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Enable multiple eliminations for an investment project (preview)

[This article is prerelease documentation and is subject to change.]

Applies to: Dynamics 365 Project Operations for Integrated with ERP, Dynamics 365 Project Operations for manufacturing

Overview

In Dynamics 365 Project Operations, investment projects track costs that you capitalize rather than expense immediately. Elimination is the accounting process that reverses or removes capitalized costs from an investment project, transferring value to the associated fixed asset or ledger account.

By default, only a single elimination transaction is permitted per investment project. The Enable Handling of Multiple Eliminations in Investment Projects feature removes this restriction, so finance and project accountants can post multiple elimination transactions against a single investment project—supporting staged capitalization, cost overruns, and partial expense scenarios.

Key business scenarios

Scenario How this feature helps
Staged asset capitalization Eliminate costs phase-by-phase as each wing or section is placed in service
Cost overruns and scope changes Post a second elimination for incremental approved costs without reversing the original
Partial capitalization Eliminate only qualifying cost components; leave ineligible costs for expense recognition
Audit and compliance Single project number with per-voucher audit trail supports reconciliation

Important

This feature changes elimination posting behavior. Review your organization's capitalization policy before enabling it in production.

Prerequisites

Before you can enable multiple eliminations for an investment project, ensure you meet the following prerequisites:

  • Use Dynamics 365 Finance version 10.0.49.
  • In Feature management, enable the Enable Handling of Multiple Eliminations in Investment Projects feature.

Project management and accounting parameters

To update the Project management and accounting parameters, follow these steps:

  1. Go to Project management and accounting > Setup > Project management and accounting parameters.
  2. Go to the Revenue recognition tab.
  3. Allow multiple elimination accounts - This option allows you to use multiple accounts for elimination purposes. If you don't need multiple elimination accounts and prefer to use the account configured for revenue recognition, turn off this option.
  4. Allow transaction selection - This option allows you to add or remove transactions in the elimination proposal form. If you enable this option, you can't modify the transactions on the form. All defaulted transactions are used for elimination.
  5. Go to the Number sequence tab.
  6. Configure number sequence for elimination proposal.

Perform multiple eliminations

To perform the elimination process, generate an elimination proposal by following these steps:

  1. Go to Project management and accounting > Projects > All projects and open your investment project.
  2. Go to the Manage action pane, and select Revenue recognition.
  3. Generate Revenue recognition for the period, and select Post.
  4. Go to Project management and accounting > Investment Projects > Elimination Proposal or Revenue recognition > Elimination Proposal.
  5. Select + New to create the elimination proposal.
  6. Select the Revenue recognition project, elimination date, and select OK.
  7. In the Transactions tab, view the list of transactions available for the elimination process. Consider all transactions that aren't yet eliminated but undergo revenue recognition.
  8. Use the Add or Delete button to add or remove transactions from the elimination proposal.
  9. In the Elimination accounts tab, enter the ledger account, fixed asset, or other project, and distribute the total amount to the selected accounts.
  10. Select Post to post the elimination proposal.

Repeat as needed

Repeat steps 1–9 for each subsequent capitalization stage. Each transaction gets its own voucher and audit trail.

Eliminate the project (optional)

Once you eliminate all costs, select the Eliminate option while posting the elimination proposal. The following validations are performed during the posting process when you select the Eliminate option:

  1. All cost transactions must be fully eliminated.
  2. Revenue recognition must be completed and posted.
  3. No pending elimination transactions.

Reverse eliminations

Use reverse elimination to undo previously posted elimination entries when changes occur after the elimination process.

To reverse the elimination proposal, follow these steps:

  1. Go to Project management and accounting > Investment projects > Elimination proposal.
  2. Select the elimination proposal with posted status.
  3. Select Reverse to reverse the elimination proposal. You can use all transactions reversed through this process in future elimination cycles.

Note

Don't disable this feature after use in production. It restricts future eliminations on already affected projects.

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