eAM Work Order Capitalization Accounting

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Accounting entries during capitalizing eAM cost to Fixed Asset
The accounting reconciliation between maintenance expenses from a work order and capitalization of work order costs is largely a manual effort



However the same can be automated to some extent if the business process can accommodate a single asset clearing account for all capitalization works initiated from a single EAM org. To do this,

1. Create a separate accounting class which will referenced on capitalization work orders. This accounting class will have all its variance accounts set as the Asset Clearing account.

2. Set the eAM parameters to have the offset account as the Asset clearing account.

3. As a procedure, ensure that work orders are closed (i.e. status of work order is changed to 'Closed') before capitalization is initiated. This will ensure that value is transferred from valuation accounts to variance accounts



Now the accounting entries would be as follows :

Work Order transactions

Dr:     EAM Valuation accounts

Cr:     Mtl Valuation / Resource absorption

Work Order Close

Dr:     Variance account = Asset Clearing account

Cr:     EAM Valuation accounts

Post Mass additions

Dr:     Asset Cost account

Cr:     Asset Clearing account = Offset A/c = Variance account 



As can be seen from above this approach can be adopted when there is a single asset clearing account which can be referenced as the Offset a/c in EAM parameters and as the variance accounts in the accounting class. Unfortunately there are no other events apart from the above, which can trigger accounting entries

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