Skip to Content
author's profile photo Former Member
Former Member

ABUMN Transfer vs AIAB/AIBU Settlement as means of Capitalization from CIP/AUC

Hello.

I have a client that passes many of their non-project asset acquisitions, e.g. laptop computers, through CIP/AUC assets with subsequent transfer to the productive asset via ABUMN asset-to-asset transfer.

(I've recommended to them that they stop unnecessarily passing non-project acquisitions through CIP, but that is a different discussion).

To my thinking, and in my experience, the proper way to move cost from a CIP asset to a productive asset is via settlement. This is of course the case when CIP is collected for a project and then capitalized to a number of receivers. In the case of passing cost through individual CIP assets for large numbers of a small expenditures, it's hard to make a case for settlement as the way to go because ABUMN effectively moves cost in a much simpler way with more features.

With settlement, the user has to create the receiver asset, create a settlement rule for the sender asset, and then execute the settlement. With ABUMN transfer, they are able to automatically create the receiver or process many sender/receivers at one time. ABUMN additionally, given that it can be executed as a single step, lends itself to being executed en masse via a script.

So here's the question; given the current process, what if any, are the advantage/dis-advantages of using settlement vs ABUMN transfer?

Thanks.

Add a comment
10|10000 characters needed characters exceeded

Assigned Tags

Related questions

1 Answer

  • Posted on Aug 15, 2016 at 03:00 AM

    Hi

    Here are 2 differences for settlement and ABUMN:

    1, settlement can allocate cost to many kind of receivers e.g. cost center, IO beside asset. ABUMN normally is used between assets only.

    2, Default transfer variant and checks are suing in settlement and ABUMN, that could lead to different calculation result in target asset.

    Hope it's helpful.

    Best regards
    George

    Add a comment
    10|10000 characters needed characters exceeded

    • Former Member

      Hello George.

      Thank you for the reply.

      My question, however, is this; If we take as a given that my client will still pass non-project acquisitions through CIP and that the receivers will always be assets, is there any advantage to going with settlement versus transfer when moving cost from the CIP asset to the productive asset. For the reasons noted in my original post, ABUMN transfer seems to have significant advantages over settlement.

      The client is aware that they don't have to go through CIP for these types of purchased, e.g. laptops, desktops, servers, and ideally they would like to minimized the amount of volume flowing through CIP, but there will be purchases that will slip through and be charged to CIP. For these items, is there any advantage to settlement versus ABUMN?

      Thanks.

Before answering

You should only submit an answer when you are proposing a solution to the poster's problem. If you want the poster to clarify the question or provide more information, please leave a comment instead, requesting additional details. When answering, please include specifics, such as step-by-step instructions, context for the solution, and links to useful resources. Also, please make sure that you answer complies with our Rules of Engagement.
You must be Logged in to submit an answer.

Up to 10 attachments (including images) can be used with a maximum of 1.0 MB each and 10.5 MB total.