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We have a need to release project costs to the same Fixed Asset on a monthly basis.
A suggested solution was to: On a monthly basis, could move the Project WIP into Fixed Asset at the end of the month. And reverse the elimination with a date at the beginning of the next month. As the month progresses, accumulate more costs and then upon month end, repeat the elimination and again reverse at the beginning of subsequent month.
Tested this out and month 1 was fine, could enter timesheets against the investment project, estimate the project cost and eliminate to a new asset. and also ran depreciation.
Then at start of month 2, reversed the elimination, posted more timesheets against the investment project, and posted estimate project cost.
However, when in month 2
Is there any way of releasing project costs to the same Fixed Asset on a monthly basis?
Why you have to shift the costs on a monthly basis to fixed assets?
Is the asset really completed, ready for use and depreciation?
Rather than doing the elimination - reversal - elimination ... process on a monthly basis for a single 'large' project can't you create monthly subprojects that you eliminate on a monthly basis? This should make things much easier as you have to eliminate each subproject only once and have a better control over the costs on a monthly basis.
Thanks Ludwig for your quick response.
From what I can gather from the finance team, there are two way they're doing this at the moment. For some, they are being done on a 3-6 month duration based on releases. For others, they are being done monthly.
For those monthly ones, we are trying to work out the amount of effort required doing it via a 'large' project (which has the benefit of not having to set up multiple projects, multiple WBS, and end users don't have to familiarise themselves with different project codes), vs monthly subprojects.
I managed to get around the "Acquisition for fixed asset BAST-0204, book C_SLSL, already exists." error by changing the Allow multiple acquisitions setting to yes in the Fixed asset parameters. However, when I was checking the generated depreciation journal, it was doing a straight line calc (which is what we want) but using the total combined acquisition costs as if that total amount was there from the first acquisition date. I'm going to check with finance exactly how they do this at the moment (I'm suspecting manually).
Does this mean that if each of the monthly releases need to be managed with their own commencement dates for depreciation & service life, we'd need to eliminate from the project into individual assets? Which then means we should be doing monthly sub projects into individual assets? Is the best way to link/join those assets up using the Main fixed asset?
Good Morning Cat@Citadel,
About the depreciation amount:
Can you check what method is selected in your depreciation profile (straight line or straight line remaining).
I would expect that you have the latter one setup.
Another more general question:
Why is it that your accountants want to have a monthly transfer and depreciation of a partly finished fixed asset?
What kind of fixed asset is that?
Do your accounting rules allow starting the depreciation of a 'half finished' fixed asset?
Just wondering why the accounting team has this need.
Thank you. I really do appreciate your quick responses.
Depreciation is using straight line service life
It's for developed software, so whilst part of larger software suites, there are functions released all the time, hence the need to push through to a fixed asset monthly. The accountants assured me it's OK to do.
Theses the vouchers for the 2 months I was testing with. Timesheets come via intercompany from the CGSA company to the project (and Fixed Asset) in the BAST company.
I'm thinking that maybe we could swap the sequence of posting for month 2, by doing the depreciation journal first, and then do the reverse eliminate and new elimination.. this might fix the depreciation journal. But the service life doesn't get tracked for months subsequent to month 1, so there'd still be a problem, especially as we increasing get further away from the Placed in service date.
Is our only option to really just do sub projects (one per month) and release to individual assets each time? We'd end up having hundreds of small assets... is the way to link these via Main fixed asset? From what I understand, we'd still need to depreciate each asset individually.
About the depreciation issue: Can you test in a different demo/test system whether the 'straight line life remaining' method fixes the problem? I would expect that.
About your subprojects: Personally, I would prefer having multiple smaller fixed assets that you can activate to the same fixed asset on a monthly basis as long as you have the allow multiple acquisitions parameter active. I think that should be possible. Please also test this in a demo environment first whether this is good for you from a 'handling' perspective.
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We ended up changing the process. The monthly ones will be switched to quarterly. So we'll create an asset each quarter.
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