Project Accounting—Periodical Capitalization

Basic Data Setup

Purpose: The purpose of this exercise is to setup basic data required to run projects with periodical capitalization.

Project Code Part

Purpose: The purpose of this exercise is to show you how to set up a project code part for your company.

Windows:
Define Code String

1. Open the Define Code String window and enter the code part Project.
2. If IFS/General Ledger is installed, in the Code Part Function field select Project Accounting from the list.
3. In the Logical Code Part field select Project from the list.
4. Set the code part Account (code part A) as the base for project cost/revenue elements.
5. Save your changes.

General exercise for Chart of Accounts

Posting controls for periodical capitalization

Purpose: Purpose of this exercise is to set up additional posting controls required for periodical capitalization. Capitalization counter postings explained below, will define the accounts used for reversing the original cost/revenue when creating periodical capitalization entries.

Windows:
Posting Control

1. Open the Posting Control window.
2. Verify that posting controls for periodical capitalization counter postings(GP16 and GP17) exist, and that the defined accounts are the correct ones.
3. If the postings does not exist, add them as below

Note: Selecting control type AC10 will post the capitalization counter postings to the original account. If required, you can select a control type other than AC10 and direct the counter posting to specific accounts.

4. Save the posting lines.

Voucher Type for function group PPC (Periodical Project Capitalization)

Purpose: Purpose of this exercise is to view the voucher type used for periodical capitalization.

Windows:
Voucher Type

1. Open the Voucher Type window.

2. Find Voucher Type PPC.

3. Validate that ledger selection is set to GL, affect IL.

Periodical Capitalization Information

Purpose: Purpose of this exercise is to execute periodical capitalization.

Windows:
Periodical Capitalization Information

1. Open the Periodical Capitalization Information window. The window is automatically populated when it is opened.
2. Select whether Periodical Capitalization should be performed only for ordinary periods or for both ordinary and year end periods.
3. Select the user group allowed to create periodical capitalization vouchers for the ordinary periods by using the List of Values.
4. If Ordinary/Year Closing is selected for periodical capitalization period type, select the user group allowed to create periodical capitalization vouchers for year end periods by using the List of Values.
5. Select the default voucher type for All Ledgers by using the List of Values, where all the voucher types connected to the function group PPC with ledger selection GL, Affect IL and GL Only are displayed.
6. Save the changes.

Main Exercises

Create Project Group

Purpose: Explain the process of defining a Project Group setup for using periodical capitalization

Windows:
Project Groups

1. Open the Project Groups window.
2. Create a new record and enter Project Group and Description.
3. Set Capitalization Posting Method to Periodical.
4. Leave the flag Separate GL/IL Rules unselected.
5. Save your changes.
6. In the All Ledgers tab, create a new record in the Project Information sub tab.
7. Select project type Capitalize Rev/EXP from the list.
8. Save your changes.
9. Activate the project group by right-clicking in the header and selecting Activate.

Projects created using this project group will now inherit the capitalization posting method Periodical.

Create Project

Purpose: Purpose of this exercise is to explain the process of creating a project that uses periodical capitalization.

Windows:
Projects

1. Open the Projects window.
2. Create a new record and enter a Project ID and Description.
3. Select the project project group you created in the above exercise from the list of values.
4. Make sure your Capitalization Posting Method is set to Periodical.
5. Save your changes.
6. In the All Ledgers tab, select Project Information sub tab.
7. Verify the information for the new project. Make sure Project Type is set to Capitalize Rev/Exp.
8. Save your changes.

Enter Vouchers

Purpose: Purpose of this exercise is to report cost and revenues against the project you created above.

Windows:
Voucher Entry

1. Create a new voucher and report costs and revenues to the project created above

General exercise for voucher entry Voucher Entry

Update Voucher

Purpose: The purpose of this lesson is to show you how to update one of the previously created vouchers that are stored in the Hold Table.

Windows:
Voucher Entry

1. Query for the voucher that you previously created.
2. Make sure that the voucher is in the Approved status.
3. Right-click anywhere in the voucher header, and then click Instant Update General Ledger.

Note: The updated window now shows all vouchers that are stored in the Hold Table.

4. Select your voucher, if it is not already selected, and click OK.

Note: The general ledger is now updated with your voucher.

View vouchers updated to General Ledger

Purpose: Purpose of this exercise is to view and confirm that capitalization postings are not created when a cost/revenue voucher rows are update to GL if the project is set to periodical capitalization

Windows:
GL Voucher Details Analysis
 

1. Open the GL Voucher Details Analysis window.
2. Query for your voucher created above.
3. Make sure that there are no additional postings for GP3 and GP4 are created during the voucher update.

Execute Periodical Capitalization

Purpose: Purpose of this exercise is to explain the process of executing periodical capitalization. Periodical capitalization is a period end activity and all vouchers for the selected period must be updated to ledgers before executing this process

Windows:
Periodical Capitalization and Revenue Recognition

1. Open the Periodical Capitalization and Revenue Recognition window.
2. Enter the accounting year and period. A new procedure can be defined for an interval of periods, i.e., you can define a procedure for each quarter by using the Until Accounting Period field. It is however required to cover an entire accounting year before you can define a procedure for the next accounting year.
3. Enter the Ledger Type All Ledgers.  This is the only ledger setting you can use if company does not have projects set up to use Separate GL/IL Rules.
4. Save the entries. Notes can be entered for each row
5. Make sure there are no un updated vouchers in hold table for this project.
6. Select the periodical capitalization and revenue recognition process  right-click and then click Run Periodical Capitalization.

Process will generate a voucher of function group PPC, creating capitalization entries for all projects that qualify for periodical capitalization in this period. If there are not projects that require periodical capitalization, process will be marked as an Empty Capitalization. Status of the procedure will be changed to Capitalized.

7. Highlight the process and right-click and select View Voucher. Observe the capitalization postings created for your project.
8. Right-click and select Update Ledger.

Rollback Periodical Capitalization

Purpose: Purpose of this exercise is to explain the process of rolling back periodical capitalization.

Windows:
Periodical Capitalization and Revenue Recognition

1. Open the Periodical Capitalization and Revenue Recognition window.
2. Select the procedure that requires roll back. Rollback option will only be available for procedures in status Capitalized.
3. Right-click and select Rollback Periodical Capitalization.

This will roll back the original periodical capitalization by creating a reversal voucher. The status of the procedure will be changed to Defined. In case of Empty Capitalization, procedure status will be set to Defined without creating reversal voucher.