Transactions in Investment project accounting in Microsoft Dynamics 365 Finance and Operations

Transactions in Investment project accounting in Microsoft Dynamics 365 Finance and Operations

Investment project accounting in Microsoft Dynamics 365 Finance and Operations One version - part II

In our previous blog, we covered key setup's and configuration for two types of investment project

This blog, we would focus on information flow to post various transactions on investment project and later eliminate to acquire a fixed asset.

Let us post some transactions e.g. hours being posted on the project.

Note: With investment project where Cost is directly posted to P&L, D365FO would debit your account (typically P&L) with posting type as project cost.

When using WIP approach then cost is posted to balance sheet as shown below

If you need to record other project transactions e.g. vendor invoice for capturing expenses on project then the below vendor invoice journal could be used by having project specified as offset.

Next we would run estimation process on investment project to ensure cost capitalization when using cost directly to P&L and also for elimination.

Let us run an estimation which spans all of the project transactions.

Note information in key tabs (Profit and loss, WIP and consumption)

For cost posting directly to P&L

For cost posting to WIP

Before posting the estimate, ensure the elimination options are specified as shown below.

We are eliminating to a fixed asset (scenarios where cost is collected over time to make an asset e.g. building, machinery, etc.)

Note: Posting of estimate does not acquire FA

We would now post the estimate and review voucher entries generated.

• Voucher would be blank if cost was directly posted to P&L and line property does not allow for cost capitalization in WIP setting then the FA would be acquired at 0 value
  • You would need adjust project transactions in this case to update line property.
• Voucher would contain values when posting to P&L and using line property with cost capitalization
• Also Voucher would contain values in WIP option as shown below

Tip*: Always use a line property which allows cost capitalization with investment project.

Lastly we would eliminate the posted estimate upon completion of all project activities.

Note: To eliminate a project, it must be 100 percent complete.

The estimate elimination process essentially creates the fixed asset acquisition as shown below.