CF250 - DE423.01 - PA - Expensing of Costs - V1.7 - APPROVED

CF.
250 FUNCTIONAL DESIGN

SPECIFICATION
GE Wind Energy GmbH
Project Costing
GE Wind Energy ERP Implementation
DE423.01 PA Expensing of Costs
Author: Baiju Balasundaran

Creation Date: May-01-2006
Last Updated: Nov-08-2006
Version: 1.7
Approvals:
Erik Aaestrud
Michael Richter
Alfieri Francesco
Document Control
Change Record
1
Date Author Version Change Reference
May-01-2006 Baiju B 1.0 No Change Reference

May-23-2006 Altamash Qureshi 1.1 Modified the document post review from Maria Amsler
June-2-2006 Altamash Qureshi 1.2 Modified the document with new Pro rata expensing Logic
from Erik and Francesco and feed back from Maria
June-30-2006 Altamash Qureshi 1.3 Included the Revenue Model, change in project customer
scenarios and included feedback from Maria.
July-05-2006 Altamash Qureshi 1.4 Included Pro rata expensing logic for Projects with Rev Rec
Approach as ‘Partial Rev Rec-Turbine’ and Revenue Model as
Deliverables (EITF 00-21)
August-03-2006 Altamash Qureshi 1.5 Incorporated the following feedback from GE CoE
1. Accounting flow in Business Rules.
2. Incorporated handling of Reversal of Expenditure
batches and Correction/RTV of PO Expense
Receipts.
August-17-2006 Altamash Qureshi 1.6 Incorporated the changes related to the Damaged Parts
Process:
1. Expensing of the Damaged part upon Revenue
Recognition of the Project/Turbine Task.
2. Logic for obtaining the Management Component
on Miscellaneous Expenditure Batches has changed
from a Look Up to getting the information from the
DFF.
Nov-08-2006 Altamash Qureshi 1.7 Incorporated the new logic for deriving the Analytical and
Function segments.
Reviewers
Name Position
Gabor Olah
Thomas Schultze
Maria Amsler
Distribution
Copy No. Name Location

1
2
3
4
GE Infrastructure Confidential and Proprietary Page ii of 32

GE Infrastructure Confidential and Proprietary Page iii of 32
Contents
Document Control......................................................................................................................ii
Executive Summary....................................................................................................................4
Business Rules............................................................................................................................6
Assumptions..............................................................................................................................13
Solution Design........................................................................................................................14
Solution Design – Forms...................................................................................................14
Solution Design – Report..................................................................................................14
Solution Design – Interface...............................................................................................14
Solution Design – Concurrent Program............................................................................14
Solution Design – Workflows...........................................................................................14
Solution Design – Other Oracle Components...................................................................14
Process Flow.............................................................................................................................22
QFD...........................................................................................................................................27
Use Cases for Unit Testing.......................................................................................................28
Appendix...................................................................................................................................30
Open and Closed Issues for this Deliverable...........................................................................31

Open Issues........................................................................................................................31
Closed Issues.....................................................................................................................31
GE Infrastructure Confidential and Proprietary Page iv of 32

Executive Summary
GE Wind Energy GmbH manufactures wind Turbines and executes Contracts, which involve Installation,
Commissioning and Maintenance of windfarms. Project Management department executes the Installation
and Commissioning of windfarms and once the title and risk of the windfarm Project is transferred to the
customer, Services department takes over the Maintenance work. GE Wind Energy GmbH will create wind
farm as a Project and all the Turbines under the windfarm as Tasks (Financial Work Breakdown Structure).
An additional Task ‘Others’ will be created to capture the Costs, which are not directly attributable to the
Turbine. The Project thus created will serve the dual purpose of capturing the financial transactions on the
windfarm and Project Management activities during the Order to Remittance phase.
GE Wind Energy GmbH requires that all the non-Sales Order Costs booked on Turbine Task (i.e. Costs
which do not originate from the demand created by Sales Order and are linked to Project Task) should be
reflected on the Balance Sheet (capitalized) before Revenue Recognition has occurred for the Project/Task.
Once Revenue is recognized for the Project or Task, these Balance Sheet Costs should be transferred
automatically to a Profit and Loss account Project wise or Task wise respectively. In other words, non Sales
Order Costs should be shown as Capitalized Costs before Revenue Recognition and after Revenue
Recognition, these Costs should be shown as Expenses.
All non Sales Order Costs, which are not directly attributable to the Turbines (identifiable through an
additional Task ‘Others’ on the Project), should also be capitalized. However expensing of these Costs
would depend upon the Revenue Recognition approach and Revenue Model adopted for the wind farm.
The non-Sales Order Costs for a Project will comprise of Costs incurred due to Project specific Purchase
Orders for expense Items (ex: painting of Towers, Crane services, outsourced resources for Installation and
Commissioning), Expenditure batches for internal employee Cost (ex: Project Managers Cost) or
miscellaneous Costs.
Additionally, costs of the items damaged during Transportation or at Customer Site (for example slip ring,
gear box etc) will also be booked on the Project. These costs will lie as Capitalized costs on the Project and
once Revenues are booked on the Project, these Costs will be expensed along with other Costs.
Revenue Recognition for a Windfarm Project can be done either at the Project level or at the Task/Turbine
level depending upon the nature of the contract and execution timing. In addition, there are two Revenue
models, which can be followed:
Standard (SAB 104) – This model will be followed if Revenue will be recognized on a Windfarm or
Turbine entirely. The Revenue will not be recognized separately towards Equipment and Construction
Services.
Projects that have Revenue Recognition Approach at Project level, all Non Sales Order Costs, which are
attributable to the Turbine as well as ones, which are not, will be expensed once Revenues have been
booked for the Project.
Projects that have Revenue Recognition Approach at the Turbine Task level, all Non Sales Order Costs,
which are associated with ‘Others’ Task, will be expensed on Pro rata basis.
GE Infrastructure Confidential and Proprietary Page 5 of 32

The formula used for pro rata expensing will be
Deliverables (EITF 00-21) – This model will be followed if Revenues will be recognized separately for
Equipment and Construction deliverables.
For Project with Revenue Recognition Approach at Project level as well as Turbine Task level, only non
Sales Order Costs, which are attributable to a Turbine Task, will be expensed once the Equipment
Revenues are booked. Once the Construction Revenues are booked either partially or for the full amount,
non Sales Order Costs, which are not attributable to the Turbine will be expensed Pro rata.
The Revenue Model to be followed will be identified in advance at the Project level. However the Revenue
Model can be changed before Revenues have been booked for a Project.
Customer change during OTR phase
For some windfarm Projects, there is a change in customer during the OTR phase. The customer change
can take place before as well as after the first down payment.
 If customer change takes place before the first down payment, Customer information, Funding and
Revenue budget details will be updated with the new customer.
 If customer change takes place after the first down payment, a new financial Task ‘Others-Customer
change’ will be created and all new Costs, which are not directly associated with Turbine, will be
booked on this Task. Customer information, Funding and Revenue budget details will be updated with
the new customer. While expensing the Costs, which are not directly associated with Turbine, Costs
booked on ‘Others-Customer Change’ must be included along with ‘Others’ Task.
The business process for expensing of Costs mentioned is not available as an Oracle standard functionality.
The implementation of the solution for the above gap would involve Capitalization of Costs on one part and
Expensing of the same at Revenue Recognition on the other.
The first part, (i.e. capitalization of these Costs) will be achieved by customizing the Account Generator
Workflow (In case of Purchase Order for Expense Items) and by auto accounting setup (in case of
Expenditure batches).
The second part (i.e. expensing of Costs) will be automated by scheduling a custom PL/SQL package,
which would expense the capitalized Cost at month end, fortnight or weekly basis as desired by the
business. This document discusses the approach for customizing the solution for Expensing of Costs. The
first part is taken care in the solution design document for customizing the Account Generator workflow.
The document is attached in the appendix for references purposes.
This extension for expensing of Costs is a result of a GE GAP accounting requirement to match Costs and
Revenue for the period. This extension will involve integration of Projects with Purchasing and General
Ledger.

Business Rules
 All the Costs (not originated through Sales Order) for the Project prior to Revenue Recognition i.e. Requisitions
with destination type as Expense and manual expenditure batches are to be capitalized (i.e. booked as Balance
Sheet item). It applies to Costs, which are directly attributable to the Turbine and ones, which are not as well.
 At the time of Revenue Recognition for the Project or Task, these capitalized Costs to be brought into Profit and
Loss (expense) account Project or Task wise respectively depending upon whether Revenue Recognition
Approach is ‘Full RevRec-Project’ or ‘Partial RevRec-Turbine’ and whether Revenue Model is (SAB 104) or
Deliverables (EITF 00-21)
o Expensing of Costs when Revenue Recognition is done Project wise :
 Revenue Model is Standard (SAB 104)
All the Costs (both Costs directly attributable to the Turbine and not directly attributable) booked on
the Project across all Tasks should be transferred to P&L at the time of Revenue Recognition. All new
Costs booked on the Project post Revenue Recognition will be capitalized initially (i.e. Costs will be
capitalized when the receipts are booked or manual expenditure batches are created) and the custom
solution will transfer these new capitalized Costs to expense on a daily basis or as desired by the
business.
 Revenue Model is Deliverables (EITF 00-21)
Once the Equipment Revenue is booked for the Project, all non Sales Order Costs booked on Turbine
Tasks will be expensed. All new non Sales Order Costs booked on Turbine tasks will be initially
capitalized and expensed the same day or as desired by the business. Once the Construction Revenue is
booked for the Project, all the non Sales Order Costs (Costs from manual Expenditure Batches and PO
Receipts) will be booked to Cost of Sales.
o Expensing of Costs when Revenue Recognition is done Taskwise/Turbinewise (Partial Revenue

Recognition):
 Revenue Model is Standard (SAB 104)
For Projects, which require Partial Revenue Recognition i.e., Revenue Recognition is done Turbine
wise; Costs that should be simultaneously expensed can be categorized as:
 Costs booked on Turbine Tasks: This includes receipts booked in purchasing with
destination type as Expense and preapproved expenditure batches entered directly in Projects.
Prior to Revenue Recognition these Costs will lie as capitalized Costs and once Revenue
Recognition is done, these Costs should be expensed. All the new receipts booked after
Revenue Recognition will be booked with capitalization account and the custom solution will
transfer these new capitalized Costs to Expense on a daily basis or as desired by the business.
 Costs booked on ‘Others’ Tasks: These include all Costs booked on ‘Others’ Task and lying
in capitalization account. These are Costs that are not directly attributable to Turbines for
example ‘balance of plant’ Costs, Installation & Commissioning, Transportation etc.
 Once Revenue Recognition is done for the Turbine(s), the costs booked on ‘Others’
Task should be expensed on pro rata basis Turbine wise.
 If Revenue Recognition is already done for all the Turbine Tasks on the Project and
still some new Costs are booked on ‘Others’ Tasks, then no Pro rata expensing to

occur as Revenue for all Turbine Tasks has already been recognized and these new
Costs to be expensed the same day or as desired by the business.
 Revenue Model for a Project cannot be changed once the Revenues have been booked.
 If the customer change takes place for a Project after the first down payment invoice, a new financial Task
‘Others-Customer Change’ must be created and all subsequent Costs, which are not directly associated with
Turbine, must be booked on this new Task.
 ‘Customer at Top task’ feature will always be used while creating a new Contract Project. This will facilitate
change of customer for the Project during the OTR phase.
 During the OTR phase, Customer change for a Project will not happen once the Revenues have been booked.
 Revenues for Projects with Revenue Model as Standard (SAB 104) will always be booked with Milestone Type
‘Standard Revenue Milestone’ and for Projects with Revenue Model as Deliverables (EITF 00-21) will always
be booked with Milestone Types Equipment Revenue and Construction Revenue.
 Costs of items, which get damaged either during Transportation or at Customer site, will be booked on the
Project. However, Costs of items, which get damaged during manufacturing process, will be booked as GSCM
Costs.
 In the event a damaged item is returned from Manufacturing or Services, an Account alias issue transaction
(Transaction Type will be Damaged Parts Issue) will be done for reducing the On Hand Quantity of the
damaged item. This will also transfer the cost of the item to a Capitalization account. A new item (with suffix –
D for damaged) will be created with Standard Cost as Zero and Account Receipt will be created for this new
item, which will increase the on hand quantity without impacting the Cost.
 While booking the Miscellaneous Expenditure Batches the Management Component will be entered manually
by the user for each Expenditure line. This account will be picked for deriving the Management component for
the Liquidation accounts, which get credited.
 This customization for Expensing of Costs should be restricted by Operating Unit through a custom profile
option.
The accounting flow for expensing of Costs is summarized below:

Accounting flow of expensing of Costs when Revenue Recognition is done Project wise :
Accounting flow of expensing of Costs when Revenue Recognition is done Task wise/Turbine wise
(Partial Revenue Recognition):

Segment wise business rules from Account Code Combination Logic:
1) Legal Constant Value PS0114
Entity:
2) Account: Map from table based on Expenditure Type selected on distribution
line. Mapping excel attached in appendix. (12 digits)
3) Function: ***For the Debit Line use PS PA FUNCTION (P and L) RULE'. Value
should be '542'
***For the Credit Line use 'PS PA FUNCTION (Bal Sheet) RULE'.
Value should be '000'
4) Analytical: ***For the Debit Line use 'PS PA ANALYTICAL (P and L) RULE’.
Value should be 'V'.
***For the Credit line use 'PS PA ANALYTICAL (Bal Sheet) RULE’.
Value should be '0'.
5) Component For PO Receipts Map appropriate component code based on “Project
: Owning Org”. (5 digits)*
For manual expenditure batches a look up will be created to map
expenditure type with expenditure type class as ‘Miscellaneous’ with a
component value, as the component value will depend upon the
expenditure type used. **
6) Intercompa Always 000000 (6 digits)
ny:
7) Res1: Default as ‘0’ (1 Zero)
8) Res2: Default as ‘0’ (1 Zero)
*** In Case of Reversal of Expenditure Batches, Transfer of Expenditure Batches from the Project being
expensed, Receipt Correction, Return to Vendor transaction, the Expensing of Customizations reverses the
entries i.e it debits the Capitalization Accts and Credits the Expense Accounts. The Analytical and
Management component must move appropriately with these Natural Accounts (Logic should be reverse
from what is mentioned in the table above).
*For PO Receipt Cost a look up will be created for Project Owning Organization mapped with component
segment for picking the appropriate component value.
For Miscellaneous Expenditure Batches, the Management Component will be derived from the DFF for
the Expenditure Line, as the Liquidation account credited is to be booked on the Management
Component to which the Employee belongs.

Accounting Look Up Set
Accounting look up set would be created to hold the mapping of the Expenditure types to Expense
accounts.

Assumptions
 In case of Partial Revenue Recognition, Revenue will not be booked piecemeal for Turbine i.e. there
will be only one Revenue milestone for a Turbine.
 The value for classification ‘Revenue Recognition Approach’ cannot be modified once the Project
status is changed to ‘Active Billable’ and Revenue has been recognized for one milestone.
 If the classification ‘Revenue Recognition Approach’ is set to ‘Partial RevRec-Turbine Level’ for the
Project, Revenue milestones must be defined Task wise/Turbine wise.
 The System will not take care of automatic expensing of capitalization transactions entered directly in
General Ledger as manual journal entries.
 Other than the source of capitalized costs originating from Requisitions for items of type expense and
Internal employee cost no other sources needs to be considered for solutioning of Pro rata expensing.
For example, No manual Payable invoices will be created for a Project and Task without a
corresponding Purchase Order and subsequent Receipt.
 Projects which have Revenue Model as Deliverables (EITF 00-21) and Revenue Recognition Approach
is ‘Partial RevRec-Turbine’, the Construction Service costs will ‘always’ be expensed Prorata.
 For Projects with Revenue Recognition approach as ‘Partial Rev Rec-Turbine’, Expensing of Damaged
items assigned to the ‘Others/Others-Customer Change’ Task will happen once the Revenues have been
booked for the Turbine Tasks.

Solution Design
Solution Design – Forms
Not applicable
Solution Design – Report
Not applicable
Solution Design – Interface
Not applicable
Solution Design – Concurrent Program
Not Applicable
Solution Design – Workflows
The Account Generator process in Purchasing builds a charge, budget, accrual, and variance account for each
Purchase Order, Release, and Requisition distribution based on the distribution’s expense, inventory, or shop
floor destination type.
The seeded account generator would not consider the Project information to build the charge account.
The customized Account Generator Workflow, for the item type “PO Requisition Charge Account
Generator” will be modified for the sub process called Build Project Related Account. The modification will
be done for:
 Purchase requisition for expense type of item with Project & Task information assigned
 The account to modify will depend on the type of the Project and expenditure type.
Please refer to CF250_DE422.01_PO_Account_Generator_Modification_v1.7.doc document for more details

on this Gap
Solution Design – Other Oracle Components
Expensing of Costs
(A) Expensing and Pro Rata Expensing Package – PL/SQL
A PL/SQL package would be made to incorporate the logic of expensing the Capitalized costs.
Expensing of the capitalized costs related to a Turbine (Partial) or a Wind Farm (Full) as whole would
only happen if Revenue Recognition has happened for that Turbine or Wind farm respectively. The
following logic could be used to identify if Revenue Recognition has occurred or not.

a) To identify if Full Revenue Recognition has occurred
First the package will check the classification ‘Revenue Recognition Approach’ at the Project level in
PA_PROJECT_CLASSES and PA_CLASS_CODES. If the class code for ‘Revenue Recognition
Approach’ is set to ‘Full RevRec-Project’, then Revenue Recognition for the windfarm will take place
Project wise. This value cannot be changed once Revenue has been recognized for one Revenue
milestone on the Project.
And if there exists a record in PA_DRAFT_REVENUES_ALL table with

TRANSFER_STATUS_CODE = ‘A’ then full Revenue Recognition has occurred for the Project.
b) To identify if Partial Revenue Recognition has occurred
The package will check the classification ‘Revenue Recognition Approach’ at the Project level in
PA_PROJECT_CLASSES and PA_CLASS_CODES. If the class code for ‘Revenue Recognition
Approach’ is set to ‘Partial RevRec-Turbine’, then Revenue Recognition for the windfarm will take
place Turbine wise for the Project. This value cannot be changed once Revenue has been recognized for
one Revenue milestone on the Project.
As the Revenue Recognition method is Partial, there exists a Task associated with every Revenue event.
So if there exists a record in PA_DRAFT_REVENUES_ALL table with transfer_status_code = ‘A’ for
that Project and there exists a record in PA_DRAFT_REVENUE_ITEMS for the same TASK_ID, then
Revenue Recognition has happened for the Project and Task combination (Turbine).
c) To identify Revenue Model for the Project:
The package will check the classification ‘Revenue Model’ defined at the Project level in
PA_PROJECT_CLASSES and PA_CLASS_CODES.
If the class code for ‘Revenue Model’ is set to ‘Standard (SAB 104)’ then Revenue will be recognized
on a Windfarm or Turbine entirely. All the Capitalized costs which includes the direct material costs
and construction services cost will be expensed only if Revenue has been booked for the Project.
If the class code for ‘Revenue Model’ is set to ‘Deliverables (EITF 00-21)‘ then Revenue will be
recognized separately for Equipment and Construction deliverables. Direct Material costs will be
expensed once the Equipment Revenues have been booked. Construction services costs.
d) To identify if Customer changed for the Project after downpayment invoice:
Customer at Top Task feature will be enabled at the time of Project creation. If the Customer changes for
the Project before the first downpayment is sent to the customer, Customer will be updated for the Project
and Top task. The financial work breakdown structure will remain unchanged. However if the customer
changes for the Project after the first downpayment is sent to the customer, a new financial task Others-
Customer Change will be created and customer details will be updated for the Project and Turbine tasks.
Also the first downpayment invoice will exist towards the old customer.
The subsequent solution logic will be as given below:

A. Expensing of Costs when Revenue Recognition Approach is ‘Full RevRec-Project’ and
Revenue Model is ‘Standard (SAB104)’:
o Costs booked on Turbine Tasks:
 Source of Cost: Expense PO Receipts
 Select all the PO receipts created for Expense items for the Turbine Tasks.
 From the accounting lookup set select the Expense account corresponding to Expenditure
type entered in the PO.
 Create Journal entries in the GL_INTERFACE_ALL table to debit the Expense account
and credit the capitalization account.
 All new PO receipts booked for expense items for Turbine tasks of the project post
Revenue Recognition will still be capitalized and will be brought to expense the same day
or as desired by business through this custom process.
 The PO Receipts will be flagged as ‘Yes’ once these are expensed.
 Source of Cost: Account alias Issue for Damaged items

 Select all the Account Alias Issues for the Project for Turbine Tasks with Transaction
Type as ‘Damaged Parts Issue’.
 All new Account Alias Issues for Turbine Tasks post Revenue Recognition will still be
capitalized and will be brought to expense the same day or as desired by business through
this custom process.
 The Account Alias Issues will be flagged as ‘Yes’ once these are expensed.
o Costs booked on Others/Others-Customer Change Task:
 Source of Cost: Expense PO Receipts (Balance of plant)
 Select all the PO receipts created for Expense items for the ‘Others’ Tasks.
 Source of Cost: Manual Expenditure batches (Balance of Plant)
 Select all the manual pre approved Expenditure batches booked as Miscellaneous
transactions towards Project Management hours and Installation hours which are cost
distributed and interfaced to General Ledger.
type entered in the Expenditure batch.
 All new Expenditure booked for expense items for Others of the project post Revenue
Recognition will still be capitalized and will be brought to expense the same day or as
desired by business through this custom process.
 The Expenditure batches will be flagged as ‘Yes’ once these are expensed.
 Source of Cost: Account alias Issue for Damaged items

 Select all the Account Alias Issues for the Project for ‘Others/Others-Customer Change
Tasks’ with Transaction Type as ‘Damaged Parts Issue’.
 All new Account Alias Issues for ‘Others/Others-Customer Change Tasks’ post Revenue
Recognition will still be Capitalized and will be brought to expense the same day or as
B. Expensing of Costs when Revenue Recognition Approach is ‘Full RevRec-Project’ and

Revenue
Model is ‘Deliverables (EITF 00-21)‘ :
o Costs booked on Turbine Tasks (Equipment Revenues Booked):
 Source of Cost: Account Alias Issue for Damaged items
Capitalized and will be brought to expense the same day or as desired by business through
 The Account Alias issue booked on Others and ‘Others-Customer Change’ Task will also
be expensed along with the booking of Account Alias issue booking on ‘Turbine Task’.
o Costs booked on Others/Others-Customer Change Task (Construction Revenues Booked):
 Source of Cost: Expense PO Receipts (Balance of plant)

 Source of Cost: Manual Expenditure batches (Balance of Plant)
 Select all the manual pre approved Expenditure batches booked as Miscellaneous
transactions towards Project Management hours and Installation hours which are cost
distributed and interfaced to General Ledger.
type entered in the Expenditure batch.
 All new Expenditure booked for expense items for Others of the project post Revenue
Recognition will still be capitalized and will be brought to expense the same day or as
 The Expenditure batches will be flagged as ‘Yes’ once these are expensed.
C. Expensing of Costs when Revenue Recognition Approach is ‘Partial RevRec-Turbine’ and

Revenue Model is ‘Standard (SAB104)’:
o Costs booked on Turbine Tasks (Revenue booked for the Turbine):
 The Account Alias Issue for the damaged items on ‘Others’ and ‘Others-Customer
Change’ Task will be expensed as soon as Revenues have been booked on at least one
Turbine Task.

o Costs booked on Others/Others-Customer Change Task:
 Source of Cost: Expenditure Batches and Expense PO Receipts
 Pro rata Expensing formula:
{(TCCO*TR/TW)-TCEP}
Where
TCCO = Total capitalized cost on ‘Others’ Task (PO Expense Receipts and Expenditure
batches)
TR = Total number of turbines for which Revenue is already recognized. If no Turbines
Rev Rec’d previously ‘TR’ = 1.
TW = Total number of Turbines in the wind farm
TCEP = Total cost expensed Pro Rata before this expensing run.
 Identify all the costs booked on the ‘Others’ and/or ‘Others-Customer Change’ Tasks
as Expense PO Receipts or preapproved manual Expenditure batches.
 Calculate the Pro rata expensing amounts based on the formula.
 Create Journal entries in the GL_INTERFACE_ALL table to debit the Expense
account and credit the capitalization account.
 The PO receipts and manual Expenditure batches will be NOT flagged as ‘Yes’ once
the Pro rata expensing is done as these capitalized costs will be required again for Pro
rata expensing the next month.
D. Expensing of Costs when Revenue Recognition Approach is ‘Partial RevRec-Turbine’ and

Revenue Model is ‘Deliverables (EITF 00-21)‘ :
o Costs booked on Turbine Tasks (Equipment Revenues Booked for the Turbine Task):
 The Account Alias Issue for the damaged items on ‘Others’ and ‘Others-Customer
Change’ Task will be expensed as soon as Revenues have been booked on at least one
Turbine Task

o Costs booked on Others/Others-Customer Change Task (Construction Revenues Booked
on Others/Others-Customer Change Task):
o Source of Cost: Miscellanoues Expenditure Batches and Expense PO Receipts.
 Pro rata Expensing formula:
{(TCCO*TR/TW)-TCEP}
Where
TCCO = Total capitalized cost on ‘Others’ Task (PO Expense Receipts and Expenditure
batches)
TR = Total number of turbines for which Revenue is already recognized. If no Turbines
Rev Rec’d previously ‘TR’ = 1.
TW = Total number of Turbines in the wind farm
TCEP = Total cost expensed Pro Rata before this expensing run.
 Identify all the costs booked on the ‘Others’ and/or ‘Others-Customer Change’ Tasks
as Expense PO Receipts or preapproved manual Expenditure batches.
 Calculate the Pro rata expensing amounts based on the formula.
 Create Journal entries in the GL_INTERFACE_ALL table to debit the Expense
account and credit the capitalization account.
 The PO receipts and manual Expenditure batches will be NOT flagged as ‘Yes’ once
the Pro rata expensing is done as these capitalized costs will be required again for Pro
rata expensing the next month.
(E) Handling of Expenditure Adjustments:

Adjustments may happen for both Expenditure Batches and Expense PO receipts. Following transactions
will classify as Expenditure adjustment transaction:
1. Reversal of Expenditure Batches: Expenditure batches might be reversed partially or completely as a

result of incorrect Expenditure booking. The reverse expenditure batch transaction will be used for
reversing the capitalization accounting passed while booking these expenditures.
a) If Revenue Recognition has already occurred and costs have been expensed for the
expenditure batch ‘A’, the reversal of this expenditure batch ‘A-R’ post Revenue
Recognition must also result in the reversal of the costs expensed for Expenditure Batch
‘A’. (Applicable for full and partial reversal)
b) If Revenue Recognition has not occurred and costs are lying as Capitalized costs for the
expenditure batch ‘A’ and expenditure batch is reversed, the custom program must not
expense the costs for the Batch ‘A’ and ‘A-R’. (Applicable for full and partial reversal)
2. Correction of Expense PO Receipts: Expense PO receipts may be corrected through either the ‘Return
to Vendor process’ or ‘Receipt correction Process’.
a) If Revenue Recognition has already occurred and costs have been expensed for the
Receipt ‘A’, the correction of this Receipt post Revenue Recognition must also result in the
reversal of the costs expensed for Receipt ‘A’. (Applicable for full and partial reversal)
b) If Revenue Recognition has not occurred and costs are lying as Capitalized costs for the PO
Receipt ‘A’, expensing of cost should not happen for both the receipt and receipt correction.
(Applicable for full and partial reversal)

Process Flow
Expensing of Cost Level 1:
(A). Expensing of Costs based on RevRec status of Project when Revenue Model is Standard (SAB104):

(B). Expensing of Costs based on RevRec status of Project when Revenue Model is Deliverables (EITF 00-21):

(C). Expensing of Costs based on RevRec status of Turbine when Revenue Model is Standard (SAB104):

(D). Expensing of Costs based on RevRec status of Turbine when Revenue Model is Deliverables (EITF 00-21):

QFD
Not Applicable

Use Cases for Unit Testing
Below defines the steps needed to be executed using the Excel Test Data Matrix.
For each record in the Excel Test Data Matrix, follow the below steps. The result of the Test should be in line with
the ‘Test Case Results’ columns defined in the Matrix.
Step 1: Create multiple Contract Projects, which contain the parameters in the ‘Project Status’, ‘Revenue
Recognition Approach’ and Revenue Model
o Revenue Recognition Approach: Different contract Projects need to be created. Projects with
classification ‘Revenue Recognition Approach’ value set to ‘Full RevRec – Project level’ will be
Projects for which Revenue Recognition will be done Project wise and with values set to ‘Partial
RevRec – Turbine Level’ will be for Projects for which Revenue recognition will be done Project task
wise.
o Revenue Model: Some Projects to be created with Revenue Model as Standard (SAB 104) and others
with Revenue Model as Deliverables (EITF 00-21). Costs will be expensed separately towards
‘Equipment Revenue’ and ‘Construction Revenue’ when Revenue Model is Deliverables (EITF 00-21).
Costs will be expensed only after Installation and Commissioning is done when the Revenue Model is
Standard (SAB 104).
o Project Status: Projects with status either as ‘Active-Billable’, ‘Pending Close’ or ‘Closed’ will be
considered eligible for accrual booking. Projects with statuses other than these will be excluded.
o Customer Changed for the Project: Customer changes for some Projects during the OTR phase. The
customer will be defined for the Project at the Top Task level at the time of Project creation.
o Customer changed after first downpayment: Customer change can happen before or after the first
downpayment invoice is raised. If customer changes after the first downpayment invoice, a new
financial Task ‘Others-Customer change’ will be created with the new customer and all the new
indirect costs will be booked on this Task.
Step 2: Create a Revenue Event with a Turbine Task defined on the Revenue Event based on the ‘Revenue Event
Turbine Task’ column. For Projects with Revenue Model as Standard (SAB 104) create Revenue events with Event
type as ‘Standard Revenue Event’ and for Project with Revenue Model as Deliverables (EITF 00-21) create
Revenue events with Event Type as ‘Equipment Revenue’ and ‘Construction Revenue’. After generating the
Revenue line, the status should be as indicated in the ‘Status of the Revenue Line’ column
o Revenue Event Turbine Task: For Projects which will have Revenue Recognition done at the Turbine
Task level, a Project Task (Turbine Task) must be entered while entering the Revenue Recognition
milestone.
o Revenue Milestone Type: Revenues for Projects with Revenue Model as Standard (SAB 104) will
always be booked with Milestone Type ‘Standard Revenue Milestone’ and for Projects with Revenue
Model as Deliverables (EITF 00-21) will always be booked with Milestone Types Equipment Revenue
and Construction Revenue.
o Status of the Revenue line: The draft Revenue generated for a Project or Project Task will have status
as ‘Unreleased’. Once the draft Revenue details are found correct, the Revenue status can be changed
manually to ‘Released’. Once the released Revenue details are interfaced to GL tables, imported and
tied back to Projects, the Revenue status changes to ‘Accepted’. Only the new ‘Released’ and
‘Accepted’ Revenue lines for the day will be eligible for pro rata expensing of cost.

Step 3: Book costs on the Project through Manual Expenditure Batches and Expense PO Receipt with parameters
as mentioned in ‘Preapproved Expenditure Batch status’ and ‘Expense PO Receipt Created’. The Expenditure
batches created must be Cost distributed and interfaced to General Ledger as per parameter mentioned in ‘Cost
Distribution and Interfacing of Exp Batch’.
o Preapproved expenditure batch status: One of the sources of non-attributable costs will be an
expenditure batch entered manually in Projects. These costs will be booked towards Project
Management efforts and Installation.
o Cost distributed and interfaced to general ledger: All the manual expenditure batches must also be
cost distributed and interfaced to general ledger to be eligible for pro rata expensing of cost.
o Receipt created: Receipts will be another source of non-attributable costs booked on a Project.
o Reversal of Expenditure Batch (Either Partial or Full): The Expenditure batches booked in Projects
for booking the GE Employees efforts Costs might be reversed Partially or Fully for
correcting/adjusting these costs.
o RTV or Correction Transaction on Expense Receipt: The Expense PO receipts booked can be
corrected or Return to Vendor transaction might be carried out for adjusting the receipt.
Step 4: Create an Account Alias Issue for a damaged item in Inventory with the Transaction Type as ‘Damaged
Parts Issue’ for the Project.
o Account Issue for Damaged Items with Transaction Type as Damaged Parts Issue: The Account
issue will reduce the On hand Quantity for the damaged item. The custom Expensing of Costs program
will transfer the capitalized costs to Cost of Quality expense once the Revenues are booked.
Step 5: Test Output: Accounting entries should be generated from the custom solution in GL interface tables
based on ‘Costs on Turbine Tasks Expensed’, ‘Pro Rata Expensing Done’ and ‘Costs on 'Others' /'Others-Customer
Change Task' Expensed’
o Turbine cost expensed: Accounting entries generated and interfaced to GL towards non-Sales order
Costs booked on Turbine Tasks.
o Pro Rata Costs expensed: Accounting entries generated and interfaced to GL towards non-Sales order
Costs booked on ‘Others/Others-Customer change’ Task, which are to be expensed Pro rata. The will
take place only for Projects which have Revenue Recognition approach as ‘Partial RevRec-Turbine’
and Revenue Model as Standard (SAB 104).
o Costs on 'Others' /'Others-Customer Change’ Task Expensed: Accounting entries generated and
interfaced to GL towards non-Sales order Costs booked on ‘Others/Others-Customer change’ Task,
which are to be expensed once Revenues are booked.
o Cost of Account Alias Issue of Damaged Parts Expensed: Accounting entries generated and
interfaced in GL for the Account Alias Issues with Transaction Type as ‘Damaged Parts Issue’ for the
Project.
Test script cases attached:
"Test Script for

Expensing of Costs1.xls"

Appendix
1
"IC accounting.xls"
1. Installations and Commissioning Accounting:
"Expenditure
Types.xls"
2. Expenditure type-Natural Account Look Up Mapping Sheet:
"Expensing of cost
and ECA sheet.xls"
3. Expensing of Cost and ECA excel sheet:
"F00020 PA accounts
P&L-Balance.xls"
4. F00020 PA accounts P&L-Balance.xls
"Components for
expenditure batches.xls"
5. Components for expenditure batches.xls

Open and Closed Issues for this Deliverable
Open Issues
Issue Resolution
Is Project Manager’s cost or internal installation team ever booked on a turbine

task?
COQ expense account required for damaged items.
Closed Issues
Issue Resolution
How will the expensing of cost process handled if the customer changes for the Customer at Top Task approach to be adopted for every Project at the time
wind farm after first downpayment? of Project creation.
Will Revenue Recognition ever happen for ‘Other’ Task? If yes then what will be For Projects which have Revenue Recognition approach as Full RevRec-
the various scenarios and what will be the accounting flow behind it? Project, Revenue events will always be created on the ‘Others’ or ‘Others-
Customer change’ Task. Also whenever the Revenue Model is
Deliverables (EITF 00-21), Construction Revenues will be booked on
Others/Others-Customer Change Task.
Capitalization and expense accounts to be mapped with expenditure types defined Mapping between the accounts complete
in Projects.

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CF.

250 FUNCTIONAL DESIGN

Author: Baiju Balasundaran

Date Author Version Change Reference

May-01-2006 Baiju B 1.0 No Change Reference

Copy No. Name Location

GE Infrastructure Confidential and Proprietary Page ii of 32

Use Cases for Unit Testing.......................................................................................................28

Open and Closed Issues for this Deliverable...........................................................................31

GE Infrastructure Confidential and Proprietary Page iv of 32

GE Infrastructure Confidential and Proprietary Page 5 of 32

Customer change during OTR phase

GE Infrastructure Confidential and Proprietary Page 6 of 32

o Expensing of Costs when Revenue Recognition is done Project wise :

 Revenue Model is Standard (SAB 104)

 Revenue Model is Deliverables (EITF 00-21)

o Expensing of Costs when Revenue Recognition is done Taskwise/Turbinewise (Partial Revenue

 Revenue Model is Standard (SAB 104)

GE Infrastructure Confidential and Proprietary Page 7 of 32

The accounting flow for expensing of Costs is summarized below:

GE Infrastructure Confidential and Proprietary Page 8 of 32

GE Infrastructure Confidential and Proprietary Page 9 of 32

GE Infrastructure Confidential and Proprietary Page 12 of 32

GE Infrastructure Confidential and Proprietary Page 13 of 32

GE Infrastructure Confidential and Proprietary Page 14 of 32

Solution Design – Report

Solution Design – Interface

Solution Design – Concurrent Program

Solution Design – Workflows

Please refer to CF250_DE422.01_PO_Account_Generator_Modification_v1.7.doc document for more details

Solution Design – Other Oracle Components

(A) Expensing and Pro Rata Expensing Package – PL/SQL

GE Infrastructure Confidential and Proprietary Page 15 of 32

And if there exists a record in PA_DRAFT_REVENUES_ALL table with

b) To identify if Partial Revenue Recognition has occurred

d) To identify if Customer changed for the Project after downpayment invoice:

The subsequent solution logic will be as given below:

GE Infrastructure Confidential and Proprietary Page 16 of 32

o Costs booked on Turbine Tasks:

 Source of Cost: Expense PO Receipts

 Source of Cost: Account alias Issue for Damaged items

o Costs booked on Others/Others-Customer Change Task:

 Source of Cost: Expense PO Receipts (Balance of plant)

 Source of Cost: Manual Expenditure batches (Balance of Plant)

 Source of Cost: Account alias Issue for Damaged items

GE Infrastructure Confidential and Proprietary Page 17 of 32

B. Expensing of Costs when Revenue Recognition Approach is ‘Full RevRec-Project’ and

o Costs booked on Turbine Tasks (Equipment Revenues Booked):

 Source of Cost: Expense PO Receipts

 Source of Cost: Account Alias Issue for Damaged items

o Costs booked on Others/Others-Customer Change Task (Construction Revenues Booked):

 Source of Cost: Expense PO Receipts (Balance of plant)

GE Infrastructure Confidential and Proprietary Page 18 of 32

C. Expensing of Costs when Revenue Recognition Approach is ‘Partial RevRec-Turbine’ and

o Costs booked on Turbine Tasks (Revenue booked for the Turbine):

 Source of Cost: Expense PO Receipts

 Source of Cost: Account Alias Issue for Damaged items

GE Infrastructure Confidential and Proprietary Page 19 of 32

 Source of Cost: Expenditure Batches and Expense PO Receipts

 Pro rata Expensing formula:

D. Expensing of Costs when Revenue Recognition Approach is ‘Partial RevRec-Turbine’ and

 Source of Cost: Expense PO Receipts