Item Level Spending Summary

The Item Level Spend Summary provides users with an overview of how the combination of Capital Spends (Global and/or Linked) and Capitalisation Shares breakdown against the Budget Bucket Items within their project. The following information is provided, per Budget Bucket Item:

• Component - This is the Metrix Record ID (component ID) of the Budget Bucket Item.
• Issues - This is a flag to indicate whether any issues are anticipated in regard to applying capitalisation transactions to the underlying Component. See Capitalisation Issues for more information.
• Value - This is the total value of the Capital Spends (Global and/or Linked) that are calculated as associated with the Budget Bucket Item. This has been weighted by the Item’s Cost Units value.
• Renewal Share - This is the amount of the Value that will be directed to a Renewal Transaction Type during final capitalisation.
• Upgrade Share - This is the amount of the Value that will be directed to an Upgrade Transaction Type during final capitalisation.
• New Share - This is the amount of the Value that will be directed to a New Transaction Type during final capitalisation.

The above information can be very useful in assessing the general outcome of a pending capitalisation process.

Transaction Posting History

The Transaction Posting History provides users with an overview of the history of transactions that have been posted to the Financial Transaction Ledger within Metrix for the Budget Bucket. In most cases, this will be a single processing batch associated with the final capitalisation of the Capital Spends, however, more batches may exist if the works were processed to WIP (Works in Progress) during the life of the project.

The following information is provided, per Budget Bucket Component Item:

• Component - This is the Metrix Record ID (component ID) of the Budget Bucket Item.
• Finance Category - The Finance Category that the transaction was capitalised against.
• Transaction Type - The Transaction Type that the transaction was capitalised against.
• Effect - The effect (Gross or Accumulated Depreciation) of the Transaction Type.
• Posting Date - The date that the transaction was posted to the Financial Transaction Ledger.
• Value - This is the SUM of the transaction values that were posted to the Financial Transaction Ledger for the Budget Bucket Item, for the selected Finance Category and Transaction Type.

The presence of a Transaction Posting History entry confirms that some or all of the Capital Spends associated with the Budget Bucket will be locked for editing. That is, once a transaction has been posted to the Financial Transaction Ledger, the Capital Spends associated with the Budget Bucket Item will be locked for editing.

Capitalisation Issues

During the capitalisation process, Metrix is able to identify a number of issues that may prevent the successful processing of Capitalisation Transaction batches (including WIP). The following provides some detail to the types of issues that may be detected and how to resolve them.

Missing Cost Unit Values Cost unit values are essential for calculating a budget item’s proportionate share of all global spend values, as well as any linked spend values where the spend is linked to more than 1 item.

Without a cost unit value, the system will calculate a zero spend value share for the affected item(s).

Missing Construction Date Values Construction date values are required attributes for any Component receiving capitalisation transactions. This is to ensure that any required depreciation events are calculable.

Without a construction date value, the system will NOT be able to process capitalisation transactions for the affected item(s).

Missing Finance Category Values Finance category values are required attributes for any Component receiving capitalisation transactions. This is to ensure that a valid Finance Category can be assigned to a Component’s first capital transaction.

Without a finance category value, the system will NOT be able to process capitalisation transactions for the affected item(s).

WIP Transactions

During the life of a project, things don’t always go to plan. Timelines can slip, and projects may need to be carried over to the next financial period (or, the project just might be massive in nature, and it is unavoidable that it will span multiple periods). In these cases, it is important to be able to track the costs associated with a project, and see those costs reflected in the financial statements of the organisation when periods roll over. This is where WIP (Work in Progress) transactions come into play.

What are WIP Transactions

A WIP transaction is a special type of transaction that allows you to capitalise costs associated with a project against the underlying Bucket Component Items, without having to consider any other capitalisation impacts such as disposal, impairment, or the effect on accumulated depreciation.

The Transaction Type for WIP Transactions is called ‘WIP Transfers’.

WIP transactions behave just like a regular transaction in that they are protected by the rules of the Capital Transactions Ledger, they exist within a single reporting period, are ascribed to a Finance Category, and will impact the Fair Value of the underlying Component. The one exception to the ’normal’ suite of rules is that WIP transactions can be posted against Components that have a status of ‘Proposed’. That is, a Component that is not yet commissioned, may receive WIP transactions to carry value prior to final commissioning.

The above compliance with the rules of the Capital Transaction Ledger rules is why you will still be required to provide a valid Posting Data and Finance Category when generating WIP transactions. Note; the Finance Category is only required for Components that do not currently have any entries in the Capital Transactions Ledger.

What happens to WIP Transactions after Final Capitalisation

When a project is completed, and the final capitalisation occurs, the WIP transactions that have been posted against each Component (by the current Budget Bucket) are summed up and the total value is ‘rolled back’ against each item. The following table outlines how this process may look from the perspective of a single Component Item:

As shown above, the WIP transactions that were posted against the Component Item over several years are rolled back at the time that the Final Capitalisation occurs. The same value that is rolled back, is then added to the Component Item using the Capitalisation methodology defined for the Budget Bucket. In this case, it was ‘Installation’, reflecting 100% New Capitalisation shares.

Capitalisation Transactions

At the end of a Capital Project, the costs that have been incurred need to be capitalised against the underlying Component Items. This is done in the Metrix Asset Management system using Capitalisation Transactions. The process of generating (and applying) capitalisation transactions causes the following:

• The Budget Bucket will be closed/locked.
• The cost of works (sum total of Capital Spends) will be transferred to the Capital Transactions Ledger.
• A transaction batch summary will be created against the Budget Bucket.

It is in point 2 above that the bulk of the capitalisation work occurs. When the value is transferred to the Capital Transactions Ledger, the following considerations are taken into account:

• Any disposal/impairment of existing Component carrying value is measured and applied (see Renewal Methodologies below).
• Any effect on accumulated depreciation is measured and applied (see Renewal Methodologies below).
• Any effect on the gross replacement cost of the Component is measured and applied.
• Components are seeded with a Finance Category (in the case that they do not already exist within the Capital Transactions Ledger).

Renewal Methodologies

For Capital Spends that have any Capitalisation Shares that are attributed to ‘Renewal’, consideration must be given to how the system will process any existing carrying value of the underlying Component Item(s). The system does this through the implementation of ‘Renewal Methodologies’.

Renewal Methodologies are essentially a set of rules that define how the system treats existing gross value and accumulated depreciation value when capitalising renewal spends against a Component Item. Given the complexity of these methodologies, only one is discussed here. For a full breakdown of the available Renewal Methodologies, see the ‘Renewal Method Examples’ within your Metrix Application.

An example Renewal Methodology, for the purposes of explaining the type of things they control, is the ‘Disposal Method’. When capitalisation transactions are generated under the ‘Disposal Method’, the system will do the following:

• When the Component’s Spend Share value exceeds its accumulated depreciation value, but not its gross value:
  • The system will generate ‘Disposal’ transactions to accelerate the accumulated depreciation value up to that of the Spend Share value, or the gross value of the Component (whichever is less).
  • The system will then generate a ‘Renewal’ transaction to capitalise the Component’s Spend Share value against the accumulated depreciation of the Component. Essentially, reversing the accumulated depreciation value.
• When the Component’s Spend Share value exceeds its gross value:
  • Firstly, the system performs the above process to allocate as much of the spend as possible to the accumulated depreciation value of the Component.
  • The remainder of the Spend Share value is then capitalised against the gross value (as another ‘Renewal’ transaction) of the Component.

Again, this is a very simplistic example of how the system treats existing carrying value and accumulated depreciation. See the ‘Renewal Method Examples’ within your Metrix Application for a full breakdown of the available Renewal Methodologies.

Batch Deletion

From time to time, you may need to ‘undo’ some work you have previously completed. If this involves the existence of Capitalisation or WIP transaction batches, then you will need to properly delete these batches in order to continue. The Metrix Asset Management provides support for such operations, to adequately privileged users. This section outlines exactly ‘what’ happens to the transactions when you delete a batch.

When you delete a batch of transactions from a Budget Bucket, the following events occur:

• The transaction entries are marked as inactive within the Capital Transactions Ledger.
• The related Capital Spend entries will be unlocked - so they can now be edited.
• Any Bucket Items that were associated with the transaction entries will also be unlocked - so they can now be removed.

Capitalise to WIP

To generate and post transactions to WIP, you will need to have navigated to the relevant Budget Bucket, and entered the ‘Capitalisation’ tab. At this point, it is assumed that you have already posted the required Capital Spends against the Budget Bucket.

To generate WIP transactions, perform the following steps:

1. At the top of the Capitalisation tab page, there is an ‘Actions’ button (denoted by three dots). Click on this button to reveal a dropdown menu and choose ‘Generate WIP Transactions’ from the menu.

2. A dialog window will appear asking for some basic information required to generate the transaction batch, include:

   • Posting Date: The date the transaction will be posted to WIP. This date must be within the current financial period.

3. Once the above requirements have been satisfied, click ‘Generate’.

   Info

   Clicking ‘Generate’ will NOT post any transactions to the Capital Transactions Ledger. This merely generates a temporary batch of transactions and returns them for you to review. Repeating this step (at another time) would generate a different batch of transactions for review.

4. The generated transactions will be returned and displayed in a table format, with a summary at the top. The summary will show the total value of transactions that were generated per Transaction Type (which will be just the ‘WIP Transfer’ type). Above the summary, the following options will be available:

   • Post WIP Transactions: This will post the transactions to the Capital Transactions Ledger. The transactions will be posted with the Posting Date you specified in the previous step. Click this button to post the transactions.
   • Download as CSV Template: This will export the transactions to a CSV file. The CSV file will contain all the details of the transactions, including the Posting Date and Finance Category. This file is compatible with the Metrix transaction import style. Click this button to download the CSV file (you will need to manually import the file in order to process the transactions).
   • Regenerate: This will regenerate the transactions - giving you a chance to change some inputs.

Capitalise to Transactions

To generate and post capitalisation transactions, you will need to have navigated to the relevant Budget Bucket, and entered the ‘Capitalisation’ tab. At this point, it is assumed that you have already posted the required Capital Spends against the Budget Bucket.

To generate capitalisation transactions (and subsequently close the budget bucket), perform the following steps:

1. At the top of the Capitalisation tab page, there is a ‘Generate Transactions & Close Budget’ button. Click on this button.

2. A dialog window will appear asking for some basic information required to generate the transaction batch, include:

   • Posting Date: The date the transaction will be posted to WIP. This date must be within the current financial period.

   • Renewal Methodology: In the case that the Budget Bucket has any Capital Spends with a Renewal Capitalisation Share, you will need to select a predefined Renewal Methodology. This will be required to generate the transactions in cases where this applies.

     To see additional information about available Renewal Methods, click on the ‘Renewal Method Examples’ button at the top of the dialog window.

3. Once the above requirements have been satisfied, click ‘Generate’.

   Info

   Clicking ‘Generate’ will NOT post any transactions to the Capital Transactions Ledger. This merely generates a temporary batch of transactions and returns them for you to review. Repeating this step (at another time) would generate a different batch of transactions for review.

4. The generated transactions will be returned and displayed in a table format, with a summary at the top. The summary will show the total value of transactions that were generated per Transaction Type. Above the summary, the following options will be available:

   • Post Transactions & Close Budget: This will post the transactions to the Capital Transactions Ledger. As the button label implies, it will also mark the Budget Bucket as closed. Click this button to post the transactions.
   • Download as CSV Template: This will export the transactions to a CSV file. The CSV file will contain all the details of the transactions, including the Posting Date and Finance Category. This file is compatible with the Metrix transaction import style. Click this button to download the CSV file (you will need to manually import the file in order to process the transactions).
   • Regenerate: This will regenerate the transactions - giving you a chance to change some inputs.

Delete a Batch

From time to time, you may need to ‘undo’ some work you have previously completed. If this involves the existence of Capitalisation or WIP transaction batches, then you will need to properly delete these batches in order to continue. To delete a batch of transactions from a Budget Bucket, perform the following steps:

1. Navigate to the relevant Budget Bucket and enter the ‘Capitalisation’ tab.

2. Any existing transaction batches will be displayed in the upper portion of the Capitalisation tab page. In the upper-right hand corner of each transaction batch, there is a trash can icon. Click on this icon to delete the relative transaction batch.

3. A dialog window will appear asking you to confirm the deletion. It will also provide detail as to the potential consequences of deleting the transaction batch (in monetary terms). Click ‘Confirm Deletion’ to delete the transaction batch.

Assigning Finance Categories

Before you can generate transactions, you will need to ensure that any Components without a Finance Category are nominated with a valid Finance Category. Note; this will be any Components that have yet to receive a Capital Transaction in the past.

To assign Finance Categories to Components, perform the following steps:

1. Navigate to the relevant Budget Bucket and enter the ‘Capitalisation’ tab.
2. If any Budget Bucket Items exist without a Finance Category, an entry in the Capitalisation Issues error block will appear. You will also see an option to ‘Set Finance Categories’ at the top of the section.
3. Click on the ‘Set Finance Categories’ button to open a dialog window.
4. A dialog window will appear with a list of all Budget Bucket Items that do not have a Finance Category assigned. You can select the Finance Category for each Budget Bucket Item from the dropdown list. Alternatively, you can select one (1) Finance Category to apply to all Budget Bucket Items.
5. Once you have selected the Finance Categories, click ‘Save’ to apply the changes.
6. The dialog window will close, and the Capitalisation Issues error block will refresh to show that the Finance Categories have been successfully assigned.