Understanding the Asset Under Construction Process

The Bike Company has decided to make welding jobs more attractive, employee-friendly, accurate, and effective. To achieve this, a new welding cell is to be constructed.

A welding cell consists of individual elements, such as roll gates, the welding table, two axis manipulators, control element, welding smoke cleaner, burner cleaner, and welding system. Until the welding cell is complete, the components are managed as assets under construction (AuCs).

Kevin’s job is to support this project.

First, Kevin wants to familiarize himself with the basic lifecycle of an AuC.

Let's look at the summary of the process:

1. The asset under construction is generated by assigning an investment profile to the project or work breakdown structure (WBS) element and upon releasing the project or WBS element.
2. All, or part, of the costs must be settled to the asset under construction.
3. If it is not possible to activate parts of the costs incurred on the WBS element, maintain a settlement rule. If a settlement rule is not set, everything is automatically settled to the assigned AuC.
4. When the asset under construction is complete, master records are created. The settlement rule is maintained. Full settlement credits the AuC and debits the new assets.

Kevin notes down a summary on his tablet.

Costs can be planned, posted, monitored, and settled to fixed assets on investment projects.

When you assign an investment profile to the project or WBS element and release the WBS element, the asset under construction is generated automatically. By default, when you create an investment project, a single WBS element is also created (with the same name coding).

Let’s take a quick look at the project (and WBS element) statuses and the associated allowed business transactions.

At the start of a project, the project is assigned the status CREATED. At this phase, only postings related to planning are allowed.

When the status of the project changes to RELEASED, commitments and actual postings are also allowed. At this phase, an AuC is automatically created and assigned.

When the project status is set to COMPLETED, it is no longer possible to edit the project (or associated WBS elements). This also blocks all postings to the project and deactivates the AuC.

In the case of large projects, it is generally not sufficient to use a project with a single WBS element. You can create multiple WBS elements with reference to the same project. These WBS elements help subdivide the project and can collect the costs separately. Each WBS element can be linked to separate AuCs by managing their investment profile.

The investment profile contains the asset class that the system uses to generate the asset.

If a WBS element is not linked to an investment profile, no AuC is created.

When the project is completed, it can result in one or more final fixed assets.