06

Performing Cost Processing

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Objectives
After completing this lesson, you should be able to do the
following:
Describe the costing flow in Oracle Project Costing
Explain what is occurring during cost processing
Explain how Oracle Project Costing derives accounting
dates

6-2

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Agenda

6-3

Costing Overview
Cost Distribution
Creating Accounting
Streamline Processes
Period Processing

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Overview of Costing
Oracle Project Costing
Import
unaccounted
transactions

Enter and approve

expenditures
Distribute costs
Derive default
accounting

Generate cost accounting events

Oracle Subledger Accounting

(see next page)

6-4

Copyright 2010, Oracle. All rights reserved.

Overview of Costing

Oracle
Subledger
Accounting

Subledger
Accounting Events

Create accounting for accounting

events

Subledger Journal
Entries
Transfer final accounting to Oracle
General Ledger
Oracle General Ledger
6-5

Copyright 2010, Oracle. All rights reserved.

(see next page)

Overview of Costing

Oracle
General
Ledger

General Ledger
Interface Tables
Import journal entries

General Ledger
Journal Entries

Post journal entries

6-6

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Costing Concepts
The following concepts are associated with costing:
Raw cost
Burden cost
Total burdened cost

Raw Cost + Burden Cost = Total Burdened Cost

6-7

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Overview of Encumbrance Accounting

Projects
Encumbrance
Commitment
Encumbrance
Obligation
Encumbrance
Invoice
Encumbrance

Example encumbrance sequence: Top-down budget

integration

6-8

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Actual

Quiz
Burden cost can be directly attributed to the work performed.
a. True
b. False

6-9

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Agenda

6 - 10

Costing Overview
Cost Distribution
Creating Accounting
Streamline Processes
Period Processing

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Costing Flow: Distribute Costs

Enter and approve expenditures

Import transactions

PRC: Distribute Labor Costs

PRC: Generate Cost Accounting Events
PRC: Create Accounting
PRC: Transfer Journal Entries to GL
(optional)
Journal Import
(Oracle General Ledger)
Example: Costing flow for uncosted and unaccounted
labor expenditures
6 - 11

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Cost Distribution Processing Flow

Distribute Costs
Calculate raw, burden, and
burdened cost
Create raw cost distribution lines
Determine default debit account

Create and Distribute Summarized

Burden Component Items
Optional
Create and distribute summarized
burden transactions
Create burden cost distribution
lines
Determine default debit account

6 - 12

Distribute Total Burdened

Costs
Optional
Create total burden cost
distribution lines
Determine default debit and
credit accounts

Copyright 2010, Oracle. All rights reserved.

Determining Costs

Labor Costs

Miscellaneous Costs

Hours x Cost Rate = Raw Cost

Raw Cost = Quantity x Cost Rate

For example, the type of

expenditure and the unit of
measure affects how Oracle
Project Costing calculates raw
cost.

6 - 13

When unit of measure is other

than Currency
Raw Cost = Quantity
When unit of measure is
Currency

Copyright 2010, Oracle. All rights reserved.

Quiz
Which of the following programs would you run to determine
costs for labor transactions?
a. PRC: Distribute Labor Costs
b. PRC: Distribute Usage and Miscellaneous Costs
c. PRC: Distribute Labor Costs for a Range of Projects
d. PRC: Distribute Supplier Cost Adjustments

6 - 14

Copyright 2010, Oracle. All rights reserved.

Burden Cost Calculations

Quantity x Cost Rate = Raw Cost

Raw Cost x Burden Multiplier = Burden Cost

Raw Cost + Burden Cost = Total Burdened Cost

6 - 15

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AutoAccounting: Distribution Programs

Cost Distribution Line

Debit

Company

Department

Account

Product

01

420

7580

000

Credit

For example, the program PRC: Distribute Labor Costs

determines the default debit account for labor cost
distribution lines.

6 - 16

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Cost Distribution Concurrent Programs

Distribution Concurrent Programs
PRC: Create and Distribute Burden Transactions
PRC: Distribute Borrowed and Lent Amounts
PRC: Distribute Expense Report Adjustments
PRC: Distribute Labor Costs for a Range of Projects
PRC: Distribute Labor Costs
PRC: Distribute Supplier Cost Adjustments
PRC: Distribute Supplier Cost Adjustments for a Range of Projects
PRC: Distribute Total Burdened Costs
PRC: Distribute Usage and Miscellaneous Costs

Oracle Project Costing provides a set of concurrent

programs for you to use to distribute your costs.

6 - 17

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Agenda

6 - 18

Costing Overview
Cost Distribution
Creating Accounting
Streamline Processes
Period Processing

Copyright 2010, Oracle. All rights reserved.

Costing Flow: Create Accounting

Enter and approve expenditures

Import transactions

PRC: Distribute Labor Costs

PRC: Generate Cost Accounting Events
PRC: Create Accounting
PRC: Transfer Journal Entries to GL
(optional)
Journal Import
(Oracle General Ledger)
Example: Costing flow for uncosted and unaccounted
labor expenditures
6 - 19

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Integration with Oracle Subledger Accounting

Oracle Project
Costing

Oracle Subledger
Accounting

Generate accounting
events and create
accounting

Oracle General
Ledger
Transfer journal
entries to GL

Oracle Project Costing predefines setup for Oracle Subledger

Accounting so that Oracle Subledger Accounting accepts the default
accounting information from Oracle Project Costing without change.

6 - 20

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Generating Cost Accounting Events

Process Categories for Costs
Burden Cost
Labor Cost
Inventory Cost
Miscellaneous Cost
Supplier Cost
Total Burdened Cost
Usage Cost
Work in Process Cost
When you submit the concurrent program PRC: Generate Cost
Accounting Events, you can specify a process category, or leave the
parameter blank to process all costs.
6 - 21

Copyright 2010, Oracle. All rights reserved.

AutoAccounting: Generate Accounting Events

Cost Distribution Line

Company

Department

Account

Product

Debit

01

420

7580

000

Credit

01

000

2410

000

The generate cost accounting events program uses

AutoAccounting to determine the default credit account
for cost distribution lines.

6 - 22

Copyright 2010, Oracle. All rights reserved.

Creating and Transferring Accounting

Generate cost accounting events

Subledger
Accounting Events
Create accounting for accounting events

Subledger Journal
Entries
Transfer final accounting to Oracle General Ledger
You run programs in Oracle Project Costing to create accounting
in Oracle Subledger Accounting and to transfer the final
accounting to Oracle General Ledger.
6 - 23

Copyright 2010, Oracle. All rights reserved.

Oracle General Ledger Journal Import

Transfer final accounting to Oracle General Ledger

General Ledger
Interface Tables
Import journal entries

General Ledger
Journal Entries
Post journal entries
After you transfer accounting to Oracle General Ledger,
you import and post the journal entries.

6 - 24

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Quiz
Which of the following programs would you run to collect cost
distribution lines in Oracle Project Costing ?
a. PRC: Generate Revenue Accounting Events
b. PRC: Create Accounting
c. PRC: Generate Cost Accounting Events
d. PRC: Distribute Total Burdened Cost

6 - 25

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Agenda

6 - 26

Costing Overview
Cost Distribution
Creating Accounting
Streamline Processes
Period Processing

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Streamline Processes
Streamline Option:
UA: Usage/SI Adjustments Cost

Streamline Option:
DXU: Distribute and Interface
Usage Costs to GL

PRC: Distribute
Usages and
Miscellaneous Costs

PRC: Distribute
Usages and
Miscellaneous Costs
PRC: Generate Cost
Accounting Events*

PRC: Distribute
Supplier Cost
Adjustments

PRC: Create
Accounting*
*Process Category = Usage Cost

Example project streamline

process option

6 - 27

Example interface streamline

process option

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Submitting Streamline Processes

Select the
process

Select the
interval

Select the
time

Optionally, schedule streamline processes to run

automatically. For example, run costing programs nightly.

6 - 28

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Agenda

6 - 29

Costing Overview
Cost Distribution
Creating Accounting
Streamline Processes
Period Processing

Copyright 2010, Oracle. All rights reserved.

Overview of Period Processing

GL Periods
Period Type: Monthly
JAN-10

FEB-10
Time

PA Periods
Period Type: Weekly

For example, your PA periods may be shorter than

your GL periods.

6 - 30

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Control of GL Period Statuses for Project

Transactions
Oracle Project
Costing
PA Periods (monthly)
JUN-10

Closed

JUL-10

Open

Oracle General
Ledger
GL Periods
JUN-10

Open

JUL-10

Future

GL Periods for project

transactions
JUN-10

Closed

JUL-10

Open

Control the status of GL Periods for project transactions in

Oracle Project Costing.
6 - 31

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Transaction Accounting Methods

You can use one of the following methods to maintain

accounting periods and derive accounting dates in Oracle
Project Costing:
Period-End Date Accounting
Expenditure Item Date Accounting
Expenditure Item Date Accounting with Common
Accounting Periods

6 - 32

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Period End Date Accounting

Transaction

Period Date Range and Status

SEP-10 = 01-SEP-10 to 30-SEP-10 Expenditure item date = 08-SEP-2010

1. Derive
GL date

PA period
SEP-10 = Open
GL period (In Oracle GL)
SEP-10 = Open

PA period = SEP-10
PA date = 30-SEP-2010
2. Derive GL date
from PA date
GL period = SEP-10
GL date = 30-SEP-2010

6 - 33

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Expenditure Item Date Accounting

Period Date Range and Status

SEP-10 = 01-SEP-10 - 30-SEP-10

PA period
SEP-10 = Open

GL period for
project transactions

GL period
(In Oracle GL)

SEP-10 = Open

SEP-10 = Open

Transaction
Derive PA
Date

Expenditure item date = 08-SEP-2010

Derive GL
Date

PA period = SEP-10

GL period = SEP-10

PA date = 08-SEP-2010

GL date = 08-SEP-2010

6 - 34

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Expenditure Item Date Accounting with Common

Accounting Periods
Note: The GL period SEP-10 is closed for project transactions
Period Date Range and Status
SEP-10 = 01-SEP-10 to 30-SEP-10
OCT-10 = 01-OCT-10 to 31-OCT-10

GL period for project

transactions & PA Period
SEP-10 = Closed
OCT-10 = Open
GL Period (In Oracle GL)
SEP-10 = Open
OCT-10 = Future

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Transaction
Expenditure item date = 08-SEP2010
1. Derive GL date
GL period = OCT-10
GL date = 01-OCT-2010
2. Copy PA date
from GL date
PA period = OCT-10
PA date = 01-OCT-2010

Copyright 2010, Oracle. All rights reserved.

Sweeping Transaction Accounting Events

Sweep

SEP-10

OCT-10

During period-end closing, you can run the program PRC:

Sweep Transaction Accounting Events to move unaccounted
accounting events to the next open GL period.

6 - 36

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Quiz
With expenditure item date accounting, you maintain both PA
periods and GL period statuses for project transactions in
Oracle Project Costing.
a. True
b. False

6 - 37

Copyright 2010, Oracle. All rights reserved.

Summary

In this lesson, you should have learned how to:

Explain the steps to process costs in Oracle Project
Costing
Run costing programs
Describe the logic for how Oracle Project Costing derives
accounting dates

6 - 38

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