Umoja Assets Under Construction

Transcription

1 Umoja Assets Under Construction Umoja Assets Under Construction Version 2.3 Last Modified: 22-April

2 Agenda Course Introduction Module 1: Asset under Construction Overview Module 2: Setting up a Cost Collector Module 3: Monthly Activities Module 4: Completion of AuC and Final Settlement Course Summary Course Assessment Course Survey 2

3 Introduction Please share with us: Your name Your section/unit Number of Years with the UN Interesting Fact About Yourself 3

4 Ground Rules Please consider the following guidelines during the training session: Turn your cell phone to silent mode. Please step out of the class to take any important phone call Please do not access your or the Internet outside of breaks Participate fully in the training session and respect each other s contribution Reference of transactional steps covered in this course are included in the User Guide. Ensure to review it to learn how to perform the transactions Breaks are included at the discretion of the trainer X X No Phones Do Not Access Participate Ask Questions User Guide Breaks 4

5 Course Overview The purpose of the Assets under Construction (AuC) Course is to provide an end-to-end instruction and various scenarios for the Asset under Construction process. Prerequisite Review You should have completed the following prerequisite courses: Umoja Overview Umoja Master Data and Coding Block Overview Umoja ECC Navigation Umoja Asset Accounting Process Umoja Project Management Overview Umoja Funds Management Overview Course Duration: 6 hours 5

6 Agenda Course Introduction Module 1: Asset under Construction Overview Module 2: Setting up a Cost Collector Module 3: Monthly Activities Module 4: Completion of AuC and Final Settlement Course Summary Course Assessment Course Survey 6

7 Module 1 Objectives After completing this module, you will be able to: Explain Asset under Construction (AuC) end to end Review the Project Management Overview Concepts 7

8 Assets under Construction Assets under Construction The Assets under Construction (AuC) process accounts for selfconstructed assets, internally developed intangible assets and other capital projects. As long as Galileo is still in use, the process differs between Peacekeeping and Non-Peacekeeping: In Peacekeeping and Special Political Missions, an Internal Order (IO) is used to identify individual AuCs for reconciliation purposes only. At fiscal year end, or at the completion of a project, the value of the AuC will be entered directly into the Umoja General Ledger using the internal order. In Non-Peacekeeping entities, a project or internal order is created to collect costs related to the AuC. Goods and services are tracked against the project s Work Breakdown Structure Elements (WBSE s) or internal order. Costs are settled monthly to the AuC. When the project is completed, the AuC is settled into the Final Asset. Service Orders may be used as cost collectors or as part of projects for AuCs. Service Orders will be discussed later in the course. 8

9 Assets Under Construction: Two Approaches In Umoja, there are two methods of managing costs for assets under construction. In general, we utilise the following approach to delineate appropriate options, which are highly dependent upon project-type and duration: Use a Project Use Internal Order Project Complex set of activities that need to be tracked individually Implemented by multiple Resp. Cost Center Funded by multiple Grants Addressing multiple Functional Areas Need to capitalise to multiple assets or components. Internal Order Group of activities, no need to track individually Implemented by one Resp. Cost Center Funded by one Grant Addressing one Functional Area To be capitalised to one asset only.

10 Internal Order An Internal Order is used when the project is considered short-term, implemented by one office only in the context of one UN entity. Internal orders are normally used to plan, collect, and settle the costs of internal jobs and tasks. The Umoja system enables the user to monitor internal orders throughout their entire life-cycle; from initial creation, through the planning and posting of all the actual costs, to the final settlement. Examples of using an internal order for an AuC include: Smaller constructions, e.g. road building Leasehold improvement funded by one donor agreement 10

11 Project System Key Terminology Project Key Term Description It is an organized effort to produce a defined output within a set of constraints concerning scope, time, budget and quality. The temporary nature of projects stands in contrast with business-as-usual (or operations) which are repetitive, permanent or semi-permanent functional activities. Work Breakdown Structure (WBS) It is a model of a project that shows the project activities to be carried out as a hierarchical structure. It forms the basis for the organization and coordination in the project. Work Breakdown Structure Element (WBSE ) Individual elements, components or activities within a WBS are referred to as Work Breakdown Structure Element(s) (WBSE s). They represent a specified itemization of specific tasks within a project.

12 AuC Project structure broken down by WBS Elements Building Project Definition Building WBSE Level 1 Exterior Roofing Interior Services Furniture WBSE Level 2 Foundations & basements Exterior closure Roofing Interior construction Plumbing HVAC Electrical WBSE Level 3 Componentisation will apply to real estate assets such as major owned buildings in which major systems such as the HVAC, roofing, and electrical systems have useful lives shorter than the building itself. If there are costs that are not settled to AuCs, a separated WBSE should be created for settlement to a cost center. For example, furniture costs cannot be settled to an AuC and therefore a separate WBSE should be created. When creating a project for an AuC, the above diagram should be used as guide and should be modified and edited to meet the requirements of the project. 12

13 What Purpose Do WBSE's Serve? Level 1 Level 2 Level 3 Level 4 Project Components Component break-down further breakdown? Creating a WBSE helps you be both comprehensive and specific when managing a project. To determine how to create distinct WBSE's within a specific project, it is best to exert the appropriate effort to map out all requirements of the project. A primary driver of WBSE design are the reporting, milestone and audit requirements established by the UN and the specific project. Each WBSE represents a specific itemization of specific tasks within a project. If the Project is funded by multiple different sources, it allows specific funding for a specific WBSE. For example, a specific grant may be used to provide funding for Plumbing of a building and another grant may be used for Electrical. 13

14 Rules of Codification: Project Definition & WBSE's Given below are some Rules of Codification for WBSE's within the Umoja PJ solution: Example SB Project Definition Rule 1: There is only one Project Definition for a project and it is a unique nine character ID. SB Level 1 WBSE Rule 2: There is only one Level 1 WBSE and it must match the Project Definition (the nine character ID code is exactly the same). SB Level 2 WBSE Rule 3: Each Level 2 WBSE has 12 characters with the first nine characters matching the parent WBSE. SB Level 3 WBSE Rule 4: Each Level 3 WBSE has 15 characters with the first 12 characters matching the parent WBSE. SB Level 4 WBSE Rule 5: Each Level 4 WBSE has 18 characters with the first 15 characters matching the parent WBSE. Note: With every additional WBSE level, the WBSE s code is being amended by two digits, separated by an additional period between each level. 14

15 What Changes When We Add a New WBSE Level? If you initially create a specific number of WBSE levels within a project structure, reporting and cost accumulation complications may emerge if you choose to add an additional level: SB Water Project SB Level 1 WBSE This top-level WBSE is created to manage the overall costs of the project. It is only created for budget control purposes. Financial postings cannot occur at this level. SB Level 2 WBSE This second-level WBSE is created to manage specific costs of a Grant, or donor reporting requirements. Financial postings can incur at this level. SB Level 4 WBSE Note: It is advised to build out the entire Project Structure with associated WBSE s before the project is budgeted and released. 15

16 Capitalisation vs Non-capitalisation According to UN IPSAS Corporate guidelines the minimum threshold for an AuC to be capitalized is 100,000 USD. For expenditures within the construction, there are different criteria for capitalisation for each category of expenditures. Please reference the UN IPSAS Corporate Guidelines: Property, Plant and Equipment for whether costs can be capitalised or not. For guidance on capitalization of expenditures within an intangible AuC please also refer to the UN IPSAS Corporate Guidelines Intangible Assets. Note: While the asset is under construction, depreciation is not yet charged. Only after the AuC is settled to the final asset that depreciation will start. 16

17 Funding for Assets under Construction Assets under construction can be funded by either assessed funds or grants. Assessed Funds Grants Assessed contributions are payments made as part of the obligations of each nation to the UN budget A grant is an object that is used to maintain the financial terms, legal rules and reporting conditions of the donor s contribution Each grant has a specified life cycle that can cover either partial or all project costs. The grant life cycle is defined by the grant validity period. For more information about grants see the Grants Management and/or Funds Management Courses. 17

18 Phases of the Asset under Construction An Asset under construction (AuC) goes through three main phases throughout its life cycle. A cost collector is set up and funding for the AuC is budgeted and released. Monthly Activities: Until the asset is completed, costs are settled monthly to the AuC and/or cost center. Once the AuC is completed, there is a final settlement to the final asset and the cost collector is closed. Cost Collector set up and Budgeted Monthly Settlement Settlement to Final Asset 18

19 AuC End to End Process Create Cost Collector Allocate Budget Cost collector set up Procure Goods and Services Issue Materials from Stock Run Payroll Review IOs/ Projects Create Sub- Assets Masters Settle to AuC Monthly Review IOs/Projects Work is Technically Complete Create Asset Master Update Settlement Rule Settle to Final Asset Asset Useful Life Update AuC completion Return Unconsumed Budget Close Cost Collector Activities within Funds Activities within Finance Activities within Projects or Activities within Supply Chain Activities within Payroll Internal Order 19

20 AuC End to End Process Create Cost Collector Allocate Budget AA Senior or PJ User Procure Goods and Services Issue Materials from Stock Run Payroll Review IOs/Projects Create Sub- Assets Masters Settle to AuC Monthly Create Cost Collector Once decision has been made to proceed with the construction, improvement or alteration, the user creates a cost collector: internal order or project with multiple WBS elements An AuC master record is created automatically when a WBS Element or Internal Order is released. AuC master record is a different type of asset class The settlement rule created during the release of the internal order or project is automatically assigned to the AuC Allocate Budget AA Senior User AA Senior User AA Senior User Budget will be allocated accordingly depending on if it is an internal order or project. If the AuC is going to be funded by a grant, the grant will need to be released to a funded program and then to the project. 20

21 AuC End to End Process Create Cost Collector Allocate Budget Procure Goods and Services Issue Materials from Stock Run Payroll Review IOs/Projects Create Sub- Assets Masters Settle to AuC Monthly The following processes are performed monthly: Procure Goods and Services: Goods and services can be procured with reference to a WBS element or Internal order and the costs will be charged to the cost collector at the time of goods receipt or service entry sheet. Issue Materials from Stock: Materials in stock can be issued to a Service Order, Internal order or WBS element. Cost will be charged to the cost collector at the time of goods issue. Payroll Run: If there is a staff member that is fully dedicated to the construction, his/her infotype will be updated to include the internal order or WBS element so that his/her salary can be charged to the cost collector at the time of payroll run. 21

22 AuC End to End Process Procure Goods and Services Issue Materials from Stock Run Payroll Review IOs/Projects Create Sub- Assets Masters Settle to AuC Monthly AA Senior User AA Senior User AA Senior User Review IOs/ Projects Work is Technically Complete Create Asset Master Update Settlement Rule The following processes are performed monthly: Review Internal Orders, Projects (T-Codes KOK5, CN43N) Identify the internal orders, projects that have costs to be settled to an AuC or cost center at the end of the month Create Sub-Assets Masters (T-Code AS11_FMIM) A sub-asset needs to be manually created for each funding source in the same internal order or WBS Element. This is a mandatory step even if only one funding source exists. Settle to AuC (T-Codes KO88, CJ88, KO8G, CJ8G) The costs collected in the internal order or WBS element are settled to the AuC indicated in the settlement rule The settlement credits the respective expense accounts and debits the AuC account 22

23 AuC End to End Process Review IOs/ Projects PJ or AA Senior User Work is Technically Complete Settle to Final Asset Create Asset Master AA User Asset Useful Life Update Update Settlement Rule AA Senior User Return Unconsumed Budget Close Cost Collector AuC completion Review Internal Orders/Projects (T-Codes KOSRLIST_OR, CN43N) Identify internal orders and projects that need to be capitalized to settle accordingly. KOSRLIST_OR can be used to review list the settlement rules of Internal Orders. Work is Technically Complete (T-Code KO02, CJ20N) The cost collector status must be set to technically complete in order for settlement to the final asset. Asset Master Creation (T-Code AS01) Before settlement to the final asset, the final asset needs to be created manually using AS01, if this is a new construction. Update Settlement Rule (T-Codes: KO02, CJ20N) The final settlement rule must be updated to reflect the asset number for the final asset before final settlement. If an improvement is not set as an intention at the beginning of the work, the settlement rule can be updated at later time. 23

24 AuC End to End Process Review WOs/IOs/ Projects Work is Technically Complete Create Asset Master Update Settlement Rule Settle to Final Asset Asset Useful Life Update Return Unconsumed Budget Close Cost Collector AuC completion AA Senior User AA User AA Senior or PJ User Settle to Final Asset (T-Codes KO88, CJ88, KO8G, CJ8G) The value of the asset will be transferred to the final asset, the final asset will be capitalized and depreciation will start. Asset Useful Life Update (T-Code AS02) The useful life may be extended if this is a major alteration or improvement of an existing asset. Updates to the useful life cannot exceed the maximum useful life specified in the UN IPSAS Policy Return Unconsumed Budget Funds must be returned before cost collector can be closed. Close Cost Collector (T-Code CJ20N, KO02) User closes the Cost Collector either project or internal order. 24

25 AuC Scenarios Assets under construction generally fall under 4 different scenarios: New Construction Leasehold Improvement Major Alteration Internally Developed Intangible AuC These scenarios generally have the same end-to-end process however at each step there are different decisions that may be made. These decision will be discussed later in the course. 25

26 Module 1 Summary The key points covered in this module are listed below: The AuC process is integrated with many Umoja Modules, such as Project Systems and Funds Management, Finance, Plant Maintenance and Real Estate. A Project with WBSE elements or Internal Order can be used as cost collectors. Service Orders may be used for projects under a month or part of a larger construction project The AuC process has three main phases for its lifecycle: creation of cost collect and budget allotment, monthly settlement, and settlement to final asset Assets under construction generally fall under 4 different scenarios: New Construction Improvement Major Alteration Intangible AuC 26

27 Agenda Course Introduction Module 1: Asset under Construction Overview Module 2: Setting up a Cost Collector Module 3: Monthly Activities Module 4: Completion of AuC and Final Settlement Course Summary Course Assessment Course Survey 27

28 Module 2 Objectives After completing this module, you will be able to: Set up the necessary cost collector for the AuC Be able to explain how the Funds Management Module is integrated with the AuC process Know the considerations and decision that need to be made prior to starting the AuC process 28

29 Module Introduction For this module we will go through the process to set up the cost collector and budget allocation for the AuC. Planning and considerations before starting the AuC will also be discussed. The AuC that we will be using as an example for the rest of the course will be a major alteration for an improvement of a building (real estate asset).

30 AuC Scenarios As previously mention, there are 4 different AuC scenarios the following are examples of each scenario: New Construction A new construction of a community centre for UNHABITAT funded by two grants in which the building will be donated at the end of construction. Leasehold Improvement Improvements made to a piece of land or building that is leased (i.e. not owned by the United Nations). For example, carpet installation for UNON funded by a grant Internally Developed Intangible AuC A UNEP intangible asset: ALM (Application Lifecycle Management) project funded by a grant. Major Alteration Improvements to an existing building owned by the UN funded by regular budgetary funds. We will use this example for the step by step instruction for the rest of the course.

31 Planning and Considerations for Asset under Construction The following are some considerations to take account before starting the AuC process: 1. Decide whether to utilize a Project with WBSEs or an Internal Order? 2. If using a project with WBSEs, how to structure the project hierarchy? 3. Does a new final asset need to be created? 4. Where is the funding going to come from? Assessed funds? Grants? Both? 5. Which funding source will be utilized for each WBSE? 6. What/how will services and materials be procured? 7. Is a Service Order going to be used for services? 31

32 Use a Project with WBSEs or an Internal Order? For our scenario of major alteration, we will utilize a project with WBS Elements as a cost collector for the following reasons: Activities within the major alteration need to be tracked separately Because the major alteration has a higher level of complexity, a project structure would be more suitable for this this scenario Because this AuC is for a real estate asset with Componetisation, the Project WBSEs can be matched up to each component of the asset. 32

33 How to structure the project for AuC Major Alteration? Alteration Project Building WBS Level 1 Alteration Project Building WBS Level 2 Services Interior Conveying Systems Plumbing HVAC Electrical Fire Protection Furniture/ Equipment Interior Construction WBS Level 3 For our scenario Major Alteration AuC, there are three levels of WBSE to account for componentization of the building. Since this is an alteration of an existing real estate asset, the Level 3 WBSE will correspond to the sub-assets of the building. Using the project structure as a template (in Module 1), the user will decide which components are necessary for the AuC. Once the project is created and released, AuC master asset is automatically created based upon the investment profile of the WBS Element. 33

34 Does a final asset need to be created? For our scenario, the major alteration AuC, a final asset does not need to be created because the asset already exists. Once the AuC is completed, the value of the AuC will be transferred to the existing asset and its useful life will be adjusted accordingly. The final asset needs to be created if the AuC is a new construction or leasehold improvement because there isn t an existing asset the AuC can be settled to. 34

35 Where is the funding going to come from? Funding for this scenario, the major alteration, will come from assessed funds. Therefore the a user will need to allocate the correct funds for the project. However for other AuC scenarios, funding may also come from a single, multiple grant(s) or a combination of assessed funds and grants. For these cases, a user with grants management access will have to release the funds for the grant. 35

36 Which funding source will be utilized for each WBSE? For our scenario for major alteration, budgeting only needs to be done at a higher level because this scenario is funded by assessed funds. For other AuC scenarios that involve funding from grants, budgeting will need to be done at the WBSE level. For example, a project can be funded by multiple grants; each grant can fund different WBSEs within the project. An example of a new construction funded by two different grants is shown below. Project Definition Construction Project UN Habitat WBSE Level 1 Community Center WBSE Level 2 Building Grant A Interior Services/ Construction Grant B Furniture/ Equipment 36

37 What/how will services and materials be procured? Alteration Project Building A Interior Services Interior Construction Furniture/ Equipment Conveying Systems Plumbing HVAC Fire Protection Electrical 39% of General Construction Services 39% of Insurance Services 39 % of Architectural Services 75 desks & 75 chairs Generator Moving Services for the furniture 3% of General Construction Services 3% of Insurance Services 3% of Architectural Services 9% of General Construction Services 9% of Insurance Services 9% of Architectural Services 3% of General Construction Services 3% of Insurance Services 3% of Architectural Services 3% of General Construction Services 3% of Insurance Services 3% of Architectural Services 43% of General Construction Services 43% of Insurance Services 43% of Architectural Services 37

38 Will a Service Order be used? Service Order will not be utilized in this scenario. The UN uses a Service Order to request a service from an internal service provider. The Service Order allows for the monitoring of the service being produce. There are generally two way to use Service Orders in regards to AuCs: Service Orders can be used as a cost collector as an option instead of projects and internal orders. Used for short projects which can be quickly capitalized. Using a Service Order as a cost collector is not used as often. Service Orders can be used for specific services within the construction that can be used to settle to the project or internal order The guidelines are that if more than one month construction will occur, a Project or Internal Order needs to be used as a cost collector. Service Orders cannot be settled directly to an AuC and therefore needs to settle first to the project or directly to the final asset if the Service Order is used as a cost collector for the whole construction. 38

39 Major Alteration Scenario We will now begin the process for the Major Alteration scenario. The rest of this module will go through the process of setting up the project for the AuC. The subsequent modules will continue to use the major alteration as an example to show the subsequent steps in the AuC process.

40 Create Project and Release It Create Cost Collector AA Senior or PJ User Allocate Budget Activities within Projects or Internal Orders Create a Project Create Project Definition Create WBSEs Release Project Procure Goods and Services Issue Materials from Stock Run Payroll Review IOs/Projects Create Sub- Assets Masters Settle to AuC AA Senior User AA Senior User AA Senior User 40

41 Steps to Create a Project for AuC The first step in creating a Project for an Asset under Construction is creating a Project Definition, and defining associated key elements. Also, be sure to select the right project profile otherwise you will have to restart the project creation process. Key elements of a project include project profile, project duration, project type, applicant and person responsible for the project (overall). Project Definition WBSE level 1 WBSE level 2 WBSE level 2 WBSE level 3 WBSE level 3 WBSE level 3 41

42 Steps to Create a Project for AuC The second step for creating a project for an Asset under Construction is creating a highlevel Level 1 WBSE. This top-level WBSE will be provided the same, if not similar, name as the Project Definition. Typically, it is where overall project budget is held. Project Definition WBSE level 1 WBSE level 2 WBSE level 2 WBSE level 3 WBSE level 3 WBSE level 3 42

43 Steps to Create a Project for AuC The third step in managing a project is creating a lower-level WBSE. Once the Level 1 WBSE is created, you may add additional WBSE's to the Project based on project specifics. For our major alteration scenario, we will have three levels of WBSEs, due to IPSAS Corporate guidelines to capitalize a building due to its components. Project Definition WBSE level 1 WBSE level 2 WBSE level 2 WBSE level 3 WBSE level 3 WBSE level 3 43

44 Steps to Create a Project for AuC For this scenario, the WBSEs are structured based upon componentisation of the building asset. However, there are some cases where the WBSEs do not need to be broken down by asset componentisation. AuCs in which the building will be donated at the end of construction. Because the building will be donated, the asset will not be on the UN s statements and therefore will not need to be tracked or reported after completion. AuCs where there is no componentisation of the asset for example in leasehold improvements.

45 Create Project and Release It A project is created in the Project Builder using T-code CJ20JN. The project structure is then modified and project attributes are updated to meet the requirements of the project being implemented. Please keep in mind, for other scenarios an internal order may be created using T-code KO01 based upon the type of AuC as discussed earlier. Note: For the step-by-step instructions for creating the project, WBS Elements, and releasing it please see the AuC user guide Module 2. Structure Tree Area Worklist & Templates Work Area 45

46 Investment Profile, AuC asset record created For WBS Elements that are to be settled to AuCs, an investment profile needs to be selected in the control tab. Once the project is released an AuC master record is automatically created. The settlement rule is automatically populated on the WBSE. However, settlement rule can be manually created for when there are split settlements before settlement occurs. 46

47 Allocate Budget Update Create Settlement Cost Collector Rule Allocate Budget GM & FM User Activities within Budget & Grants Procure Goods and Services Issue Materials from Stock Run Payroll Review IOs/Projects Create Sub- Assets Masters Settle to AuC AA Senior User AA Senior User AA Senior User 47

48 Allocate Budget For each asset under construction, funds must be allocated for the project whether it be from assessed funds, grants or both. The funds for our scenario, the major alteration of the building, comes from assessed funds. However, funding may come from grants. Grant funds must first be released to the Funds Management. Once a Budget Control WBSE is defined in the project, it will trigger the creation of a Funded Program. Each project requires at least one Budget Control WBSE to receive budget allotments. Once funds are released, monthly activities may begin. AuC Internal Order/WBSE 48

49 Update User Status of Project User Status is updated throughout the project life cycle to indicate the stages of the project. Each WBSE has its own User Status which represents the current phase of the WBSE. The following are the statuses that may be populated: To update the user status, use T-code CJ20N to open project builder. For the step-by-step instructions, please refer to the AuC user guide. 49

50 Agenda Course Introduction Module 1: Asset under Construction Overview Module 2: Setting up a Cost Collector Module 3: Monthly Activities Module 4: Completion of AuC and Final Settlement Course Summary Course Assessment Course Survey 50

51 Module 3 Objectives After completing this module, you will be able to: Be able to explain and perform the monthly activities which include the following: Procurement of Goods and services Monthly Settlements Be able to create the necessary Sub-Assets for AuC and update settlement rules for the cost centers. 51

52 Module 3 Introduction This module will go through the monthly activities that occur during the AuC process. The module will continue to use the major alteration of a building as the example AuC. The module will include other steps that might be taken for other AuC scenarios.

53 Procurement Goods, Services, and Equipment Procure Issue Goods Materials and from Services Stock Issue Materials from Stock Run Payroll Review IOs/Projects Create Sub- Assets Masters Settle to AuC Monthly Raise Purchase Requisition & Order AA Senior User AA Senior User AA Senior User Post Service Entry Sheet Create Inbound Delivery doc Create Goods Receipt Activities within Supply Chain 53

54 Procurement Goods, Services, and Equipment The procurement process is involved to procure the necessary goods and services for the AuC. Procurement of goods and services is done through SRM. Purchase Requisition (PR) /Shopping Cart is created with each good or service linked to the correct WBS element. In the Account Assignment category field, populate WBS element option and enter WBS Element number for the good or service procured. Alternatively, the internal order option may be populated if the cost collector is an internal order. A Purchase Order (PO) is created against the PR with each line item of the PO corresponding to correct WBSE. 54

55 Review project and Settle to AuC Issue Materials from Stock Run Payroll Review IOs/Projects Create Sub- Assets Masters Settle to AuC AA Senior User AA Senior User AA Senior User Activities within Finance Update Settlement Rule Run Cost Settlement Review Financial Documents Run line item Report 55

56 Review and Create Sub-Assets Masters The Asset Accounting Senior User identifies that the major alteration project has costs to be capitalized at the end of the month. AuC Sub-assets will need to be manually created using T-code AS11_FMIM as this is not automatically done. The AuC master records will be updated with the fund information based upon first settlement from the WBS element to the AuC. Settlement rules must be created for the cost center for each WBS element that will be settled to cost center. For our scenario, the Furniture and Equipment will be settled to a cost center because it cannot be capitalized Settlement Rules must be maintained for the lowest level WBS elements where the expenditures have been incurred. Note: If grants were used for funding the Asset Accounting Senior User must update the grant information for the AuC 56

57 Update Settlement Rule and Settle to AuC/ Cost Center Conveying Systems Plumbing HVAC Electrical Fire Protection Furniture/ Equipment Interior Construction AuC 1 Cost AuC 2 AuC 3 AuC 4 AuC 5 AuC 6 Center In order to settle costs to AuCs or to a cost center, the Asset Accounting Senior user will run cost-settlement T-code CJ88. If internal order was used, T-Code KO88 is used to settle to AuC. Monthly settlements can also be processed via batch jobs in Umoja by creating and using a selection variant. To create a selection variant, use T-code CJ8V or KO8G for project or internal order respectively. To settle by variant use T-code CJ8G for projects and KO8G for internal orders. The advantage of using a selection variant is that allows settlement on a collection of WBS Elements or Internal Orders. To review financial documents related to capitalization use T-code FB03 or AW01N. To validate that all expenses were settled to the AuC or Cost Center, run line item report using T-code CJI3 (project) or KOB1 (internal order) 57

58 Module 3 Summary The key points covered in this module are listed below: The monthly activities include the following: Procurement of Goods and services Monthly Settlements AuC Sub-assets: will need to be manually created using T-code AS11_FMIM. 58

59 Agenda Course Introduction Module 1: Asset under Construction Overview Module 2: Setting up a Cost Collector Module 3: Monthly Activities Module 4: Completion of AuC and Final Settlement Course Summary Course Assessment Course Survey 59

60 Settlement to Final Asset Review IOs/ Projects Work is Technically Complete Create Asset Master Update Settlement Rule Settle to Final Asset Asset Useful Life Update PJ or AA Senior User AA User AA Senior User AA User Run Cost Settlement Run line item Report Return Unconsumed Funds Close Cost Collector PJ or AA Senior User Activities within Finance Activities within Projects and Internal Order 60

61 Review Cost Collector and Set Work to TECO Identify the internal orders and projects that need to be capitalized to settle accordingly. Once the AuC project is completed the project or internal must be set to Work is Technically Complete (TECO) using T-Code CJ20JN or KO02 before settlement to the final asset. Once the project is set to TECO there can be no more monthly settlements to the AuC.

62 Expenditures after project is set to TECO If there are expenditures after the project or internal order has been set to TECO, the expenditures will be settled to the final asset directly without settling to the AuC. For example, if the last monthly settlement happen on May 31 st and the AuC is completed on June 10 th, all expenditures in between those dates are settled to the final asset when final settlement occurs for the asset. May June AuC completed Last Monthly Settlement

63 Create Final Asset and Update Settlement Rule As mentioned earlier in the course, creating the final asset and updating the final settlement rule can occur anytime before the final settlement. For this scenario, there is already an existing asset so the final asset does not need to be created. The final settlement rule must be updated to reflect the asset number for the final asset before final settlement. The following examples are different scenarios when a final asset needs to be created for AuC: The UN constructs a new building to use for its own use or to be donated for a specific cause A leasehold improvement made to a piece of land or building that is leased (not owned by UN) Construction of an intangible asset

64 Settle to Existing Real Estate Asset Conveying Systems Plumbing HVAC Electrical Fire Protection Furniture/ Equipment Interior Construction AuC 1 Cost AuC 2 AuC 3 AuC 4 AuC 5 AuC 6 Center Settle to Existing Asset Existing Building Asset Sub-Asset Sub-Asset Sub-Asset Sub-Asset Sub-Asset Sub-Asset For settlement to Final Asset, the value of the AuC assets will be transferred to the final asset. The final asset will be capitalized based on the selected asset value date and depreciation will start on this date. The Asset Accountant Senior user will use either T-Codes KO88 for internal order or CJ88 for projects for final settlement to the asset. Alternatively if a selection variant was created, settlement can be run using T-code CJ8G (project) or KO8G (internal order) The Asset Accounting User will need to update the useful life due to the alteration work done on the existing real estate asset. Updates to the useful life cannot exceed the maximum useful life specified in the UN IPSAS Policy. 64

65 Close Cost Collector Review WOs/IOs/ Projects Work is Technically Complete Create Asset Master Update Settlement Rule Settle to Final Asset Asset Useful Life Update PJ or AA Senior User AA User AA Senior User AA User Return Unconsumed Funds Close Cost Collector PJ or AA Senior User Close Project or Internal Order Activities within Finance Activities within Projects and Internal Order 65

66 Close Project After the project or internal order is completed, funds that were unconsumed should be returned to Funds Management before closing the cost collector. Additionally, reports may be run. To check line item use T-code CJI3 or KOB1 and to show what has been settled use T-code ZPJCOSTELEMENT. After all open commitments have been closed the project or internal order can be closed. If the asset is to be donated, the Asset Accounting user can donate the asset. This step can be done before closing of the project or internal order but after final settlement. For the step-by-step instructions on donating an asset, pleaser refer to the AuC user guide or FI 332 Asset Accounting user guide. 66

67 Process for Service Order For our major alteration, we are not using a Service Order. However, in other scenarios a Service Order may be used to provide internal services as part of a project. If service order is used as part of a project, the costs must be settled to the project WBSE before settlement to the AuC. For example in a Leasehold improvement for UNEP, the work will be will be done in-house by UNON as the service provider. The process for Service Order is shown below. Service orders can also be used as cost collector for internal or external services that are under a month in duration. Once Service Order is completed costs will be settled directly to the final asset. The cost of labor dedicated to a Service Order will be charged to the Service Order at the time of the labor time confirmation. For the step-by-step instructions for the Service Order process, please refer to the AuC user guide or the Service Order Management course for more information with regards to notifications. UNEP Create Notification Approve Notification Approve Service Order Complete Notification UNON Create Service Order for UNON UNON Release Service Order Confirm Service Order Complete Service Order 67

68 Module 4 Summary The key points covered in this module are listed below: If there are expenditures after the project or internal order has been set to TECO, the expenditures will be settled to the final asset directly without settling to the AuC. The final settlement rule must be updated to reflect the asset number for the final asset before final settlement. T-Codes KO88 for internal order or CJ88 for projects are used for final settlement to the asset. Alternatively if a selection variant was created, settlement can be run using T-code CJ8G (project) or KO8G (internal order) After all open commitments have been closed or internal order can be closed. Service orders can also be used as cost collector for internal or external services that are under a month in duration. Once Service Order is completed costs will be settled directly to the final asset. 68

69 Agenda Course Introduction Module 1: Asset under Construction Overview Module 2: New Construction Module 3: Leasehold Improvement Module 4: Major Alteration and Improvement Course Summary Course Assessment Course Survey 69

70 Course Summary The key points covered in this course are listed below: The AuC process is integrated with many Umoja Modules, such as Project Systems and Funds Management, Finance, Plant Maintenance and Real Estate. A Project with WBSE elements or Internal Order can be used as cost collectors. Service Orders may be used for projects under a month or part of a larger construction project The AuC process has three main phases for its lifecycle: creation of cost collect and budget allotment, monthly settlement, and settlement to final asset Assets under construction generally fall under 4 different scenarios: New Construction, Improvement, Major Alteration, Intangible AuC The monthly activities include the following: Procurement of Goods and services, Monthly Settlements The final settlement rule must be updated to reflect the asset number for the final asset before final settlement. After all open commitments have been closed or internal order can be closed. 70

71 Agenda Course Introduction Module 1: Asset under Construction Overview Module 2: New Construction Module 3: Leasehold Improvement Module 4: Major Alteration and Improvement Course Summary Course Assessment Course Survey 71

72 Course Assessment Now that you have completed all the modules in this course, you can test your knowledge by completing the Course Assessment. To receive credit for completing this course, you must pass this assessment with a minimum score of 90%. To complete the assessment you must return to the Learning Management System: 1. Log into Inspira 2. Navigate to Main Menu -> Self-Service -> Learning -> My Learning 3. Search for the name of the course under the My Learning Activities section 4. Click the Start link of the course assessment 5. Click the Submit button once you have completed the assessment 72

73 Agenda Course Introduction Module 1: Asset under Construction Overview Module 2: New Construction Module 3: Leasehold Improvement Module 4: Major Alteration and Improvement Course Summary Course Assessment Course Survey 73

74 Course Survey Your feedback is important to the continuous improvement of our training program. Please complete the evaluation for this course using the following steps: 1. Log into Inspira 2. Navigate to Main Menu -> Self-Service -> Learning -> My Learning 3. Search for the name of the course under the My Learning Activities section 4. Click the Start link of the course survey 5. Click the Submit button once you have completed the course survey 74

75 Congratulations! You have successfully completed the Umoja Assets Under Construction course. 75