You can account for individual burden cost components when you want to track the burdening in Oracle Subledger Accounting and Oracle General Ledger.
The following two tables provide an example of the accounting for the expenditure items shown in the example data for the topic: Storing Burden Costs as a Separate Expenditure Item on the Same Project. The following table shows the accounting for the raw cost amounts.
| Transaction | Item | Accounting Transactions | Debit | Credit |
|---|---|---|---|---|
| Labor Cost | 1 | Labor Expense | 100 | |
| Payroll Clearing | 100 | |||
| Labor Cost | 2 | Labor Expense | 200 | |
| Payroll Clearing | 200 | |||
| Expense | 3 | Computer Rental Expense | 500 | |
| Payables Liability | 500 |
The following table shows the accounting for the burden cost amounts.
| Transaction | Item | Accounting Transactions | Debit | Credit |
|---|---|---|---|---|
| Fringe | 4 | Project Fringe Expense | 120 | |
| Fringe Absorption/Recovery | 120 | |||
| Overhead | 5 | Project Overhead Expense | 300 | |
| Overhead Absorption/Recovery | 300 | |||
| General and Administrative | 6 | Project General and Administrative Expense | 180 | |
| General and Administrative Absorption/Recovery | 180 |
To set up accounting for burden costs by burden cost component you must perform the following steps:
Define AutoAccounting rules for the Burden Transaction Debit (Burden Cost Account) and Burden Transaction Credit (Burden Cost Clearing Account) AutoAccounting functions. Oracle Projects uses these rules to determine the default debit and credit GL accounts. You use the expenditure type parameter to distinguish between different types of burden cost components. You must also define the AutoAccounting function Burden Cost Revenue Account to account for revenue.
If you have chosen to store burden costs as a summarized value on a separate project and task, then you must perform the following additional steps:
Define a project and appropriate tasks, which will be used as a storing bucket for summarized, burden transactions used for accounting for the individual burden costs. You typically would not do project reporting from these collection projects. However, you may choose to perform some analysis for burden absorption using these projects. After you transfer the burden cost accounting from Oracle Subledger Accounting to Oracle General Ledger, you can perform additional analysis within Oracle General Ledger.
Specify the above project and task on the project type. This project and task are used for collecting the summarized burden transactions that are used only for the burden accounting.
To process the accounting for the burden transactions, you run the following processes:
PRC: Create and Distribute Burden Transactions. This process summarizes the burden costs, creates the expenditure items for the burden transactions, and runs the distribution process. The burden transactions are created on different projects depending on the method you use to store burden costs. If you store burden costs as separate, summarized burden transactions, then the burden transactions are created on the same project that incurred the costs. If you choose to store burden costs as a value along with raw cost on the expenditure item on the project that incurred the transactions, then the burden transactions are created on the collection project and task used for collecting burden transactions intended for accounting by burden cost components only.
PRC: Generate Cost Accounting Events. This process generates accounting events for burden transactions. If you select Burden Cost for the Process Category parameter, then the process generates accounting events only for burden costs.
PRC: Create Accounting. This process creates draft or final accounting entries in Oracle Subledger Accounting for the accounting events. When you run the process in final mode, you can optionally choose to automatically transfer the final accounting to Oracle General Ledger, initiate the journal import process, and post the journal entries in Oracle General Ledger. If you select Burden Cost for the Process Category parameter, then the process creates accounting only for burden cost accounting events.
You can also use the streamline processes to create distribution lines for burdened costs.
Other Sources
Accounting for Costs, Oracle Projects Implementation Guide