Global Capital Spends

Within the Metrix Asset Management system, a Capital Spend refers to an amount of money that has been incurred against a specific project (Budget Bucket) and will be Capitalised to the underlying Asset Components at the conclusion of the project.

A Global Capital Spend is one of two types of Capital Spends that can be allocated to a Budget Bucket (the other being a Linked Capital Spend). A spend type of Global or Linked simply controls how the Capital Spend is capitalised/recognised against the underlying Asset Components at the end of the project. In either spend type, the total Capital Spend amount is the total amount of all Capital Spends that have been incurred against the Budget Bucket.

The term “Global” refers to the fact that the Capital Spend is not linked to a specific Asset Component, but rather is attributed to the entire Budget Bucket. When it comes to capitalising/recognising the Capital Spends at the end of the project, Global Capital Spends are distributed evenly (based on Cost Units) across all Budget Bucket Items that are assigned to the Budget Bucket.

In the above example, the Budget Bucket has three items (Component A, Component B, and Component C) with differing cost unit values. Altogether, they combine with a total cost unit value of 6000. The Budget Bucket also has two (2) Global Capital Spends allocated to it, one for $15,000 and the other for $2,000. The total Global Capital Spend for the Budget Bucket is $17,000.

To calculate the ‘share’ of the Global Capital Spend that each item will receive, the following formula is used:

How this breaks down for each Component Item is shown in the table below.

This means, when it comes to capitalising/recognising the Global Capital Spend, Component A will incur $5,610 of the overall spent amount.

Linked Capital Spends

Within the Metrix Asset Management system, a Capital Spend refers to an amount of money that has been incurred against a specific project (Budget Bucket) and will be Capitalised to the underlying Asset Components at the conclusion of the project.

A Linked Capital Spend is one of two types of Capital Spends that can be allocated to a Budget Bucket (the other being a Global Capital Spend). A spend type of Global or Linked simply controls how the Capital Spend is capitalised/recognised against the underlying Asset Components at the end of the project. In either spend type, the total Capital Spend amount is the total amount of all Capital Spends that have been incurred against the Budget Bucket.

The term “Linked” refers to the fact that the Capital Spend is linked to one or more specific Asset Components. When it comes to capitalising/recognising the Capital Spends at the end of the project, Linked Capital Spends are distributed evenly (based on Cost Units) across ONLY the Budget Bucket Items that are linked to the Capital Spend. Items that are not linked to the Capital Spend will not receive any of the specifically linked Capital Spend amount.

In the above example, the Budget Bucket has three items (Component A, Component B, and Component C) with differing cost unit values. Altogether, they combine with a total cost unit value of 6000. The Budget Bucket also has three (3) Linked Capital Spends allocated to it, one for $15,000, one for $2,000, and the other for $4,000. The total Capital Spend for the Budget Bucket is $21,000.

To calculate the ‘share’ of the Linked Capital Spends that each item will receive, the following formula is used and calculated for EACH Linked Capital Spend:

As noted above, calculating Linked Spend shares is a two-step process. First we must assess the Total Cost Units per Linked Spend, and then we can calculate the share of spend for each item. The following table outlines how we can deduce the Total Cost Units for each Linked Capital Spend:

From the above, we can see that Spend 1 is linked to Component A and Component B, which (through summing their cost units) we can see have a total of 5000 cost units. So, for each spend, the spend shares can be calculated as follows:

Spend 1: $15,000

Spend 2: $2,000

Spend 3: $2,000

Putting this together is simply a matter of summing the share of spend per Component Item within the Budget Bucket. This is detailed below:

This means, when it comes to capitalising/recognising the Global Capital Spend, Component A will incur $6,000 of the overall spent amount.

Hybrid Capital Spending

The previous two (2) sections covered the concepts of Global and Linked Capital Spending. Within those sections, each spend type was assessed in isolation from the other. In practice, however, it is possible (and common) to have both Global and Linked Capital Spend events ascribed to a Budget Bucket. Consider the following:

In this example, the Global Capital Spend would be allocated to both road segments, while the Linked Capital Spend would only be allocated to the major arterial road. The system will automatically calculate the share of each spend for each item, and the total Capital Spend for each Bucket Item will be the sum of their Global and Linked Capital Spend Shares.

So, first to calculate the Global Capital Spend share for each item. To do this, we simply apply the formula for Global Capital spend to each item. This is shown in the table below:

Next, we allocate the Linked Capital Spend to the major arterial road only. As the spend pertains to the one segment only, the share of cost units for this item is 100%. The breakdown per item is therefore:

Finally, we can combine the two (2) Capital Spend shares to get the total Capital Spend for each item. This is shown in the table below:

Once again, the system does all of these calculations on your behalf. As an end user, you need only understand the principles behind it, and how to set up the Global and/or Linked Capital Spends correctly.

Capital Spend Share Overrides

By now you are familiar with how Capital Spends (Global, spends, Linked spends, and a combination or Hybrid using both) can be used within the Metrix Asset Management system to attribute capital expenditure to your various Budget Buckets. You are also familiar with how the system uses Budget Bucket Capitalisation Shares to determine how any capital expenditure against the Bucket is capitalised at the end of the project.

This section expands upon these concepts and introduces the concept of Spend Capitalisation Share Overrides, which can be used to instruct the system on how to allocate the capital expenditures for a specific Spend entry.

Below is an example of how Capitalisation Shares Overrides can be used, and what impact that has on the final recognition figures for Component Items in a Budget Bucket in regard to their end of project capitalisation. For this example, we will use the simple global spend example from our previous section - as the spending structure is not the focus here, rather the capitalisation shares are.

Also, for the sake of simplicity, we will assume that the Budget Bucket has a simple Capitalisation Share structure of 100% New (that is, we’re building new Assets).

The details of the above spends are as follows:

The above table is essentially stating that the first spend does NOT have any overrides defined, and therefore the system will honour the Budget Bucket Capitalisation Shares of 100% New when capitalising this spend. The second spend does have defined overrides, and therefore the system will ignore the Budget Bucket Capitalisation Shares and apply these overrides when capitalising this spend.

This ultimately results in the following capitalisation figures for the two spends:

As you can see, the first spend simply inherits the Capitalisation Shares from the parent Budget Bucket. These breakdowns would result in the following capitalisation figures for the underlying components:

This example, while simple, demonstrates the concept of Spend Capitalisation Share Overrides. The system will always honour the Capitalisation Shares set on the Budget Bucket, unless you specifically override them at the Spend level.

Spend Metadata

The Spend Metadata options provide opportunity for users to log ancillary information about a spend entry. Specifically, the following fields are available:

• Description: A free text field for users to enter a description of the spend entry.
• External Ref: A free text field for users to enter an external reference for the spend entry.
• Comment: A free text field for users to enter comments about the spend entry.

How each field is utilised is a matter of user preference. For example, the Description field could be used to enter a description of the spend entry, while the External Ref field could be used to enter a reference number from an external system. The Comment field could be used to enter any additional comments or notes about the spend entry.

None of the above metadata fields are mandatory, and can be overwritten as blank (by the user) if required at a future date.

Create a Global Spend

To create a Global Spend within a Budget Bucket, you must have navigated to the desired Budget Bucket and selected the ‘Spending’ tab from the Buckets navigation pane. This page is divided into two sections. The left-hand side contains a map window showing the Budget Bucket Items. The right-hand side contains a summary view of any spends that have been ascribed to the Budget Bucket already.

To create a Global Spend, follow these steps:

1. From the ‘Spending’ tab of the Budget Bucket, click the ‘New’ button in the top-left corner of the right-hand side summary view.

2. The ‘Log Spend’ form will appear, and by default, the Spend Type will be set to ‘Global’. Don’t change this.

3. For the remaining fields, fill in the following as it pertains to your situation:

   • Spend Value: Enter the value of the spend in this numeric field. This is a required field, so you must enter a value.

   • Capitalisation Allocation Overrides: Enter any OVERRIDES to the Budget Bucket Capitalisation Shares in these fields. This is an optional field and should only be used if the Spend shares differ from that of the Budget Bucket. Make sure the total of the entered overrides equate to 100%.

   • Description: Enter a description of the spend in this text field. This is an optional field, but it is recommended that you enter a description to help identify the spend later.

   • External Ref: Enter an external reference for the spend in this text field. This is an optional field.

   • Comment: Enter a comment for the spend in this text field. This is an optional field.

4. Once you have at least entered a Spend Value, you can click the ‘Save’ button at the top of the form to save the spend.

The new Global Spend will now appear in the right-hand side summary view of the Budget Bucket’s Spending tab. The spending summary gauge will also react accordingly to reflect the new spend.

Create a Linked Spend

To create a Linked Spend within a Budget Bucket, you must have navigated to the desired Budget Bucket and selected the ‘Spending’ tab from the Buckets navigation pane. This page is divided into two sections. The left-hand side contains a map window showing the Budget Bucket Items. The right-hand side contains a summary view of any spends that have been ascribed to the Budget Bucket already.

To create a Linked Spend, follow these steps:

1. From the ‘Spending’ tab of the Budget Bucket, click the ‘New’ button in the top-left corner of the right-hand side summary view.

2. The ‘Log Spend’ form will appear, and by default, the ‘Spend Type’ will be set to ‘Global’. This MUST be changed to ‘Spend Linked to Budget Item(s)’.

3. For the remaining fields, fill in the following as it pertains to your situation:

   • Spend Value: Enter the value of the spend in this numeric field. This is a required field, so you must enter a value.

   • Capitalisation Allocation Overrides: Enter any OVERRIDES to the Budget Bucket Capitalisation Shares in these fields. This is an optional field and should only be used if the Spend shares differ from that of the Budget Bucket. Make sure the total of the entered overrides equate to 100%.

   • Description: Enter a description of the spend in this text field. This is an optional field, but it is recommended that you enter a description to help identify the spend later.

   • External Ref: Enter an external reference for the spend in this text field. This is an optional field.

   • Comment: Enter a comment for the spend in this text field. This is an optional field.

4. Now it is time to Link the spend to one or more Budget Bucket Items. With the spend form still active, use the map tools in the left-hand side map window to navigate and select a Budget Bucket Item that you wish to link to.

   Info

   The selection pattern for this map window is based on Budget Bucket Items rather than Assets (as is the case for the Assign tab). This means that you may encounter stacked Component Items (that relate to a single Asset) resulting in a Multi-Selection.

   It can be useful to FILTER the map to show only the Items you wish to link to. For information regarding filtering the map, see Filtering the Spend Map.

   From the map, there are two modes supported for linking a spend to a Budget Bucket Item:

   • Single Selection: Click on a single Budget Bucket Item you wish to link to. The selected item will be highlighted in blue, and the ‘Link to Spend’ button will be shown at the top of the Info Panel. Toggle the ‘Link to Spend’ switch to link the selected item to the spend.
   • Multi-Selection: Click and drag a box around multiple Budget Bucket Items you wish to link to. The selected items will be highlighted in blue, and the ‘Link to Spend’ button will again be shown at the top of the Info Panel. This time, the toggle switch is referring to all the Items within your selection set. Toggle the ‘Link to Spend’ switch to link all selected items to the spend.

   Additionally, there are some shortcut methods available for linking a spend to one or more Budget Bucket Items. These are available from the menu button (labelled, ‘Shortcuts’) just below the ‘Spend Type’ selector from step 2 above. The following shortcut options are available:

   • Link All Items: This will link all Budget Bucket Items CURRENTLY assigned to the bucket, to the spend. This is useful if you are creating a spend that relates to all items within the Budget Bucket, but you do not wish to make it global - to protect against future Item adjustments.
   • Link Filtered Items: This will link all Budget Bucket Items that are currently filtered within the map to the spend. This is useful if you are creating a spend that relates to a subset of items within the Budget Bucket.
   • Unlink All Items: This will unlink all Budget Bucket Items from the spend. This can be useful for ‘restarting’ your spend selections.
   • Unlink Filtered Items: This will unlink all Budget Bucket Items that are currently filtered within the map from the spend. This is useful for refining away linked items.

5. Linked Items will appear in the ‘Linked Items’ section of the form. You can remove a linked item by clicking the trash can icon next to the item in the list. This will remove the link from the spend, but will not delete the Budget Bucket Item itself.

6. Once you entered a Spend Value and linked at least one (1) item, you can click the ‘Save’ button at the top of the form to save the spend.

The new Linked Spend will now appear in the right-hand side summary view of the Budget Bucket’s Spending tab. The spending summary gauge will also react accordingly to reflect the new spend.

Edit a Spend

Editing a spend within a Budget Bucket is a very simple and straightforward process. To edit a spend, navigate to the desired Budget Bucket and enter the ‘Spending’ tab panel. Then, perform the following steps:

1. On the right-hand side of the screen is shown a list of all the spends currently ascribed to the Budget Bucket. Locate the spend you with to modify and click the row entry.

2. The spend form will appear, showing the details of the selected spend. You can now edit any of the fields in the form, including:

   • Spend Amount
   • Capitalisation Share Overrides
   • Description
   • External Reference
   • Comment

   The spend type CANNOT be edited. That is, a global spend cannot be changed to a linked spend, and vice versa.

3. For linked spends, you can also modify the array of Bucket Items that are linked to the spend. Simply follow the steps listed in Create a Linked Spend.

4. Once you have made the desired changes, click the Save button to save your changes. The spend will be updated.

Delete a Spend

Deleting a spend within a Budget Bucket is a very simple and straightforward process. To delete a spend, navigate to the desired Budget Bucket and enter the ‘Spending’ tab panel. Then, perform the following steps:

1. On the right-hand side of the screen is shown a list of all the spends currently ascribed to the Budget Bucket. Locate the spend you with to remove and click the row entry.

2. At the top of the Spend form is an Action menu (denoted by three dots). Click on the Actions menu and select ‘Delete’.

3. A confirmation dialog will appear, asking you to confirm the deletion. Click ‘Delete’ to delete the spend.

The spend will be removed from the Budget Bucket and will no longer be available for capitalisation.

Filtering the Spend Map

Within the ‘Spending Tab’ of a Budget Bucket, the map window supports dynamic filtering (like the Assign tab and other map windows within the Metrix Asset Management system). The small difference with filtering in the Spend Map is that, regardless of the filter settings, the map will only ever show items that are at least assigned to the Budget Bucket. That is, the default state is for the map to show all items that are assigned to the Budget Bucket, and the filter settings will only serve to restrict within this set of items.

Using the filter within the ‘Spending Tab’ is the same as using the filter on any Metrix map component. For detailed instructions on how to use the filter, please refer to the Filtering Data documentation.