Capital planning is an integral part of an organization’s annual planning and forecasting process and a key module in Oracle Enterprise Planning and Budgeting Cloud Service (EPBCS). Capital planning considers the capacity of existing resources to support operations and the capital assets needed for expansion.
The process flow is as follows:
Existing Assets
Recognize and plan for expenses related to the repair, insurance, and maintenance of current assets. Modify and plan existing leased assets. Recognize retirements, sales and transfers of existing assets and their effect on the P&L statement.
Intangibles
Plan for new and existing intangibles and impairments. Review amortization effects on P&L and Balance Sheet.
Investment Planning
Analyze cost versus lease to determine best investment actions. Utilize tools to examine cash flow planning and funding for investments. Drill down into the depreciation and amortization expenses to reveal associated tangible and intangible assets.
Analysis
Review financial statement impact and analyze variances across pertinent scenarios. The Capital module includes standard dimensions out of the box. Administrators can also enable optional dimensions to track capital by project and vendor, if needed. The dimensions are:
- Accounts
- Entity
- Year
- Period
- Scenario
- Version
- Currency
- Asset Class
- Asset Detail
- Custom 1 (Project)
- Custom 2 (Vendor)
- Custom 3 (Department or BU)
The Capital module allows administrators to enable specific capital types used within the organization.
Options that can be included or excluded are:
- New Capital Investment (including funding, cash flow and asset-related expenses)
- Tangible assets
- Leased assets – operating or capital
- Intangible assets
- Named assets
- Manage Existing Assets (including funding, cash flow and asset-related expenses)
- Existing tangible assets
- Existing intangible assets
- Retirements
- Transfers
- Improvements/Impairments
Asset Management capabilities include new asset requests, retirements as sale or write-off, transfers of assets, and logic for recognizing asset improvements and tracking intangibles.
Capital Benefits
- Built-in best practices for comprehensive capital expenditure planning
- Align tactical investments with strategic priorities
- Incorporate forward looking measures about potential capital needs into a capital planning process
- Ease of monitoring capital impacts to financial statements throughout the planning cycle
- Integrate capital and project financial planning to streamline information
