IBM

Title

Maximo Asset Management Functionality Overview Document

Rotating Asset Accounting

K. Buonagurio May 8, 2012 6.x, 7.x

Author : Date : Applicable versions :

Background
The rotating asset functionality within MAXIMO can be complex to understand on a functional level. When properly implemented, this solution gives the user a robust and powerful platform from which to manage their equipment assets while maintaining inventory costs and methodologies for their management. When implementing rotating assets, one area that is important to understand is the accounting side. This document is not designed to educate the user how to create and use rotating assets, as this is explained indepth in other MAXIMO documents and training materials. This document is designed to illustrate and explain the accounting operation of Rotating Asset by giving scenario examples and demonstrating what GL transactions are written and their expected outcome. The scenarios below deal with the inventory functionality of Rotating Asset. It is important to note that Rotating Asset are considered both equipment assets and Inventory items. For this reason it is important for the user to not confuse an equipment assets value from its inventory value. This document is best utilized by someone who possesses a base-knowledge of using MAXIMO rotating asset.

Accounting Scenarios
Purchase Rotating Item for receipt into storeroom (non-Direct Issue) Purchase Order
Debit GL Storeroom Control Account Credit GL RBNI Account

Receipt
Write MATRECTRANS record Material Receipt Transaction Credits the RBNI Account Debits the Storeroom Control Account

Write EQTRANS record Asset Move Transaction Records asset move into storeroom.

Inventory Update Average Cost*

File: rotating asset accounting.doc

Page 1 of 4

Saved: 5/8/2012

10:09:00 AM

IBM

Maximo Asset Management Functionality Overview Document

Work Order GL Functionality

Work Order written against Rotating Asset. Charge To Store Flag = Y Use this flag to indicate that the costs for the work order should be charged back to the inventory cost for the rotating asset record. Work Order GL Account = Global Rotating Suspense Account All costs associated with the Work Order will be charged to the Global Rotating Suspense Account. These costs are viewable from the assets application, the Inventory Cost field. The amount in this field will increase as costs are charged to this asset prior to its being moved back into a storeroom. At the time this asset record is moved back into the storeroom, this value will be factored into the average cost for the inventory item and the amount in the Rotating Suspense Account will be debited to the Control Account for the storeroom.

Charge To Store Flag = N Use this flag to charge the cost of the work order to a GL account other then the rotating suspense account. Work Order GL Account = Location, GL, etc

Issue a Rotating Asset to a Work Order

An Issue is performed to record a usage of an inventory item by a GL entity (Location, Asset, GL, etc) From an inventory perspective, when an item is issued out, the full value of that item is consumed by the issue-to GL entity. When a rotating asset record is issued from a storeroom, any value in the Inventory Cost of the asset record is set to zero. Write MATUSETRANS record Material Use Transaction ISSUETYPE = ISSUE Transfer value is determined as Issue Cost or Asset Cost depending on the configuration in multisite options. Credits the Storeroom Control Account (Using a positive linecost) Debits the Work Order GL Account

File: rotating asset accounting.doc

Page 2 of 4

Saved: 5/8/2012

10:09:00 AM

IBM

Maximo Asset Management Functionality Overview Document

Transfer Rotating Assets

Transfer rotating asset from one storeroom to another. Write MATRECTRANS record Transtype of TRANSFER Transfer value is determined as Issue Cost or Asset Cost depending on the configuration in multisite options. Credits the Control Account of the From Storeroom Debits the Control Account of the To Storeroom

Return a rotating asset from a work order

A return transaction is performed to record an inventory item being returned to a storeroom. If an issue transaction is considered a consumption transaction for usage, then the return is the inverse of the issue transaction and is performed against a corresponding issue transaction to reverse it. Write a MATUSETRANS record Transtype of RETURN Return value is determined as the issued cost of the original issue transaction. Credits the Storeroom Control Account (Using a negative linecost) Debits the Work Order GL Account

Move a rotating asset from an operating location to a storeroom location

A move asset transaction is used to record rotating asset being moved from one location to another. A common use is to move a rotating asset from an operation location to a storeroom. The use case is generally that a rotating asset had been used on a work order and now the work order is satisfied, and therefore the asset is no longer necessarily at the operating location. The user would move this asset back to the storeroom so that it can be issued again in the future. Write EQTRANS record -Asset Move Transaction Records asset move into storeroom Credits the Global Rotating Suspense Account Debits the Storeroom Control Account

Write MATRECTRANS record Material Receipt Transaction Credits the Global Rotating Suspense Account Debits the Storeroom Control Account

Inventory Update Average Cost*

File: rotating asset accounting.doc

Page 3 of 4

Saved: 5/8/2012

10:09:00 AM

IBM

Maximo Asset Management Functionality Overview Document

Return vs. Move Asset When to use which

There is a common misconception in MAXIMO on when to use the return item transaction or a move asset transaction. The return transaction should be used when an item has been consumed by a GL entity, but for one reason or another, the item was not necessary and therefore needs to be returned to the storeroom at its full issued value. Again, a return is to negate an issue transaction. The move asset functionality should be used in the case where the user wishes to capture the fact that an asset has moved from one location to another. This means a transfer of value. In the case of a traditional equipment asset, the value of the asset literally moves from the GL of one location to the GL of another. In the case of rotating assets this still holds true, however the inventory costs associated with that asset are also tracked within the Rotating Suspense account. At the time the rotating asset is moved into an inventory location, any transactions that were written to the Rotating Suspense account will then be transferred to the storerooms control account. Additionally, MAXIMO will adjust the average cost

* The Inventory Average Cost Calculation is described below.

Receipt Purchasing Process (Old Balance * Old Average Cost) + (Receipt Qty * Receipt Cost) (Old Balance + Receipt Qty) Receipt Move Rotating Asset into storeroom (Old Balance * Old Average Cost) + (Move Qty * Inventory Cost) (Old Balance + Move Qty)

File: rotating asset accounting.doc

Page 4 of 4

Saved: 5/8/2012

10:09:00 AM