In an expense-capitalised project, all the costs have been transferred to project WIP in the project completion except the labour time. Any specific configuration/set-up required to capitalize the labour time reported?
Best answer by Thomas Peterson
View originalHi,
In a Capitalized type of project, all project cost transactions will be capitalized - except when project capitalization is set to periodical and when the activity on the project is set to exclude from all ledgers. I’m defining the project cost transaction as a posting to a cost type account where the posting line includes a project ID.
If labor is not being capitalized first see the account used for that given transaction. If that account is balance sheet IFS will not capitalize as IFS does not see this (from a GL perspective) as cost. Also, if the time was entered against an activity (such as project time reporting) see the activity detail and see if exclude from ledgers is checked.
It’s important to note what transaction is being considered as labor expense. One could argue that M40 WIP from a labor entry M42 could be seen as labor expense. However traditionally M40 is a balance sheet account and will not be subject to capitalization. This is just a comment as to why additional information should be considered.
Another comment, it is important to note when the capitalization is set to occur. Transaction based, will perform capitalization at GL update. Periodical will perform the capitalization as part of the month end process for project capitalization and rev rec. In short, it also depends on the setting on the project as to when to expect to see the capitalization. That setting does not change the capitalization process greatly, it does change the when. The notes just indicate labor is not capitalized; the notes do not say if other costs are being capitalized - So I commented about the when capitalization occurs.
Best regards,
Thomas
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