Investment Project Accounting in Microsoft Dynamics 365 Finance and Operations – Part I
There are two ways of defining project postings when using an investment project in Dynamics 365 Finance and Operations. The approach is defined in the Project group and impacts the way accounts and posting types are used in transactions, estimation, and elimination.
Option 1: Cost with WIP (Cost to Balance Sheet)
This is the most widely used option for investment projects. All costs are accrued to the balance sheet using WIP and later moved to another project or a fixed asset.
Option 2: Cost Directly to P&L
This option is for specific scenarios where cost gets accumulated in one P&L account and later eliminated to another P&L account.
Prerequisites
The following key setup must be in place before working with investment projects: Project groups, Ledger posting profile, Project category, Investment project, Estimate project, Asset, Fixed asset group, Fixed asset, and Resources.
Creating Investment Projects
Create two investment projects — one using WIP and one without.
An estimate project is also assigned to the investment project. This is used to later eliminate the entire cost of the investment project to one of the following:
- Fixed asset
- Project
- Ledger account
Category Validation
If using category validation, ensure the required categories are allowed to be used on the investment project.
With key setups and decisions in place, the transactional flow is covered in Part II.