It is typical for Oil Company using Asset Under Construction Monitoring when the assets developed based on the project budget. Moreover, the project budget under approval and supervision by the Government (the partnership for oil exploration between Government and Foreign Oil Company). Asset under construction charges should be monitored to prevent from overrun or underrun expenditure. Overrun and underrun is the bad case for project cost management because the actual cost does not fit with the budget approval or there is big amount different. Furthermore, the agreement between company and government is that if there is any overrun matters more than 110% budget, then the over charges will be the sole cost. Sole cost means that Foreign Oil Company should bear the cost by its own. Otherwise, all the actual cost that meet the budget will be reimbursed by Government, in Indonesia called SKK MIGAS. However there is a way to escape from sole cost risk if overrun happen during the asset construction. If the Finance Team found the AUC is overrun, they should warn project team to submit BS Revision to SKK Migas. If SKK Migas approved the revision, then Company, Chevron will not bear the sole cost. There are many terms used in the Asset Monthly Outlook to control the expenditure.
Actual expenditure is the expenditure of the project on that date or day only. So it is not include accrual. Accrual plus Actual expenditure called Cumulative Expenditure from the project starts until recent development. Accrual is exist because of the sponsor estimate that is updated monthly. Sponsor estimate is the estimation how much charges in total will be charged on the current month based on the prediction. Year to date expenditure is the total expenditure from the first month of current year. For example YTD March Expenditure means the Expenditure from January 2015 to March 2015. To find, this month only expenditure excluding accrual we used actual expenditure this month minus previous month. Why accrual does not exist in actual because of the data taken on that seconds.
There is other tools to monitor such as Estimate at Completion and Value of Work done. It is the prediction how much will be expended.