Investment Project Accounting in Microsoft Dynamics 365 Finance and Operations – Part II
In Part I, we covered the key setup and configuration for two types of investment project. This post focuses on the transactional flow — posting various transactions on an investment project and later eliminating to acquire a fixed asset.
Posting Transactions
Post transactions such as hours against the project.
With an investment project where cost is posted directly to P&L, D365 F&O debits your account (typically P&L) with the posting type as project cost.
When using the WIP approach, cost is posted to the balance sheet.
To record other project transactions such as vendor invoices for capturing expenses, use a vendor invoice journal with the project specified as the offset.
Running the Estimation Process
Run an estimation spanning all project transactions to ensure cost capitalisation (when using cost directly to P&L) and to prepare for elimination.
Review information in the key tabs: Profit and loss, WIP, and Consumption.
For cost posting directly to P&L:
For cost posting to WIP:
Configuring Elimination Options
Before posting the estimate, ensure the elimination options are specified. In this example, we are eliminating to a fixed asset — a common scenario where cost is collected over time to build an asset such as a building or machinery.
Note: Posting of the estimate does not acquire the fixed asset.
Posting the Estimate
Post the estimate and review the voucher entries generated:
- The voucher will be blank if cost was posted directly to P&L and the line property does not allow cost capitalisation in the WIP setting — the fixed asset would be acquired at zero value. You would need to adjust project transactions to update the line property.
- The voucher will contain values when posting to P&L and using a line property with cost capitalisation.
- The voucher will also contain values when using the WIP option.
Tip: Always use a line property that allows cost capitalisation with investment projects.
Eliminating the Estimate
Once all project activities are complete, eliminate the posted estimate. The project must be 100 percent complete to run elimination.
The estimate elimination process creates the fixed asset acquisition.