to create additional transactions for individual
labor items charged to projects:
35
• Create overtime premium transactions for overtime hours based on company overtime
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policies.
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• Create fringe benefit transactions that are charged to the same project as the source labor.
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• Create additional transactions for hazardous work performed for every labor transaction
charged to certain projects.
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You can create additional transactions for straight time labor transactions and overtime labor
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transactions. You create additional labor transactions based on the source labor transactions
that you enter on timecards.
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Related Transactions
Additional transactions created for labor transactions are referred to as related transactions. All
related transactions are associated with a source transaction and are attached to the expenditure
item ID of the source transaction. You can identify and process the related transactions by
referring to the expenditure item ID of the source transaction.
transaction raw cost amount. Related transactions can be burdened, billed, and accounted for
independently of the source transaction.
Processing
Oracle Project Costing processes the labor transaction extension during labor cost distribution.
When you distribute labor costs, the program processes the labor transaction extension after it
calculates the raw cost of the source transactions. This sequence enables you to derive the cost
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of the related transaction from the cost of the source transaction. You also use the labor
transaction extension to calculate new cost amounts for related transactions if the source
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transaction is recosted.
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Complete the following steps to implement an indirect project to collect overtime premium
costs:
35
- For each type of overtime your business uses, define a corresponding labor cost
a
multiplier. You assign the appropriate labor cost multiplier to each overtime task.
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- You can define one indirect project to hold all of your company’s overtime costs, or
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you can define many indirect projects to make it easier to enter and report overtime
by group or office.
- If you decide to use more than one indirect project to hold your company’s overtime
costs and you are using automatic overtime calculation, then you must include logic
in your Overtime Calculation extension to charge the overtime hours to the
appropriate overtime project.
- For each overtime project, you must define a task for each type of overtime your
business uses. Different types of overtime use different labor cost multipliers to
calculate overtime costs.
- If you are using automatic overtime calculation, then you must include the logic in
your Overtime Calculation extension to charge overtime hours to the appropriate
overtime task.
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• Define labor costing rules.
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- If you charge overtime costs to an indirect project, then you can use Oracle Project
s
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Costing to record the premium your business pays employees for overtime hours they
work.
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• Assign a labor cost multiplier for each overtime task.
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• Implement AutoAccounting.
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For additional discussion regarding how to implement overtime calculations, see the Oracle
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Projects Implementation Guide.
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You can specify how to use the Overtime Calculation extension in the Implementation Options
window.
35
The overtime calculation extension enables you to define your own rules to implement
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company-specific overtime calculation policies. The extension calculates overtime costs and
charges them to an indirect project other than the project where the labor was charged.
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To charge overtime to the project where the labor was charged, consider creating items via the
labor transaction extension.
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Oracle Project Costing provides a template Overtime Calculation extension. You can use the
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template to understand the extension, and then make appropriate changes to meet your business
needs.
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If you use both the Labor Transaction Extension and the Overtime Calculation program, then
you must define conditions so that only one of these options processes each transaction.
Quiz
Answer: a
Pr
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a
Chapter 9 - Page 23
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Agenda
Pr
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a
Chapter 9 - Page 24
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Listings
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Listings
7@
• IMP: Labor Cost Multipliers - Report to review all labor cost multipliers.
• IMP: Labor Cost Rates Listing - Report to review all employees and their cost rates, job
35
level, job discipline, or labor costing rule. For each employee listed, this report displays
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the employee’s active organization and job assignments, the assigned labor costing rule,
and the hourly cost rate.
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• IMP: Labor Cost Rates Listing by Organization - Report to review all employees and
their cost rates, job level, job discipline, or labor costing rule. This report starts at a
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specified organization and reports down the organization hierarchy listing employees and
their labor cost rates. You cannot print a listing for a single organization using this report
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• IMP: Labor Costing Rules Listing - Report to review labor costing rules.
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Summary
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Chapter 9 - Page 26
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Chapter 10 - Page 1
Chapter 10
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Unauthorized reproduction or distribution prohibited. Copyright© 2022, Oracle University and/or its affiliates.
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Chapter 10 - Page 2
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Objectives
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Chapter 10 - Page 4
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Agenda
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Chapter 10 - Page 5
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Overview of Burdening
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Overview of Burdening
7@
Burdening, also known as cost plus processing, is a method of applying one or more burden
cost components to the raw cost amount of each individual transaction to calculate burden
35
costs. You can choose to account for the individual burden cost components to either track the
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overhead absorption or to account for the total burdened costs. You can write custom reports
using standard views to report all burden cost components for each detail transaction.
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The objective of burdening is to provide you with a buildup of raw and burden costs, so you
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can accurately represent the total cost of doing business. You can choose to calculate total
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burdened costs as a buildup of costs using a precedence of multipliers. Taking the raw cost,
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Oracle Project Costing performs a buildup of burden costs on top of raw costs to provide you
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with a true representation of costs. You provide the multiplier that Oracle Project Costing uses
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to calculate the cost. Oracle Project Costing performs the buildup for each detailed transaction.
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• Burden Costs - Legitimate costs of doing business that support raw costs and cannot be
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• Burden Structure - Determines how cost bases are grouped and what types of burden
costs are applied to the cost bases. A burden structure defines relationships between cost
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bases and burden cost codes and between cost bases and expenditure types.
• Burdened Cost - The cost of an expenditure item, including raw cost and burden costs.
• Cost Base - The grouping of raw costs to which burden costs are applied.
• Raw Costs - Costs that are directly attributable to work performed. Examples of raw costs
are salaries and travel expenses.
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expenditure item. You can view the total burdened cost and the raw cost of each item. Oracle
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Project Costing displays the raw and burdened costs on windows and reports.
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Separate Project
You can choose to hold the burden cost components as separate expenditure items on the same
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project. Alternatively, you can show burden cost as summarized expenditures on a separate
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project that you assign in the Project Types window. The expenditure items storing the burden
cost components have a different expenditure type that is classified by the expenditure type
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class Burden Transaction. Oracle Project Costing summarizes the burden cost components to
create the burden transactions. The summarization is by project, lowest task, expenditure
organization, expenditure classification, supplier, PA period, and burden cost code. You can
also use the Burden Resource Extension to specify the attributes that Oracle Project Costing
uses when it groups summary burden transactions. The link to the original expenditure item is
maintained, but is not visible when you look at the summarized expenditures.
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burdening in Oracle Subledger Accounting and Oracle General Ledger. The program PRC:
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Create and Distribute Burden Transactions summarizes the burden costs and creates the
expenditure items for the burden transactions. You can create the burden transactions on the
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You may choose to account for the total burdened cost of the items, without distinguishing the
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amounts by burden cost components. You can use this approach to track the total burdened
cost in a cost asset or cost WIP (work in process) account. This method is also sometimes
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accounting in Oracle Project Costing (rather than importing the accounting), then you must set
up AutoAccounting to derive the same default GL account for both the debit and the credit
account. You must generate cost accounting events for the cost distribution lines for these
expenditure items, create the final accounting in Oracle Subledger Accounting, and transfer the
subledger accounting to Oracle General Ledger.
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Use the Costing Information tab on the Project Types window to define default settings for
burdening and processing for projects:
35
• Burdened - Indicates whether to burden raw costs charged to projects using this project
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type.
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• Schedule - The burden schedule to use as the default cost burden schedule. You enter a
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schedule only if the project type is burdened. If the project type is burdened, then this field
is required.
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• Allow Schedule Override - Indicates whether you can override the default cost burden
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schedule when entering and maintaining projects and tasks. Deselect the check box if you
want to ensure that all projects of a project type use the same schedule. Check the box to
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allow updates to the cost burden schedule on the projects and tasks. You can enter this
only if you enabled the Burdened check box.
• Burden Cost on same expenditure item - Select if you want to store the burden amount
in the same expenditure item, and then optionally select a project and task to account for
the expenditure item.
the same expenditure item, and additionally to show the burden cost on separate,
summarized expenditures on a separate project. Select a project and (optional) task that
accounts for the expenditure item.
• Burden Cost as separate expenditure item - Select this option to account for burden
amounts as a separate expenditure item.
• Enable Accounting for Total Burdened Costs - Select this option to generate accounting
to
for the total burdened cost.
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- Note: If you store burden costs as a value on the same expenditure item for reporting
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purposes only, and you do not want to generate accounting for total burdened cost,
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then do not enable this option.
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Quiz
Answer: b
Pr
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a
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Chapter 10 - Page 13
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Agenda
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a
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Chapter 10 - Page 14
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Complete the setup steps listed on the slide to implement burden costing.
35
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Cost bases refer to groups of raw costs that you use for applying burden costs. You assign cost
bases to burden structures, and then specify the types of raw costs that are included in the cost
35
base along with the types of burden costs that are applied to the cost base.
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Cost base types refer to the use of cost bases. Oracle Project Costing predefines the cost base
types Burden Cost and Other. You use cost bases with the type Burden Cost in burden
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calculations. Oracle Project Costing does not include cost bases with a type other than Burden
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Cost in burden calculations. You use these cost bases for grouping expenditure types for
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Burden cost codes represent the types of costs to allocate to raw costs. You can use burden cost
codes for costing, revenue generation, and billing. You can also use burden cost codes to report
35
and account for on burden cost recovery components in Oracle Project Costing.
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Define an expenditure type for burden cost codes that Oracle Project Costing processes as
separate, summarized burden transactions. You must assign the Burden Transaction
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Burden Structures
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Burden Structures
7@
You define the cost buildup using a burden structure. A burden structure determines how you
group cost bases and establishes the method of applying burden costs to raw costs. Expenditure
35
types classify raw costs and burden cost codes classify burden costs. The relationship between
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expenditure types and burden cost codes within each cost base determines what burden costs
Oracle Project Costing applies to specific raw costs, and the order in which Oracle Project
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Each expenditure type can belong to only one cost base having a type of Burden Cost within
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each burden structure. This setup ensures that Oracle Project Costing does not burden an
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If you do not assign an expenditure type to a cost base, then Oracle Project Costing does not
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burden transactions with that expenditure type. The burdened cost for these transactions equals
the raw cost of the transaction.
Example
The diagram on this page illustrates a burden structure with the following cost bases:
• Labor
- Includes the expenditure types Professional, Clerical, and Sales.
(G&A).
• Material
- Includes the expenditure types Supplies and Construction Materials.
- Is assigned the burden cost codes Handling and General and Administrative (G&A).
• Expense
- Includes the expenditure types Travel, Meals, and Airfare.
to
- Is assigned the burden cost code General and Administrative (G&A).
e s
Copying Burden Structures
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When you copy a burden structure, Oracle Project Costing copies the following assignments
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from the existing (From) structure to the new (To) structure:
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• Cost base assignments
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• Burden cost codes
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• Expenditure types
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To copy an existing burden structure to a new burden structure, first enter header information
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for the new burden structure.
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35
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Burden Structures
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Burden Structures
7@
Create an Additive burden structure to apply each burden cost code assigned to a cost base
using the same precedence when calculating burden costs. Additive schedules automatically
35
provide a default precedence value of 1 to each burden cost code in the structure.
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Burden Structures
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Burden Structures
7@
Create a Precedence burden structure to specify the order in which each burden cost code in a
cost base is applied to raw costs. Enter the precedence in which you want to apply each burden
35
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Two types of burden schedules exist that you can use in Oracle Project Costing:
• Firm - Use firm schedules if you do not expect your multipliers to change. Generally, you
35
use firm schedules for costing or commercial billing schedules. Firm schedules can have
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multiple versions, but never more than one version for an effective date range.
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• Provisional - Because you do not always know burden multipliers at the time that you
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calculate total burdened costs, you can use provisional multipliers. Provisional multipliers
are generally estimates based on a company’s forecast budget for the year. When you
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determine the actual multipliers that apply to costs, then you replace the provisional
multipliers with the actual multipliers. Oracle Project Costing processes the adjustments
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You define schedule versions for a burden schedule to record the date range within which
multipliers are effective. You can have an unlimited number of versions for each burden
schedule, but you can have only one active version at a given point in time.
The profile option PA: Default Burden Schedule Type indicates the default burden schedule
type when entering a standard burden schedule using the Burden Schedules window.
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When you create burden schedules, you assign a multiplier to an organization and burden cost
code. The multiplier specifies the amount by which Oracle Project Costing multiplies the raw
35
cost to obtain the burden cost amount. When you cost the expenditure items, Oracle Project
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Costing looks at the expenditure organization on the expenditure item to determine what
multiplier to use for burden calculation.
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Effective multipliers cascade down the Project Burdening Hierarchy, starting with the parent
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organization. If Oracle Project Costing finds a level in the hierarchy that does not have a
multiplier defined, then it uses the multipliers entered for the parent organization. Therefore, an
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organization multiplier schedule hierarchy is really a hierarchy of exceptions. You define the
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multipliers for an organization only to override the multipliers of its parent organization.
Suggestion for Organizations that Have No Burden
You can set up special procedures for organizations that have no burden. For example, your
company can use contractors that do not have a particular type of burden cost (such as fringe)
applied to their raw cost. To implement this scenario, first set up a new expenditure
organization for contractors. Then, assign that organization to the burden schedule and use a
that burden cost for Fringe is calculated for the contractor’s organization, Oracle Project
Costing multiplies the contractor’s raw cost multiplier by zero, resulting in a burden cost
amount of zero, which reflects the true representation of the raw cost and burden multipliers.
Adding a New Organization
If you add a new expenditure organization after you have compiled schedule revisions, you
must ensure that the new organization is included in the schedules:
to
• If the organization has its own multipliers, then add multipliers to appropriate schedule
e
revisions and recompile.
s
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• If the organization uses parent organization multipliers, then run the concurrent program
PRC: Add New Organization Burden Compiled Multipliers.
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• In the Burden Schedules window, enter the name and description of the burden schedule
you are defining.
35
• Enter the default burden structure for this schedule. You can see the structure of a
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particular revision when you review revision details. You can change the default structure
of the schedule at any time. Oracle Project Costing uses the new default structure for any
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new revisions that you create. You can update the default structure to create revisions that
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- The burden hierarchy you enter for the burden schedule is the default hierarchy for
the latest version. The burden hierarchy information is displayed in the Burden
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structure, enter new burden multipliers, or apply actual rates to provisional multipliers.
• The start and end dates for revisions in a provisional schedule must match GL periods. For
firm schedules, Oracle Project Costing provides you with the flexibility to use any date as
the start or end date.
• Whenever you create a new schedule revision, Oracle Project Costing automatically closes
the previous open revision. The end date defaults to the date preceding the start date of the
to
new revision.
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• Enable the Hold check box to hold this schedule revision from compiling.
s
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• Choose the Details button to review the details of a particular revision.
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• Choose Actual if you want to apply actual multipliers to provisional revisions.
Multipliers
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• In the Multipliers region, enter multipliers for a schedule revision.
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• You also use this region to compile burden multipliers.
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• Choose the Copy button to copy multipliers from one schedule revision to a new revision.
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You must create and save the Copy To revision before you can copy multipliers to the new
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revision. If you have a responsibility with the Project Burden Schedule Copy function
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assigned to it, then you can copy multipliers across schedules and schedule revisions.
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Otherwise, you can only copy multipliers between revisions that use the same burden
structure.
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• When you modify the multipliers on a burden schedule and recompile, Oracle Project
is a
Costing identifies the existing expenditure items affected by the changes and marks the
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items for retroactive reprocessing. If you want to change the multipliers and only use them
for expenditure items moving forward, then end date the current version of the schedule
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and create a new version with the revised multipliers. Oracle Project Costing uses the new
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version to calculate burden amounts for expenditure items with expenditure item dates that
fall within the dates for the new burden schedule version.
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Compiling
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• After you have completed entry of all multipliers and saved your work, choose the
Compile button to compile new multipliers. When you compile a schedule, Oracle Project
35
• You can also run PRC: Compile All Burden Schedule Revisions to compile multiple
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You can assign burden schedules to project types, projects, and tasks. When you assign
schedules to a project type, the schedules are the default schedules for projects and tasks that
35
use the project type. Assigning burden schedules to project types allows you to implement
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company policies. For example, you can implement a policy that requires all projects of a
particular project type to maintain the same multipliers for costing purposes. You can change
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the default schedule for a project or task. You can use burden schedule overrides to override
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default schedules at the project and task levels. Burden schedule overrides generally reflect
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multipliers that have been negotiated specifically for a particular project or task.
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You can change the default burden schedules for a project or task. If you change the burden
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schedule for a lowest level task that has items processed, then Oracle Project Costing does not
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automatically mark the items for reprocessing. Only new items that you charge to the task use
the new burden schedule. You can mark the items for recalculation in the Expenditure Inquiry
window. Marking the items causes Oracle Project Costing to use the new burden schedule
assigned to the task to reprocess the items.
Once you assign a burden schedule to a project, you can use the View Burdened Costs window
to test your burden structure and burden schedule implementation.
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Use the Burden Costing client extension to override the burden schedule ID and assign a
different burden schedule to an expenditure item. Oracle Project Costing calls the Burden
35
Costing extension during cost distribution processing. You can modify the extension to satisfy
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your business rules for assigning burden schedules. For additional information, see the Oracle
Projects APIs, Client Extensions, and Open Interfaces Reference.
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You can set the PA: Report Separate Burden Transactions with Source Resources profile
option to have Oracle Project Costing assign summary burden transaction expenditure items to
35
the same resource class as their source raw cost expenditure items. This option enables you to
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assign both burden costs and their source raw costs to the same resource class for reporting
purposes.
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For example, for timecards, if you set the profile option to Yes, then Oracle Project Costing
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assigns both the labor raw cost expenditure items and the related summarized burden
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transaction expenditure items to the People resource class. Alternatively, if you set this profile
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option to No, then Oracle Project Costing assigns the raw cost expenditure items to the People
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resource class and the related summarized burden transaction expenditure items to the
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Financial Elements resource class. These assignments takes place because labor raw cost
expenditure items have an expenditure type class of Straight Time and burden transaction
expenditure items have an expenditure type class of Burden Transaction.
This profile option only affects transactions charged to projects where the Burden Cost as
Separate Expenditure Item option is enabled for the project type.
If you set this profile option to Yes, then you must modify the Burden Resource Extension to
specify the attributes that Oracle Project Costing uses when it groups summary burden
transactions. For additional information about this extension, see Burden Resource Extension,
Oracle Projects APIs, Client Extensions, and Open Interfaces Reference.
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identifies the existing transactions affected by the changes and marks the items for
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reprocessing. When accounting for the adjusted cost, you can choose to reverse the original
accounting entries and generate new ones for the adjusted cost, or you can choose to generate
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new accounting lines for the difference between the original and new burden cost amounts. To
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select the accounting option that best fits your business needs, enable or disable the profile
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option PA: Create Incremental Transactions for Cost Adjustments Resulting from a Burden
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Schedule Recompilation. See the following pages for examples of how this profile option
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7@
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
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Burden Schedule Recompilation profile option to No, Oracle Project Costing reverses the
original accounting entries and creates new entries for the adjusted cost amounts. Oracle
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Project Costing reverses the raw accounting lines and generates new adjusted lines even though
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Chapter 10 - Page 33
Costs without Incremental Transactions
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7@
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
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Burden Schedule Recompilation profile option to Yes, Oracle Project Costing does not reverse
the original accounting entries. Instead, Oracle Project Costing creates new accounting entries
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for the difference between the original and new burden cost amounts.
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Chapter 10 - Page 35
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7@
When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
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Burden Schedule Recompilation profile option to No, Oracle Project Costing reverses the
original accounting entries for the raw cost. Oracle Project Costing then creates new raw cost
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entries and burden entries for the difference between the original and new burden cost
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amounts.
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35
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When you set the PA: Create Incremental Transactions for Cost Adjustments Resulting from a
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Burden Schedule Recompilation profile option to Yes, Oracle Project Costing does not reverse
the original accounting entries. Instead, Oracle Project Costing creates new burden entries for
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the difference between the original and new burden cost amounts.
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35
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Quiz
Answer: b
Pr
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Chapter 10 - Page 40
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Quiz
Answer: a
Pr
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a
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Chapter 10 - Page 41
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Quiz
Pr
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Answer: a, b, d
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a
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Chapter 10 - Page 42
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Agenda
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a
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Chapter 10 - Page 43
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The calculation of burden cost includes the following processing logic and calculations:
1. The program selects expenditure items with a raw cost amount for processing.
35
2. The program determines whether the related project type of the expenditure item is
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- If Yes (the project type is defined for burdening), then the program determines which
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- If No (the project type is not defined for burdening), then the program does not
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burden the item. The program assumes the burden multiplier is zero (burden cost is
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3. To determine which burden multiplier to use, the program determines if there is a burden
schedule override for the expenditure:
35
- The program uses the task burden schedule override on the associated task, if such
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an override exists.
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- If no task burden schedule override exists on the associated task, then the program
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burden schedule to use for burden cost calculations in the following order:
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5. After the program determines which schedule to use, it verifies whether the expenditure
item’s expenditure type is found in any of the cost bases of the selected burden schedule
35
revision.
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- If an expenditure type is excluded from all cost bases in the burden structure, then
the program does not burden the expenditure items that use that expenditure type
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(burden cost equals zero, thus burdened cost equals raw cost).
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- Otherwise, the program uses burden multipliers from the appropriate burden
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schedule revision. If a schedule ID override exists, then the program uses that
revision.
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6. The program calculates burden cost and total burdened cost amounts according to the
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1. PRC: Distribute Total Burdened Costs - Creates the total burdened cost distribution
lines for all transactions charged to burdened projects, even if the transaction is not
35
burdened, to account for the total project costs in the cost WIP account.
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2. PRC: Generate Cost Accounting Events - Generates accounting events for total
burdened cost distribution lines. If you select Total Burdened Cost for the Process
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Category parameter, then the program generates accounting events only for total
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burdened costs.
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3. PRC: Create Accounting - Creates draft or final accounting entries in Oracle Subledger
Accounting for the accounting events. When you run the program in final mode, you can
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optionally choose to automatically transfer the final accounting to Oracle General Ledger,
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initiate the journal import program, and post the journal entries in Oracle General Ledger.
If you select Total Burdened Cost for the Process Category parameter, then the program
creates accounting only for total burdened cost accounting events.
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creates the expenditure items for the burden transactions, and runs the distribution
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program. The burden transactions are created on different projects depending on the
method you use to store burden costs.
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2. PRC: Generate Cost Accounting Events - Generates accounting events for burden
transactions. If you select Burden Cost for the Process Category parameter, then the
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3. PRC: Create Accounting - Creates draft or final accounting entries in Oracle Subledger
Accounting for the accounting events. When you run the program in final mode, you can
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optionally choose to automatically transfer the final accounting to Oracle General Ledger,
initiate the journal import program, and post the journal entries in Oracle General Ledger.
If you select Burden Cost for the Process Category parameter, then the program creates
accounting only for burden cost accounting events.
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• PRC: Add New Organization Compiled Burden Multipliers - Adds burden multipliers
to burden schedules for an organization when you add a new organization to your
35
organization hierarchy. If you do not add the organization to a specific schedule revision,
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then this program compiles rates for the organization in all burden schedule revisions
using the rates of the parent organization as defined in the organization hierarchy. A
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burden schedule revision must already be compiled for this program to add the
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organization rate. Run this program after you create the organization and before you
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Note: Run this program for the parent organization before you run it for the child
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organization.
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• PRC: Compile All Burden Schedule Revisions - Compiles all burden schedule revisions
that are not compiled and are not on hold.
Quiz
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Answer: a, c
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a
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Chapter 10 - Page 50
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Summary
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Chapter 10 - Page 51
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Pr
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Chapter 10 - Page 52
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Pr
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Chapter 11 - Page 1
Chapter 11
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Pr
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Chapter 11 - Page 2
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Pr
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Chapter 11 - Page 3
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Objectives
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Chapter 11 - Page 4
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Agenda
Pr
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Chapter 11 - Page 5
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Oracle Project Costing provides powerful features that allow you to:
• Adjust expenditure items on your projects
35
See also:
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• For discussion regarding Cross Charge related adjustments, see the lesson titled “Cross
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Charge.”
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• For discussion regarding adjustments to supplier costs, see the lesson titled "Integration
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• For discussion regarding Capital Project specific adjustments, see the lesson titled “Asset
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Capitalization.”
• For discussion regarding Contract Project specific adjustments, see the course titled
“R12.x Project Billing Fundamentals.”
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The Allow Adjustments option for a transaction source controls what types of adjustments you
can make to expenditure items associated with the transaction source.
35
If you enable this option, then you can adjust imported transactions in Oracle Project Costing
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after you load them via Transaction Import. Enabling this option enables you to make
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adjustments and changes that can result in a new GL account or cost amounts for an item. For
example, you can make the following types of adjustments:
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• Recalculate raw and burden costs (Raw cost values for transactions that were already
costed when loaded into Oracle Project Costing are not changed if you mark the item for
cost recalculation.)
• Reclassify an item as billable or nonbillable
• Reclassify an item as capitalizable or noncapitalizable
• Change the work type of an item
to
Implementation Options for each operating unit.
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• Define a rule in Oracle Subledger Accounting to determine the supplier cost credit
s
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account.
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This setup is required for the program PRC: Create Accounting to successfully create
accounting for supplier cost adjustments.
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Allow Adjustments Option - Disabled
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If the option is disabled, then you can still perform the following adjustments:
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• Apply a billing hold
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• Apply a one-time billing hold
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• Release billing hold
• Recalculate burden cost - You can recalculate burden costs only if the Import Burdened
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Amounts transaction source option is not enabled.
Gu s a
• Recalculate revenue
is a
• Change comment
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• Change the work type (only if the change does not affect the billable status or capitalizable
status of the expenditure item)
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- Note: The profile option PA: Transaction Billability derived from Work Type controls
7@
whether the work type determines the billable status of an expenditure item.
35
If you do not allow users to adjust imported transactions in Oracle Project Costing, then you
can adjust the transactions in the originating external system. After you adjust the transactions,
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To adjust the expenditure items for a project, the project status must allow adjustments. You
use the Status Controls region of the Statuses window to define actions that are allowed or
35
restricted for each project status. Enable the Adjust Transactions status control to allow
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You can recalculate the burden cost of an expenditure item if you find that the burdened cost
amount is incorrect. To produce correct recalculation results, you must correct the source of the
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• When you select Recalculate Burden Cost for a burden transaction, no recalculation of the
burden amount takes place.
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• Make the appropriate changes by either selecting another burden cost schedule or
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You can recalculate the raw cost of an expenditure item if you find that the raw cost amount is
incorrect. To produce correct recalculation results, you must correct the source of the problem
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before redistributing the item. For imported expenditure items, you can recalculate raw cost
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only if the Allow Adjustments transaction source option is enabled on the transaction source
that is associated with the expenditure item.
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Note: You can recalculate the raw cost of expenditure items imported as costed to generate a
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new debit account; however, the cost amount does not change.
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• Oracle Project Costing reprocesses the items with new rates and accounting rules the next
time that you run the costing programs.
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You can change the work type of an item. You can use this adjustment to reclassify an item for
reporting and billing purposes.
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Note: To change the work type, you must set the profile option PA: Require Work Type Entry
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Note: If you set the profile option PA: Transaction Billability Derived from Work Type to Yes,
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then changes to the work type can affect whether a transaction is billable and therefore follow
the same rules as changes to the billable status for an expenditure item.
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For imported expenditure items, you can change the work type if the Allow Adjustments
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transaction source option is enabled on the transaction source that is associated with the
expenditure item. If the Allow Adjustments transaction source option is not enabled, then you
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can change the work type only if the change does not affect the billable status or capitalizable
status of the expenditure item.
Change Comment
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Change Comment
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You can edit the expenditure comment of an item. You can use this adjustment to make the
expenditure comment clearer if you are including the comment on an invoice backup report.
35
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Split Item
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Split Item
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You can split an item into two items so that you can process the two resulting split items
differently. The resulting split items are charged to the same project and task as the original
35
item. When you split an expenditure item charged to a contract project, you can select whether
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each resulting split item is billable. When you split an expenditure item charged to a capital
project, you can select whether each resulting split item is capitalizable.
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For imported expenditure items, you can split an item into two items only if the Allow
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Adjustments transaction source option is enabled on the transaction source that is associated
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Transfer Item
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Transfer Item
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You can transfer an item from one project and task to another project and task.
• Oracle Project Costing provides security as to which employees can transfer items
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between projects. Cross-project users can transfer to all projects. Key members can
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transfer to projects to which they are assigned. Oracle Project Costing performs a standard
validation on all transferred items.
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• Oracle Project Costing also ensures that you only transfer items which pass the charge
controls of the project and task to which you are transferring. If the items you are
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transferring do not pass the new project and task's charge controls, then you cannot
transfer the item.
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• For imported expenditure items, you can transfer an item only if the Allow Adjustments
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transaction source option is enabled on the transaction source that is associated with the
expenditure item.
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You can change the functional or project currency attributes of multi-currency transactions.
When you select Change Functional Currency Attributes or Change Project Currency
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Attributes from the Reports menu, Oracle Project Costing displays a window where you can
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enter changes in the following fields: Rate Type, Rate Date, and Exchange Rate.
• The window displays the project or functional currency, depending on which currency you
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• You can also change currency attributes for expenditure items using the Mass
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Adjustments feature.
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• If the project currency and the functional currency for an expenditure item are the same,
then you can select only the Functional Currency Attributes option. Oracle Project Costing
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copies any changes you make to the functional currency attribute to the project currency
attributes.
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When you adjust multi-currency transactions, Oracle Project Costing must determine currency
attributes for the transactions that result. The following rules apply:
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• The original expenditure item is reversed, with all the same amounts and currency
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• The new expenditure items are created and treated as new transactions, following the
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• For a transfer, the reversing item has the same currency attributes as the original
transaction. For the new item, the cost distribution program uses the conversion rules for a
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new transaction, taking the default currency attributes from the destination project.
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You can make adjustments to supplier costs in Oracle Project Costing, Oracle Purchasing, and
Oracle Payables.
35
In Oracle Project Costing, you can make the following adjustments to supplier cost and
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Restrictions to Supplier Cost Adjustments
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Oracle Project Costing restricts the types of adjustments that you can make to supplier cost
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expenditure items in Oracle Project Costing. The restrictions apply to supplier costs interfaced
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to Oracle Project Costing from Oracle Purchasing and Oracle Payables, and to expense report
costs interfaced from Oracle Payables. For a discussion of these restrictions, see the lesson
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titled “Integration with Oracle Purchasing and Oracle Payables.”
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Mass Adjustments
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Mass Adjustments
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Use the Find Expenditure Items window or the Find Project Expenditure Items window to
process a mass adjustment of expenditures. The mass adjustment feature provides faster
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If you use the Find Project Expenditure Items window, you can mass adjust expenditure items
for a single project across operating units. The expenditure items that you adjust can cross
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operating units, but you must have security access to an operating unit to view and adjust those
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expenditure items. For example, a project has expenditure items associated with operating units
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A, B, C, and D. If your responsibility only gives you access to operating units B and C, then
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you can view and adjust only the expenditure items from operating units B and C.
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If you use the Find Expenditure Items window, you can mass adjust expenditure items across
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projects, within a single operating unit. If you have access to more than one operating unit,
then you must select the operating unit. If you have access to only one operating unit, then that
operating is the default value. Oracle Project Costing adjust only the expenditure items that
correspond to the current operating unit.
To perform mass adjustment of expenditures:
1. Navigate to the Find Project Expenditure Items or Find Expenditure Items window.
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6. Review the results. When you process adjustments online, Oracle Project Costing displays
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a message when the adjustment program is complete. If you process adjustments using a
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concurrent program, you can review the output report when the program is complete.
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• You can also select the Transfer adjustment action to change the project and task
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• For supplier cost expenditure items, you cannot correct the amount, expenditure type, or
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supplier in Oracle Project Costing. You must correct these attributes in the source
application: Oracle Payables or Oracle Purchasing. You can use the Review Transactions
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window to update the expenditure item date in Oracle Project Costing only if the date fails
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validation when you run the program PRC: Interface Supplier Costs.
• You must correct expenditure items imported from Oracle Inventory or Oracle
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Manufacturing in their respective systems except for the transactions with transaction
source Inventory Misc. You cannot reverse or correct expenditure items from these
applications in Oracle Project Costing.
To correct an approved expenditure item:
1. Create a new batch for the correction items.
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the Quantity field. Precede negative amounts with a minus (–) sign. If the All
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Negative Transactions Entered as Unmatched check box is not enabled, then Oracle
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Project Costing searches for a matching expenditure item and alerts you if it is unable
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to find a match.
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3. In the Reverse Expenditure Items window, specify the items that you want to reverse.
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4. Select the Reversal button.
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- Oracle Project Costing inserts a reversing (negative) expenditure item into the batch.
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5. Finish entering the batch and submit the batch as usual.
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- Expenditure batches can contain both positive and negative expenditure items.
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Processing Adjustments
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Processing Adjustments
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After you perform adjustment actions, run the appropriate programs to process the adjustments:
1. Distribute Costs - Run the appropriate cost distribution programs to process the
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adjustments. For example, if you adjust timecard expenditure items on a project that uses
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total burdened accounting, then you run PRC: Distribute Labor Costs and PRC: Distribute
Total Burdened Costs.
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2. Generate Accounting Events - Next, run PRC: Generate Cost Accounting Events to
derive the default credit accounts as needed and generate accounting events for the
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adjustments in Oracle Subledger Accounting. You can either run the program separately
for each type of cost (select appropriate process category) or once for all unprocessed cost
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3. Create Accounting - Finally, run PRC: Create Accounting to create subledger accounting
entries in Oracle Subledger Accounting for the accounting events. You can set the
Transfer to General Ledger parameter to Yes to enable the program to automatically
transfer the final accounting to Oracle General Ledger and run the Journal Import
program. If you choose to transfer to Oracle General Ledger, then you can also set the
parameter Post in General Ledger to Yes to enable the program to automatically post
PRC: Transfer Journal Entries to GL to transfer the final subledger journal entries from
Oracle Subledger Accounting to Oracle General Ledger. You can either run the programs
separately for each type of cost (select appropriate process category) or once for all
unprocessed cost distribution lines (leave the Process Category parameter blank).
Alternatively, you can also choose the Run Request button on the Expenditure Items window or
Project Expenditure Items window to initiate a streamline process. In addition, you can submit
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project and interface streamline processes from the Submit Request window.
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After you run the appropriate programs to recalculate the adjusted expenditure items, you can
review the results of the adjustments. When you process an adjustment, a cost adjustment
35
results if one or more of the following attributes is different from the original value:
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expenditure item, a transfer, or a split, the cost distribution programs use the same cost rate as
the original item to ensure that the cost nets to zero for the original and reversing item. The
program charges the reversing item to an account based on the original distribution line. The
program processes the new positive item resulting from a transfer just as a new expenditure
item is processed. To process new items for a split the same way that a new expenditure item is
processed, you must mark the item for recalculation.
When a cost distribution program encounters an item that requires a cost adjustment, the
program updates the expenditure item with the new raw and burden cost rates and amounts,
and creates new cost distribution lines. The program creates a reversing cost distribution line
and a new cost distribution line. These lines form the audit trail of cost adjustments.
As a result of adjustment processing, the following two different sets of account code
combinations exist:
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• The original cost account code combination and original cost clearing account code
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combination.
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• The adjustment cost account code combination and adjustment cost clearing account code
combination.
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Oracle Project Costing copies the account code combination IDs (CCIDs) from the original
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transaction to the reversing transaction and assigns the cost adjustment lines to the earliest
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open or future GL period. For additional information, see the Oracle Project Costing User
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Guide.
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Quiz
Answer: a
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Chapter 11 - Page 28
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Quiz
Answer: c
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Chapter 11 - Page 29
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Quiz
Answer: b
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a
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Chapter 11 - Page 30
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Quiz
Answer: a
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Chapter 11 - Page 31
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Agenda
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Chapter 11 - Page 32
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Oracle Project Costing provides an audit trail of all adjustments performed on an expenditure
item. The audit trail records the following information about the adjustment:
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• AUD: Project Expenditure Adjustment Activity - Use this report to review all
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department can submit this report regularly to audit the kinds of expenditure adjustments
being made for a project. For example, they can use this report to identify any expenditure
adjustments that are unauthorized or against company policy.
• AUD: Supplier Cost Audit Report - Use this report to audit transactions between Oracle
Project Costing, Oracle Purchasing, Oracle Payables, Oracle Subledger Accounting, and
Oracle General Ledger. This report lists all supplier cost transactions in Oracle Project
adjustment type to limit the transactions that you want to include in the report.
• MGT: Transfer Activity - Use this report to review the expenditure item transfers into
and out of a particular project. You can use this report as an audit tool to control project
costs by identifying incorrect or unauthorized transfers for a project. You can also use this
report to verify any expenditure item transfers that you perform. For each specified
project, this report shows you the expenditure items transferring into or out of the project
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and the transfer history of each of these expenditure items. For each expenditure item
listed, this report displays the item’s cost amount, its quantity, and either the destination
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project and task numbers or the originating project and task numbers, depending on the
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expenditure item’s transfer direction.
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Summary
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Chapter 11 - Page 35
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Pr
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Chapter 11 - Page 36
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