Activities are simple configuration entities that can be associated with tasks in the project work plan. Tasks can be characterized by the type of activity involved in accomplishing the task. For example, certain tasks could be categorized as design activity while other tasks could be characterized as testing activity.
Although they can be used for simple categorization, activities are usually used to identify costs that can be capitalized for Statement of Position (SOP) 98-1 compliance. For example, activities marked as capitalized will categorize the costs of associated tasks as capital if the project supports capitalization. A project or task is identified as capitalized when it is associated with a capitalized activity.
Project Management comes with a pre-defined set of activities reflecting common SOP 98-1 categories that can be configured for use with tasks.
If you choose not to activate SOP 98-1 tracking, activities can still be associated with tasks as a categorization tool, and any associated costs will be considered operating expenses. That is, activities can be used even when SOP 98-1 functionality is not enabled, but they cannot be marked as capitalized, nor will projects or tasks associated with any activities track capitalization data.
Note: Activities can also be associated with requests and packages (but cannot be capitalized). However, only activities associated with tasks can be mapped and synchronized between Project Management and Microsoft Project.
For detailed discussion of configuring activities and activity behavior, see the Financial Management User Guide.