26 May 2011

Weekly Review: Turning a Project into a Fixed Asset

A common request is to turn a Project from the Project Accounting module, into a Fixed Asset in the Fixed Asset module. There is no native functionality to do this and based on my conversations with the Dynamics GP team, it's not going to happen so you might as well understand the workaround and it looks like this:

1) Create a Miscellaneous Log Cost Category for Fixed Assets pointing the Contra Account to the FA Clearing account and the Cost/Expense account to wherever you are collecting the project costs (a WIP account, a project FA WIP account, etc.). You'll be doing a negative misc log so the cost collection location will be credited and contra (FA Clearing) will be debited.
2) Once the project is ready to become a Fixed Asset, process a negative Misc Log transaction using the Fixed Asset Cost Category to remove an amount equal to the total cost of the project.
a. This setup makes it easy to exclude the FA Cost Category when analyzing project costs while still leaving the project at zero
b. This process provides a transactional audit trail to show that the project was closed out and moved to Fixed Assets
3) Create a Fixed Asset. The GL Transfer mechanism will move the costs from the FA clearing account to the appropriate Fixed Asset account.

The reality is that the number of fields that would actually transfer from a project is really small, single digits small. The complexities of creating a Fixed Asset from a project become large very fast. For instance, how do you deal with multiple assets from a single project, complete assets but incomplete projects, partial capitalization of a project, combining Cost Categories for capitalization, etc. The benefits of creating something to manage this are far outweighed by pain of dealing with all of the possible scenarios. Realistically, this is best handled through a process like the one described here.

Posted by Mark at 6/01/2009 02:23:00 PM