Archibus SaaS / Leases / Background Data - Costs
Real Property / Costs / Background Data

Cost Categories (Concept)

When you document lease costs, you must select a cost category for the cost. Organizing costs by cost categories enables you to:

• Group and summarize costs for reporting . When managing costs and generating reports, you can restrict the costs by cost category, enabling you to work with only specific cost categories.
• Associate cost categories with cost classes and super classes that roll up cost categories to more general groupings. You first define a cost class and then add cost categories for it.
• Associate cost categories with cost types that group related costs within the category.
• Associate cost categories with a country and VAT percentage that the system uses to calculate VAT costs. This feature is enabled if you are using the Archibus VAT and multicurrency features. See Defining Default VAT Percentages by Cost Category and Country.
• Roll up and prorate costs to categories meaningful to your organization, such as the line items on your cash flow or income statements. This is handy for charging back these costs. Cost categories include a selection for the Assigned To - Rolls Up To - Prorates To value you assign to the cost. This selection enables you to define, for each cost having this cost category, how to roll up and prorate the cost for reporting and chargeback.

The default cost categories act as a starting point for developing your own cost categories. The default cost categories are:

Note; For the Leases SaaS module, the purpose of developing cost categories and assigning them to costs is to organize your costs. If you area SaaS user and wish to charge back costs, you must work with the Chargeback processes of the Real Property SaaS module.

This topic has the following sections:

• Cost Classes
• Cost Type
• The Assigned To - Rolls Up To - Prorates To Selection

Cost Classes

When you create a cost category, you assign it to a cost class. Cost classes enable Cost Administrators to search for costs by class when they are managing costs using the Cost Wizard, and when selecting costs to report on. Cost classes can optionally be associated with super classes, the most general level of classification of a cost. For example, you could define a class of Rent Income and associate it with the super class of Income.

Cost Type

When you add a cost category, you can optionally give the category a cost type that groups related costs within the category. When working in the Cost Wizard, you can select costs by cost type to show only those costs.

For example, if you assign the cost type 'Base Rent' to the 'Rent - Base Rent' cost category, you can examine all costs having the Base Rent cost type together in the Cost Wizard. This enables you to make finer distinctions, such as viewing only Base Rent cost types, and not costs classified with other Rent - Base Rent cost types, such as Rent - Other Rent.

If you associate the Tax Cost Type with a cost category, you can create tax cost projections by adding only costs with these cost tax types from the Cost Forecasting Wizard. See Cost Forecasting Wizard

The cost type value defaults to N/A, which indicates a cost with no specialized roll-up category. The default cost types provide a starting point for developing your own cost categories.

The default cost types are:

Cost Type	Description
BASE RENT	Identifies costs that appear in the Base Rent Costs by Lease reports.
LEASEHOLD IMP	Identifies costs that are part of leasehold improvements.
OPERATING EXP	Identifies costs that are operating expenses.
OTHER RENT	Identifies rent charges that are not base rents and are not percentage rents.
PCT. RENT	Identifies costs that are determined from a percentage of sales or gross receipts. This cost type is typically used for costs associated with leases for retail properties
TAX	Identifies tax costs.
UTILITY	Identifies utility costs.

Assigned To - Rolls Up To - Prorates To

Note: The Leases SaaS module does not support chargeback. SaaS users can use the chargeback processes of the Real Property SaaS module.

When you define a cost category, you select a value for the "Assigned To - Rolls Up To - Prorates To" selection. This selection controls the roll-up and proration strategies for charging back costs to properties, leases, buildings, and departments. This information is used when you generate chargeback costs.

The following table describes the three components of this selection

Field Component	Description	Choices	How It Works
Assigned To	Identifies the item to which the original cost must be assigned in order for the chargeback action to properly charge back the cost. This is the item (building, property, lease, or account) the cost is added for.	All Leases Buildings Properties.	If the value for this portion of the field is: All: Includes costs with any assignment (leases, buildings, properties, or accounts). It is used to directly bill, but not to charge back costs. Leases, Buildings, or Properties: When entering costs using the Cost Wizard, you select the lease, building, or property the cost is for. The Cost Wizard then presents only cost categories that match your selection; that is, cost categories that have an Assigned To value that matches the item you selected, or that have an Assigned To value of All. Note: For costs associated with accounts, you must select a cost that has an "Assigned To" value of "All". You can directly bill, but not charge back these costs.
Rolls Up To	Identifies the item for which a rolled up chargeback Scheduled Cost record should be created for this type of cost. This is useful for reporting on costs that you track or incur at a lower level, but want to sum up to a higher level.	None Buildings Properties	If the value for this portion of the field is: None: The cost does not roll up. Buildings or Properties: A Scheduled Cost record that rolls up the costs for this cost category is created for either the building or the property, depending on your selection. For instance, you might denote a maintenance cost category as rolling up a building cost to properties. You then enter your costs for maintenance for each building and assign them the same cost category that rolls up to properties. For each property, the chargeback routine will sum all maintenance costs having this cost category for all buildings assigned to the property, and then record these costs in one Scheduled Cost record assigned to the property.
Prorates To	Identifies the item to which costs should be proportionately distributed, that is, for billing purposes to which item should this cost be charged back.	Bill Direct Leases Buildings Departments	If the value for this portion of the field is: Bill Direct: The chargeback action does not generate any chargeback Scheduled Cost records. This cost category is not charged back, rather it is billed directly to the item it was reported for. None: The chargeback routine generates rolled up Scheduled Cost records only. Leases, Buildings, or Departments: The chargeback routine takes the total and prorates it back to the given building, department, or lease, based on the relative area percentages of these entities, by assigning the generated Scheduled Cost records to buildings, departments, or leases.

For examples of using each of these values, see The Nine Chargeback and Proration Definitions.

The selections available for Assigned To - Rolls Up To - Prorates To are:

• All-None-Bill Direct
• Buildings-Properties-None
• Buildings-Properties-Leases
• Buildings-None-Leases
• Leases-Buildings-None
• Leases-None-Departments
• Leases-Properties-None
• Properties-None-Buildings
• Properties-None-Leases

See Also

Example of Charging Back to Leases

Example of Charging Back to Departments

Chargeback Overview

CAM Costs