Professional Documents
Culture Documents
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Module topics
Compass Project Accounting overview Periodic Accounting Proportional Performance Accounting Completed Performance Accounting Amortization Accounting Final accounting considerations Labor expenses Project Accounting and conclusion
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Amortization
Amortization allows for the collecting of transition and startup costs onto the Balance Sheet Startup costs are then released over time (amortized) to the P&L as an expense The Accounting and Financial Manual (AFM) guideline on this subject can be found in topic 7015: http://ent121.sharepoint.hp.com/teams/AFM%20Topics/default.aspx
Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Restricted.
Amortization process
Defer actual expenses to the Balance Sheet HP accounting rule Costs incurred during the Transition phase of a project are not recognized until Ongoing Delivery begins
Deferred expenses are posted to either long-term or short-term amortized expense account Amortized expenses are divided evenly over the life of the Ongoing Delivery once delivery begins
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Compass amortization
RA key
PS-DNA
Key features
Automates deferral of expenses to long-term/short-term deferred accounts (19140100, 15120100) Correctly defers and amortizes expenses incurred after amortization has started Uses the historical accounting rate
Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Restricted.
Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Restricted.
Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Restricted.
PS-NRA
Post costs and perform amortization accounting at the lowest level
PS-DNA
PS-DNA
PS-DNA
Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Restricted.
PS-NRA
Labor costs must not be posted to a lower level element with PS-DNA as parent
PS-DNA
PS-DNA
PS-DNA
Labor costs
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PS-NRA
PS-DNA
OPEN
Requires separate WBS element for CAN budget with CAN-specific user status settings Status codes CANS, CSSP, CCLS cannot be used on PSDNA element
PS-NRA CANS
NOTE: CAN process is covered in detail in the Acquisitions lesson to follow later in the course.
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GL accounts
One RA account: 33450000WIP Adjustments Labor and third-party Services Two B/S accounts: 19140100Long-term cost deferral 15120100Short-term cost deferral PS-DNA works with a significant number of expense accounts
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337126*
3372MP9999 337326* 3851MP9999 3852MP9999 3854MP9999 3326MP9999
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33712600
33720100 33732600 38510300 38520800 38540300 33260100
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Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Restricted.
Reporting
Transition costs are captured in the ActDlvCost and DlvCostInc columns of CJE0 report The WIP column, which should capture the offset to the Balance Sheet, is always blank because CJE0 report has a value type restriction that allows RA postings only Review the Balance Sheet account details by using ZMPB or ZMPWBSLST in SAP or BW B/S reports
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Cost planning
Plan expenses in Plan Version 0Plan expenses in either month incurred or month recognized PS-DNA uses WBS forecast start and end dates to determine number of periods for amortization No dedicated amortization plan is required
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Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Restricted.
Amortization principles
The WBS element User Status OPEN/AMRT and forecast start/end dates control the deferral or amortization of costs OPEN: Collect costs and defer AMRT: Recognize remaining deferred cost over remaining periods
Amortization begins when user status is changed to AMRT and not on forecast start date
Forecast end date controls the number of periods over which amortization takes place
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Amortization periods
Month Status 1 OPEN 2 OPEN 3 OPEN 4 OPEN 5 OPEN 6 OPEN 7 AMRT 8 AMRT AMRT 60 AMRT
Costs incurred in months 1-6 will be deferred and begin amortization in month 7 Costs incurred in months 7-12 will be amortized immediately Costs incurred after month 12 should be posted to a new WBSe and be recognized immediately and not amortized
Amortization begins when user status is changed to AMRT and not on forecast start date
User status controls when amortization begins Forecast End Date controls the number of periods for amortization Forecast Start Date is not used, but is required by SAP
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Amortization example
Remaining periods 60 59 58 57 56 55
Costs posted before Mo. 6 will be amortized over 55 periods Costs posted in Mo. 7 will be $2,200.00 amortized over 54 periods Costs posted in Mo. 8 will be $3,700.00 amortized over 53 periods
$4,700.00 $5,900.00 $5,792.73
Mo. 7
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$3,000.00
Amortization begins
$3,000.00
$8,792.73
54
$162.83
$8,629.90
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Amortization calculation
Amortization amount this period
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AMRT
Must be applied in sequence
PS-DNA uses the WBS forecast start and end dates to determine amortization period/amounts.
This user status must be used before setting user status to CLSD
WKAC
CLSD
IMPORTANT: PS-DNA job must be allowed to run between making any status changes.
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Thank you
Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP Restricted.