20 Closing Cash Calls and Refunding the Amounts to Partners (Release 9.2 Update)

This chapter discusses:

20.1 Understanding Cash Call Closure and Refunds

You might need to close a cash call and refund the remaining amount to the partner for various reasons, such as the partner has exited from the joint venture, or the project has ended but there is cash remaining in the cash call and the partner wants a refund.

The cash call closure and refund process includes two tasks:

  • Request to close the cash call using the Cash Call Definition program (P09J40).

    When you close a cash call, you have the option to choose whether to create a voucher or a journal entry for the refund amount.

  • Process the closure by creating vouchers or journal entries.

    You use the Submit Close option on the Row menu of the Work with Cash Call Definition form to run the Create JV Cash Call JEs program (R09J630) or the Create JV Cash Call Vouchers program (R09J640) to create the closure journal entries or vouchers.

    You can also run these programs from the standard Batch Versions program.

    If you have chosen to create a voucher to close the cash call and refund the partner, you must run the R09J640 program.

    If you have chosen to create a journal entry to close the cash call and refund the partner, you must run the R09J630 program.

    Note:

    In case a refund is not needed, the money can be transferred to a new or an existing cash call.

    See Section 19.1, "Understanding Cash Call Transfers"

Figure 20-1 Process for Creating Vouchers for Cash Calls

Description of Figure 20-1 follows
Description of ''Figure 20-1 Process for Creating Vouchers for Cash Calls''

20.2 Requesting to Close a Cash Call

You use the Cash Call Definition program (P09J40) to request the closure by selecting the cash call to be closed and providing information to create a journal entry or a voucher. You can also specify an amount associated with any agreement default charge or amount to be retained by the joint venture due to the reason for the closure that has been identified in your Joint Operating Agreement. This agreement default charge will be deducted from the open amount and the remaining amount will be refunded to the partner.

To close a cash call and refund the partner, the cash call must have an open amount not equal to zero and the cash call must not be at any of these statuses: In Progress, Available to Invoice, Closed, Pending Transfer, or Pending Closure.

20.2.1 Requesting to Close a Cash Call and Refund the Amount to the Partner

To request the closure of a cash call and refund the amount to the partner:

  1. From the Joint Venture Management module (G09J), select Periodic Processing, Manage Cash Calls, and then select Cash Call Definition.

  2. On the Work with Cash Call Definition form, select the cash call that you want to close and select Close Cash Call from the Row menu.

    The system displays an error if the cash call is not eligible to be closed. For example, cash calls that are not invoiced yet cannot be closed.

  3. On the Close Cash Call form, review the information for the cash call that you have selected to close.

    The Refund Amount field displays the cash call open amount.

  4. To process the refund to the partner, select either the Voucher or Journal Entry option.

    If you select the Voucher option, the system will create a voucher for the refund amount.

    The system displays the following fields when you select the Voucher option:

    • Refund Amount

      This field is populated with the open cash call amount by default, but you can change the amount. The sum of the values in the Refund Amount and Agreement Default Charge fields must be equal to the open cash call amount.

    • Agreement Default Charge

      This is the amount that will be retained by the joint venture from the open amount of the cash call. The sum of the values in the Refund Amount and Agreement Default Charge fields must be equal to the open cash call amount.

    • Agreement Default Account

      The system populates this field with the account that is retrieved using the managing company and the AAI JVAxxx (Joint Venture Agreement Default Charge) where xxx is the G/L offset code assigned to the joint venture. If you have specified a G/L offset code in the Joint Venture Master program (P09J30), the system concatenates the G/L offset code to the AAI Item JVA to locate the account. If the account is not found using the managing company, the system uses the company 00000.

      You can override the account that the system populates in this field.

    • Close Reason Code

      Enter a value to denote the reason for closing the cash call. You can use your own user-defined reason code.

    If you select the Journal Entry option, the system will create a journal entry for the refund amount.

    When you select the Journal Entry option, the system displays the same fields as that of the Voucher (including the agreement default charge fields) with the addition of the following field:

    • Offset Account

      The system populates this field with account that is retrieved using the managing company and the AAI JVJxxx (Journal Entry Offset) where xxx is the G/L offset code assigned to the joint venture. If you have specified a G/L offset code in the Joint Venture Master program (P09J30), the system concatenates the G/L offset code to the AAI Item JVJ to locate the account. If the account is not found using the managing company, the system uses the company 00000.

      The offset account is used to balance the cash call journal entry, similar to how the A/P Trade account is used to close a cash call with a voucher. This account contains the open amount of the cash call minus the agreement default charge amount, if specified.

      You can override the account that the system populates in this field.

  5. Click Save and Close.

Note:

When you save the closure request, the system updates the status of the cash call to Pending Closure and displays the Close Type as Voucher or JE depending on how you have chosen to refund the amount.

20.3 Canceling a Closure Request

You can cancel a closure request at any time prior to it being processed. The system enables you to verify the details of a request before you cancel it.

Note:

Before you cancel a closure request, complete the processing option for the P09J40 program to set the cash call status for the cash call when you cancel a closure request.

See Section 18.3.1, "Prerequisites".

To cancel a closure request:

  1. From the Joint Venture Management module (G09J), select Periodic Processing, Manage Cash Calls, and then select Cash Call Definition.

  2. On the Work with Cash Call Definition form, select the cash call for which you want to cancel the closure request and then select Review Close from the Row menu.

  3. On the Review Pending Closure Request form, verify the information of the cash call that you are going to cancel and select Cancel Request.

  4. On the Cancel Closure Request window, enter the status that you want the cash call to be set to after the closure request is canceled.

    The system populates the status that you have specified in the processing option for the P09J40 program, but you can specify a different status or a user-defined that is eligible for this process.

  5. Click Cancel Request on the window to process the cancellation request.

    The system clears all the closure information you entered.

20.4 Creating Vouchers to Process Cash Call Closure

If you have chosen to close a cash call and refund the amount to the partner by creating a voucher, you must run the Create JV Cash Call Vouchers program (R09J640). You can access and run this batch process for a specific cash call using the Submit Close option on the Row menu of the Work with Cash Call Definition form. You can also run this process for multiple cash calls through the standard Batch Versions form by using the data selection for the program to select the records to process.

The system processes only those records that have the cash call status Pending Closure (91) and cash call close transaction type equal to Voucher (1). The program creates a voucher document for each cash call and a batch for each managing company that is associated with the processed cash calls. The batches are created with the batch type JV (Joint Venture Vouchers).

In case an agreement default charge is specified, the refund amount is the open cash call amount minus the agreement default charge.

Cash Call Information Updated as a Result of the Closure and Refund

The system closes the cash call and updates the F09J40 table with the cash call open amount equal to 0, the cash call status equal to 99 (Closed), and cash call close date with today's date.

The system also adds a ledger record for the cash call in the Cash Call Ledger table (F09J41) with the transaction type 30 (Close - Voucher) and stores the A/P voucher transaction information (Document Number, Document Type, Document Company, and G/L Date). For the closed cash call, the system also updates the F09J41 table with the reversed transaction amount to indicate the amount removed from the cash call.

To access the cash call transaction documents associated with the cash call, such as the voucher document created for the closure, use the Review Ledger option on the Row menu of the Work with Cash Call Definition form of the P09J40 program.

Debit and Credit Entries for Cash Call Vouchers in the F0911 Table

The cash call open amount is debited to the partner contribution account.

The system determines the partner contributions debit account for the close transaction using the cash call managing company and the AAI item JVCxxx (Partner Contributions) where xxx is the G/L offset code that can be used to define a different account for a joint venture. If you have specified a G/L offset code in the Joint Venture Master program (P09J30), the system concatenates the G/L offset code to the AAI Item JVC to locate the account. Also, if you have setup the Joint Venture Master program (P09J30) to create cash calls by subledger, the system uses the subledger type A (Address Book) to add the subledger information to the partner contributions account. The outside partner's address book number is used as a subledger, and if the partner is an insider business unit, the address book number of the business unit is used as the subledger.

The refund amount is credited to the Account Payable (A/P) trade account.

If there is an amount to be retained when closing the cash call, this amount is credited to the Agreement Default Charge account. The agreement default charge account is defined by the JVA AAI or entered by the user when the cash call is closed using the Cash Call Definition program (P09J40). The system determines this account for the close transaction using the managing company and the AAI item JVJxxx (Journal Entry Offset) where xxx is the G/L offset code assigned to the joint venture. If you have specified a G/L offset code in the Joint Venture Master program (P09J30), the system concatenates the G/L offset code to the AAI Item JVA to locate the account. If the account is not found using the managing company, the system uses the company 00000. Also, if you have setup the Joint Venture Master program (P09J30) to create cash calls by subledger, the system uses the subledger type A (Address Book) to add the subledger information to the partner contribution account. The outside partner's address book number is used as the subledger value, and if the partner is an insider business unit, the address book number associated with the business unit is used as the subledger value.

The system populates the Explanation/Remark column in the F0911 table with the value Refund Cash Calls, enabling you to identify that the transactions are for a cash call refund.

Example: G/L Accounting Entries when a Joint Venture Cash Call is Closed with a Voucher

A cash call for a partner and joint venture is closed to refund the partner.

Joint venture: A-GREENACREHOLDINGS

Partner: 7500010 (Thomson Company)

Cash call open amount: 80,000.00 USD

Agreement default charge: 5,000.00 USD

A voucher is created for the closed cash call. The voucher uses the cash call Partner Contributions account, the A/P Trade account, and the Agreement Default Charge account if there is an amount to be retained.

This diagram illustrates the G/L entries for the cash call close voucher.

Figure 20-2 Joint Venture Cash Call Close Voucher Transactions

Description of Figure 20-2 follows
Description of ''Figure 20-2 Joint Venture Cash Call Close Voucher Transactions''

The system prints a report listing the number of voucher documents created and the batch numbers generated during the process. The report also includes a message if there are records with warnings or errors. You can review the errors or warnings in the work center, correct the issue, and rerun the process.

Voucher Currency

When the currency of the partner and the managing company is different, the voucher amounts are in the currency of the managing company for the domestic side of the transaction and in the partner's currency for the foreign side of the transaction.

Override Tax Information in Supplier Master Record

The R09J640 program does not calculate tax on the voucher amount even if the supplier master record for the partner is set up with tax information in the Supplier Master table (F0401).

Payment Terms for Cash Call Vouchers

The payment terms, if specified on the legal entity record for the partner, will be used on the cash call voucher instead of the payment terms on the partner's Supplier Master record.

20.4.1 Prerequisites

Before you complete the tasks in this section:

  • Set up the processing options for the Create JV Cash Call Vouchers program (R09J640).

    • On the Process tab, enter values for the following processing options:

      • G/L Date: Specify the general ledger date to assign to the voucher. If you do not enter a date, the system date is used.

      • Voucher Date: Specify the date to assign to the voucher. If you do not enter a date, the system date is used.

      • Batch Approval: Specify whether to set the batch as approved or apply the status specified in the accounts payable constants. If you leave this processing option blank, the system applies the status specified in the accounts payable constants.

    • On the Versions tab, specify the versions that you want to use for these programs: Voucher Entry MBF (P0400047), Journal Entry MBF (P0900049), and General Ledger Post (R09801). If you do not specify a version for the P0400047 and P0900049 programs, the system uses ZJDE0001 as the default version.

      Note:

      You can define a specific voucher document type in the processing option of the Voucher Entry MBF program (P0400047) to identify the vouchers for cash calls.

      When you specify a version of the R09801 program in the processing option, the system automatically runs the R09801 program after creating the voucher batch and posts the batch. The system submits the R09801 program for each batch that is created. A batch is created for each managing company that is included in the cash call records selected for closure.

  • Set up data selection if you are running the program from the Batch Versions form. In the data selection, you can include the joint ventures for which you want to create cash call vouchers to close selected cash calls.

  • Enter a value in the G/L Offset Code field and select the Cash Call by Subledger check box in the P09J30 program as required.

    See Section 4.2.2, "Entering Joint Venture Master Records".

20.4.2 Running the Create JV Cash Call Vouchers Program (R09J640)

To run the program interactively for a specific cash call:

  • Access the Cash Call Definition program (P09J40). On the Work with Cash Call Definition form, select the cash call that you want to close and refund and select Submit Close from the Row menu.

    Note that the Submit Close option will run the R09J640 program when the selected cash call has the Cash Call Close Transaction Type equal to Voucher (1).

  • On the confirmation window that displays, revise the following fields as required:

    • G/L Date

    • Voucher Date

      The system populates these fields with the values from the processing options, but you can override the values.

  • Click Submit to proceed.

To run the program for multiple cash calls:

  • From the Joint Venture Management module (G09J), select Periodic Processing, Manage Cash Calls, and then select Create JV Cash Call Vouchers.

20.5 Creating Journal Entries to Process Cash Call Closure

If you have chosen to close a cash call and refund the amount to the partner by creating a journal entry, you must run the Create JV Cash Call JEs program (R09J630). You can access and run this batch process for a specific cash call using the Submit Close option on the Row menu of the Work with Cash Call Definition form. You can also run this process for multiple cash calls through the standard Batch Versions form by using the data selection for the program to select the records to process.

The system processes only those records that have the cash call status equal to Pending Closure (91) and cash call close transaction type equal to Journal Entry (2). The program creates a journal entry document for each cash call and a batch for each managing company that is associated with the processed cash calls. The batches are created with the batch type JG (Joint Venture Journal Entries).

In case an agreement default charge is specified, the refund amount is the partner contributions amount minus the agreement default charge.

Cash Call Information Updated as a Result of the Closure and Refund

The system closes the cash call and updates the F09J40 table with the cash call open amount equal to 0, and the cash call status equal to 99 (Closed).

The system also adds a ledger record for the cash call in the Cash Call Ledger table (F09J41) with the transaction type 40 (Close - Journal Entry) and stores the journal entry transaction information (Document Number, Document Type, Document Company, and G/L Date).

To access the ledger records and the associated journal entries that are created, use the Review Ledger option on the Row menu of the Work with Cash Call Definition form of the P09J40 program.

Debit and Credit Entries for Cash Call Journal Entries in the F0911 Table

The cash call open amount is debited to the partner contribution account.

The system determines the partner contribution account for the close transaction using the managing company and AAI JVCxxx (Partner Contributions) where xxx is the G/L offset code assigned to the joint venture. If you have specified a G/L offset code in the Joint Venture Master program (P09J30), the system concatenates the G/L offset code to the AAI Item JVC to locate the account. If the account is not found using the managing company, the system uses the company 00000. Also, if you have set up the Joint Venture Master program (P09J30) to create cash calls by subledger, the system uses the subledger type A (Address Book) to add the subledger information to the partner contribution account. The outsider partner address book number is used as the subledger value, and if the partner is an insider business unit, the address book number associated with the business unit is used as the subledger value.

The refund amount is credited to the Journal Entry Offset account.

The journal entry offset account is defined by the AAI item JVJ or is entered by the user when the cash call is closed using the Cash Call Definition program (P09J40). The system determines this account for the close transaction using the managing company and AAI JVJxxx (Journal Entry Offset) where xxx is the G/L offset code assigned to the joint venture. If you have specified a G/L offset code in the Joint Venture Master program (P09J30), the system concatenates the G/L offset code to the AAI Item JVJ to locate the account. If the account is not found using the managing company, the system uses the company 00000. Also, if you have setup the Joint Venture Master program (P09J30) to create cash calls by subledger, the system uses the subledger type A (Address Book) to add the subledger information to the journal entry offset account. The outsider partner address book number is used as the subledger value, and if the partner is an insider business unit, the address book number associated with the business unit is used as the subledger value.

If there is an amount to be retained when closing the cash call, this amount is credited to the Agreement Default Charge account.

The agreement default charge account is defined by the AAI item JVA or is entered by the user when the cash call is closed using the Cash Call Definition program (P09J40). The system determines this account for the close transaction using the managing company and AAI JVJxxx (Journal Entry Offset) where xxx is the G/L offset code assigned to the joint venture. If you have specified a G/L offset code in the Joint Venture Master program (P09J30), the system concatenates the G/L offset code to the AAI Item JVA to locate the account. If the account is not found using the managing company, the system uses the company 00000. Also, if you have setup the Joint Venture Master program (P09J30) to create cash calls by subledger, the system uses the subledger type A (Address Book) to add the subledger information to the agreement default charge account. The outsider partner address book number is used as the subledger value, and if the partner is an insider business unit, the address book number associated with the business unit is used as the subledger value.

The system populates the Explanation/Remark column in the F0911 table with the value Refund Cash Calls, enabling you to identify that the transactions are for a cash call refund.

Example: G/L Accounting Entries when a Joint Venture Cash Call is Closed with a Journal Entry

A cash call for a partner and joint venture is closed to refund the partner.

Joint venture: A-GREENACREHOLDINGS

Partner: 7500010 (Thomson Company)

Cash call open amount: 80,000.00 USD

Agreement default charge: 5,000.00 USD

A journal entry is created for the closed cash call. The journal entry uses the cash call Partner Contributions account, the Journal Entry Offset account, and the Agreement Default Charge account if there is an amount to be retained.

This diagram illustrates the G/L entries for the cash call close journal entry.

Figure 20-3 Joint Venture Cash Call Close Journal Entry Transactions

Description of Figure 20-3 follows
Description of ''Figure 20-3 Joint Venture Cash Call Close Journal Entry Transactions''

The system prints a report listing the number of journal entry documents created and the batch numbers generated during the process. The report also includes a message if there are records with warnings or errors. You can review the errors or warnings in the work center, correct the issue, and rerun the process.

20.5.1 Prerequisites

Before you complete the tasks in this section:

  • Set up the processing options for the Create JV Cash Call JEs program (R09J630).

    See Section 19.4.1, "Prerequisites"

  • Set up data selection for the R09J630 program if you are running the program from the Batch Versions form. In the data selection, you can include the joint ventures for which you want to create cash call closure journal entries.

  • Enter a value to the G/L Offset Code field and select the Cash Call by Subledger check box in the P09J30 program as required.

    See Section 4.2.2, "Entering Joint Venture Master Records".

20.5.2 Running the Create JV Cash Call JEs Program (R09J630)

To run the program interactively for a specific cash call:

  • Access the Cash Call Definition program (P09J40). On the Work with Cash Call Definition form, select the cash call that you want to close and refund and select Submit Close from the Row menu.

    Note that the Submit Close option will run the R09J630 program when the selected cash call has the Cash Call Close Transaction Type equal to Journal Entry (2).

  • On the confirmation window that displays, revise the following field as required:

    • G/L Date

      The system populates this field with the value from the processing option, but you can override the value.

  • Click Submit to proceed.

To run the program for multiple cash calls:

  • From the Joint Venture Management module (G09J), select Periodic Processing, Manage Cash Calls, and then select Create JV Cash Call JEs for Transfer and Close.