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This section includes the following items:Purpose of capital projectsConstruction in ProcessAccounting flowOracle systems integrationCapitalizing project costsFunctional overview of capital projects Capital ProjectsBuilding an asset is different from simply purchasing an asset such as a computer for use. In a capital project, the company is building an asset, such as an employee parking lot.Creating Purchase Orders for Capital ProjectsWhen you create a purchase order for a capital project in Oracle Purchasing, you can enter a project, task number, and expenditure type for each project-related distribution line. You match this purchase order to an invoice in Oracle Payables, and then send the appropriate lines to Oracle Projects.You can use the asset category to assign an inventory items cost on a purchase order to an asset on a capital project in Oracle Projects. After you match the purchase order to an invoice, and interface the invoice from Oracle Payables, Oracle Projects assigns the inventory items cost to an asset on the project that has the same asset category as the inventory item.If you assign purchase order distribution lines to asset clearing accounts instead of projects, Oracle Payables matches the purchase order to an invoice and sends the lines to Oracle Assets using the Mass Additions interface.Collecting CostsYou enter labor, expense reports, asset usage, and miscellaneous transactions for your capital projects in Oracle Projects. The distribute costs processes charge the capital project costs to a CIP account in Oracle General Ledger. Oracle Projects is the subsidiary ledger for your CIP accounts in General Ledger. You can review the details for your CIP accounts by querying your capital projects in Oracle Projects.Specifying Capitalized CostsYou must specify whether to capitalize or expense each transaction charged to a capital project. The capitalizable classification is similar to the billable classification for transactions charged to a contract project. The tasks and transaction controls you define determine the default value for this classification.Transaction Controls(N) Project> (B) Open (B) Detail

To specify the level at which a transaction can be capitalized:1Decide at which level you want to specify whether a transaction can be capitalized.2Navigate to the appropriate window.3Select the capitalizable check box for the task control level you want.4Save your work.Transaction Controls(N) Project> (B) Open

Defining Capital ProjectsCapital projects are set up using the same options as indirect projects. Capital projects use an additional option called Asset Information that contains the following choices:Assets - Used to define fixed assets for interfacing with Oracle AssetsAssets are defined at the project level only.A project can have many assets.Each asset can be assigned to only one project.Asset Assignments - Defines how expenditures will be assigned to assets.Grouping Level Types(N) Project> (B) Open (B) Detail

Asset DefinitionTo create a CIP asset you must at least enter the Asset Name and Description.

Asset Category and Asset KeyThe asset category determines the default asset cost account and depreciation rules for the asset after you send the asset to Oracle Assets. Asset categories are defined in Oracle Assets.The asset key allows you to group assets or identify groups of assets. It does not have any financial impact; rather, you can use it to track a group of assets independently of the asset category. The asset key can be defined directly in Oracle Projects.Defining Multiple AssetsYou can create multiple assets for one project. However, assets cannot be created for multiple projects.

Grouping Level Types(N) Capital Projects

Reviewing Total CostsReview total costs accrued on capital projects in the Capital Projects window. The non-capitalized expenses are displayed in the Expensed column, non-interfaced CIP costs in the CIP column, and capitalized costs (interfaced) in the Capitalized column. The Interface to Oracle Assets process creates capitalized amounts.Capitalizing CIP AssetsIf your project has more than one CIP asset, you can place each asset in service as it is completed. You do not have to complete the entire project to place an asset in service.Grouping Level Types(N) Capital Projects (B) Assets

Actual Date in ServiceOracle Projects begins the capitalization process of CIP assets when the actual date in service is entered in the Actual field. The Actual date:Can be entered before the project is complete.Can be a past date. Oracle Assets calculates and records depreciation properly.Must be in or before the current Oracle Assets period.Can be entered before the asset is 100 percent complete. You can continue to have costs for an asset after it is placed in service. However, you must manually handle depreciation.Grouping Level Types(N) Capital Projects (B) Assets (B) Asset Lines

How to Generate Asset LinesAfter you enter the actual date in service, you can generate asset lines for review and final adjustment before you interface them to Oracle Assets. To be included in the asset lines, costs must be distributed, but they do not have to be interfaced to Oracle General Ledger.Asset lines can be generated using one of the following methods:Capital Projects windowPRC: Generate Asset Lines for a Single ProjectPRC: Generate Asset Lines for a Range of ProjectsOracle Projects creates asset lines and assigns the lines to the appropriate asset or labels them as unassigned. If the asset is assigned, the Asset Name field will be populated. The Asset Category is only populated if you are using PO-Matched supplier invoice categories.Interfacing Asset LinesRun the Interface Assets process to send valid asset lines to Oracle Assets to become fixed assets. The process creates one mass addition line for each asset line in Oracle Projects. In Oracle Assets you can query and review assets by project number and task number in the Financial Inquiry window.How to Run the Interface Assets Process1.Enter the project or a range of projects.2.Enter the In Service Date up to which you want to process capitalized costs.3.Choose Submit to run the Interface Assets process.4.Review the mass addition lines in the Oracle Assets Prepare Mass Additions window.