6 Setting Up Account Information for Joint Ventures

This chapter discusses

6.1 Entering Automatic Accounting Instructions for Joint Venture Management (Release 9.2 Update)

Note:

It is important that you set up the AAIs discussed in this section so that the Joint Venture Management system works as expected.

You must set up Automatic Accounting Instructions (AAIs) for Joint Venture Management to identify the revenue account ranges (JVR01 - JVR99), expense account ranges (JVE01 - JVE99) and capital cost account ranges (JVC01 - JVC99). Later, when you identify and mark the distributable accounts for the joint venture, the system uses the AAI ranges to define the Joint Venture Account Type for the distributable accounts as revenue, expense, or capital cost.

You use the Automatic Accounting Instructions program (P0012) to set up AAIs for joint ventures. AAI records are stored in the Automatic Accounting Instructions table (F0012).

Revenue AAIs

You must set up AAIs to specify a range or ranges of revenue accounts that are included in joint venture processing. You use codes JVR01 through JVR99 to create the ranges. When you define a range, you specify the object account and subsidiary values only. You can create up to 49 ranges of revenue accounts. For example, to set up the first range, use AAIs JVR01 (from account) and JVR02 (through account). To set up another range, use AAIs JVR03 and JVR04, and so on, until all revenue account ranges have been defined.

The system uses these AAIs to define the joint venture account type as Revenue for accounts that are within this AAI range and are marked as distributable in the P09J101 program. The system pays the partner when the joint venture account type is Revenue.

This table shows the setup considerations for revenue AAIs for the Joint Venture Management system:

AAI Item Description Company Business Unit Object Subsidiary Sequence Number
JVR01 Beginning Revenue Account Range 00000 Not Used Required Optional 9.1
JVR02 Ending Revenue Account Range 00000 Not Used Required Optional 9.1

This table shows an example of joint venture revenue accounts.

AAI Item Company Business Unit Object Subsidiary
JVR01 00000 Not Used 5000  
JVR02 00000   5999 99999999

Expense AAIs (Release 9.2 Update)

You must set up AAIs to specify ranges of expense accounts to use for joint venture processing. You use codes JVE01 through JVE99 to create the expense account ranges. The system uses these AAIs to define the joint venture account type as Expense for accounts that are within this AAI range and are marked as distributable in the P09J101 program. The system bills the partner when the joint venture account type is Expense.

This table shows the setup considerations for expense AAIs for the Joint Venture Management system:

AAI Item Description Company Business Unit Object Subsidiary Sequence Number
JVE01 Beginning Expense Account Range 00000 Not Used Required Optional 9.8
JVE02 Ending Expense Account Range 00000 Not Used Required Optional 9.8

This table shows an example of joint venture expense accounts.

AAI Item Company Business Unit Object Subsidiary
JVE01 00000 Not Used 8000  
JVE02 00000   8999 99999999

Capital Cost AAIs

You must also set up AAIs to specify ranges of capital cost accounts for joint venture processing. You use codes JVC01 through JVC99 to create the ranges for capital cost transactions. The system uses these AAIs to define the joint venture account type as Capital Cost for accounts that are within this AAI range and are marked as distributable in the P09J101 program. The system bills the partner when the joint venture account type is Capital Cost. Capital cost accounts represent the costs of projects in progress reported on the Balance Sheet.

Note:

If you define Work in Progress type of accounts within the capital cost AAI range, Oracle recommends that you use an account that has the following attributes to clear the Work in Progress accounts upon recognition of the fixed asset associated with the costs:
  • An account that is at a higher level of detail than the current Work in Progress accounts

  • An account is not set as distributable

If the account that clears the Work in Progress accounts is within your capital cost account range and is set as distributable, your partners will be credited their portion of the cost during the distribution process, and this is not desirable.

This table shows the setup considerations for capital cost AAIs for the Joint Venture Management system:

AAI Item Description Company Business Unit Object Subsidiary Sequence Number
JVC01 Beginning Capital Cost Range 00000 Not Used Required Optional 9.7
JVC02 Ending Capital Cost Range 00000 Not Used Required Optional 9.7

This table shows an example of joint venture capital cost accounts.

AAI Item Company Business Unit Object Subsidiary
JVC01 00000   1320  
JVC02 00000   2099 99999999

Note:

Distributable accounts that are not within the 3 AAI ranges will be defined as Distribution Only and the system will not bill or pay the partners in such a case.

6.1.1 Joint Venture Cutback AAIs (Release 9.2 Update)

In addition to setting up account ranges for the joint venture transaction AAIs, you must also define the cutback accounts for the cutback AAIs. The system will use the cutback accounts to create offset entries in the Account Ledger table (F0911) when you create invoices, vouchers, and journal entries to bill and pay the partners.

There are three cutback AAIs based on the transaction type. You must set up an account for each of the cutback AAIs:

  • AAI Item JVCBE - Cutback Expense

    If the transaction is an expense transaction, the system uses the account that you define in this AAI to create the offset entry on the invoice or journal entry.

    This table shows the setup considerations for the JVCBE AAI:

    AAI Item Description Company Business Unit Object Subsidiary Sequence Number
    JVCBE Cutback Account for Expense 00000 Not Used Required Optional 9.4

    This table shows an example of a cutback expense account.

    AAI Item Company Business Unit Object Subsidiary
    JVCBE 00000   9990  

  • AAI Item JVCBC - Cutback Capital Cost

    If the transaction is a capital cost transaction, the system uses the account that you define in this AAI to create the offset entry on the invoice or journal entry.

    This table shows the setup considerations for the JVCBC AAI:

    AAI Item Description Company Business Unit Object Subsidiary Sequence Number
    JVCBC Cutback Account for Capital Cost 00000 Not Used Required Optional 9.2

    This table shows an example of a cutback capital cost account.

    AAI Item Company Business Unit Object Subsidiary
    JVCBC 00000   4990  

  • AAI Item JVCBR - Cutback Revenue

    If the transaction is a revenue transaction, the system uses the account that you define in this AAI to create the offset entry on the voucher or journal entry.

    This table shows the setup considerations for the JVCBR AAI:

    AAI Item Description Company Business Unit Object Subsidiary Sequence Number
    JVCBR Cutback Account for Revenue 00000 Not Used Required Optional 9.3

    This table shows an example of a cutback revenue account.

    AAI Item Company Business Unit Object Subsidiary
    JVCBR 00000   9950  

6.1.2 AAIs for Calculating Overhead (Release 9.2 Update)

In addition to setting up the accounting ranges for joint venture transaction and cutback AAIs, you must also define the overhead AAIs to create journal entries. The system uses these AAIs when processing the overhead amount to create a journal entry. There are two overhead AAIs based on the transaction type. You must set up an account for each of the overhead AAI:

  • AAI Item JVOHE - Overhead Expense

    The system uses the account that you define in this AAI to enter the overhead amount. If the business unit is not specified in the JVOHE, the system uses the business unit for which the overhead is calculated.

    This table shows the setup considerations for the JVOHE AAI:

    AAI Item Description Company Business Unit Object Subsidiary Sequence Number
    JVOHE Overhead Expense Account 00000 Optional Required Optional 9.5

    This table shows an example of an overhead expense account.

    AAI Item Company Business Unit Object Subsidiary
    JVOHE 00000   8870  

  • AAI Item JVOHO - Overhead Offset

    The system uses this account to create an offset entry. If the business unit is not specified, the system uses the recovery business unit that is specified in the Business Unit Attribute program (P09J0006). If the recovery business unit is not found, the system uses the business unit for which the overhead is calculated.

    This table shows the setup considerations for the JVOHO AAI:

    AAI Item Description Company Business Unit Object Subsidiary Sequence Number
    JVOHO Overhead Offset Account 00000 Optional Required Optional 9.6

    This table shows an example of an overhead offset account:

    AAI Item Company Business Unit Object Subsidiary
    JVOHO 00000   8879  

For specific instructions about how to enter AAIs into the system, see Setting Up Automatic Accounting Instructions in the JD Edwards EnterpriseOne Applications Financial Management Fundamentals Implemenation Guide.

6.1.3 AAIs for Cash Calls (Release 9.2 Update)

You must set up the AAIs for processing cash calls if you are using cash calls to manage the cash flow for the expenses associated with your joint venture.

There are three AAIs for cash calls and you must set up an account for each of them:

  • AAI Item JVCxxx - Partner Contributions Account

    This AAI defines the account that holds the current balance of partner contributions. The system uses this account in cash calls transactions to create the following entries:

    • The credit entry on the cash call invoice that you create to bill the partners for their cash calls

    • The debit entry on the cash call voucher or cash call journal entry that you create to close specific cash calls and refund the partners

    • The debit and credit entries on the cash call journal entry that you create to transfer a cash call to another cash call

    • The debit and credit entries on the cash call journal entry that you create to draw on the cash call

    The xxx on the AAI definition represents the Joint Venture G/L Offset code that can be used to define a different account for each joint venture.

    This table shows the setup considerations for the JVCxxx AAI:

    AAI Item Description Company Business Unit Object Subsidiary Sequence Number
    JVCxxx Partner Contributions Account 00000

    or

    Specific Company

    Required Required Optional 9.900

    This table shows an example of a Partner Contributions Account.

    AAI Item Company Business Unit Object Subsidiary
    JVC 00001 1 4950  

  • AAI Item JVJxxx - Journal Entry Offset Account

    The system uses the account that you define in this AAI to create the offset entry on the cash call journal entry that you create to close specific cash calls and refund the joint venture partners.

    To close a cash call and to refund the partner, you can either create a voucher or a journal entry. This AAI is used only when you perform the cash call close and refund by creating a journal entry.

    The xxx on the AAI definition represents the Joint Venture G/L Offset code that can be used to define a different account for each joint venture.

    This table shows the setup considerations for the JVJxxx AAI:

    AAI Item Description Company Business Unit Object Subsidiary Sequence Number
    JVJxxx Journal Entry Offset Account 00000

    or

    Specific Company

    Required Required Optional 9.120

    This table shows an example of a journal entry offset account.

    AAI Item Company Business Unit Object Subsidiary
    JVJ 00001 1 4190  

  • AAI Item JVAxxx - Agreement Default Charge Account

    The system uses the account that you define in this AAI to create the credit entry for the agreement default charge on the cash call journal entry or voucher that you create to process the close and refund of a cash call. An agreement default charge is the amount that a joint venture partner must pay for backing out of the joint venture.

    The xxx on the AAI definition represents the Joint Venture G/L Offset code that can be used to define a different account for each joint venture.

    This table shows the setup considerations for the JVAxxx AAI:

    AAI Item Description Company Business Unit Object Subsidiary Sequence Number
    JVAxxx Agreement Default Charge 00000

    or

    Specific Company

    Required Required Optional 9.110

    This table shows an example of an agreement default charge account.

    AAI Item Company Business Unit Object Subsidiary
    JVA 00001 1 9170  

6.2 Identifying Distributable Accounts for Joint Ventures

You create joint ventures so that you can accurately calculate and distribute expenses and revenue among the partners involved in the joint venture. To ensure that the system calculates and distributes all of the required amounts, you must specify which accounts are distributable. Only amounts associated with accounts that are defined as distributable are included in the joint venture distribution process.

To specify which accounts to include in the distribution process, you use the Joint Venture Distributable Accounts program (P09J01).

When you launch the Joint Venture Distributable Accounts program, you must first enter search criteria to find the accounts you want to mark as distributable. When you click Find, the system displays all Account Master table (F0901) records that match your search criteria.

To mark an account as distributable, you select the Distributable option on that row, and then click OK.

When you save your distributable selections, the system creates a record in the Joint Venture Distributable Account table (F09J01) for the selected accounts.

If you deselect the Distributable option for an account, and then click OK, the system removes the record from the F09J01 table.

Note that when using this application, you cannot update or delete any records from the F0901 table.

Creating Distributable Accounts from Other JD Edwards EnterpriseOne Systems

If you also use the JD Edwards EnterpriseOne Job Cost system to manage your business, you can mark accounts as distributable when you set up accounts for chart types in the Chart Type Setup form of the Job Cost Code Structures program (P51091). After you have specified distributable accounts for a chart type, you can copy this chart type to create other chart types with distributable accounts, as well as copy the chart to the job master record. Similarly, when you copy a job (that uses a chart with distributable accounts) to another job or chart, the distributable accounts are also copied.

See "Creating a Chart Type" in the JD Edwards EnterpriseOne Applications Job Cost Implementation Guide.

When you use the Account Master program (P0901) to create a copy of a distributable account, the distributable feature of the account is also copied and the system creates a record for the copied account in the F09J01 table.

You can access the P09J01 program from the Row menu of these programs:

  • Business Unit Master (P0006)

  • Job Cost Master Revisions (P51006)

When you delete distributable accounts using the Account Master program (P0901) or the Budget Original program (P510121), the system deletes the accounts from the Joint Venture Distributable Account table (F09J01) if the accounts are not used in the jobs and no F0911 entries exist for the accounts.

6.2.1 Prerequisites

Before you can mark accounts as distributable, complete the following tasks:

6.2.2 Selecting Distributable Accounts for Joint Ventures

To select distributable accounts for joint ventures:

  1. From the Joint Venture Management module (G09J), click Joint Venture Setup, and then Distributable Accounts.

    The system displays the Joint Venture Distributable Accounts form.

  2. Specify the search criteria using either the fields in the header, or the Query By Example (QBE) row, and then click Find. You must specify the search criteria to search for accounts.

    To search for all accounts for a parent business unit that has multiple business units under it, enter the parent business unit in the Project Number field and click Find. The system retrieves all the accounts for all the business units under that parent business unit.

  3. Select the Distributable option for all accounts that you want to mark as distributable, and then click OK.

    When you mark the account as distributable, the system populates the Joint Venture Account Type field as Expense, Capital Cost, or Revenue based on the AAI account range the account is included in. If the account is not within any of the AAI ranges for the Joint Venture Management system, it will be classified as Distribution Only and invoices, vouchers, or journal entries will not be created for the distributed transactions.

  4. Click Cancel to exit the application.

6.3 Updating Multiple Accounts as Distributable Accounts

You can specify distributable accounts in the chart of accounts for a business unit, and then globally copy the distributable accounts to other business units based on the object and subsidiary values.

You use the Update Accounts as Distributable program (R09J405) to globally copy distributable accounts from the Account Master table (F0901) and add those accounts to the Joint Venture Distributable Account table (F09J01).

To use the R09J405 program, you must specify a business unit in the processing option for the program. The business unit must already have accounts marked as distributable in the F09J01 table. For each business unit included for processing, the system searches for accounts that match the object and subsidiary of the distributable accounts for the business unit that you have specified in the processing option. All matched accounts are marked as distributable and added to the F09J01 table. The program prints a report that has information about the number of distributable accounts added to the F09J01 table for each business unit.

6.3.1 Prerequisite

Before you complete the tasks in this section, set up the Business Unit From processing option for the R09J405 program. The business unit must have:

  • A record in the Business Unit Master table (F0006)

  • Distributable accounts in the Joint Venture Distributable Accounts table (F09J01)

The system prints an error in the report if the business unit is not specified or does not have any distributable accounts. If you enter an invalid business unit in this processing option, the system displays an error message and the report will not be generated.

6.3.2 Running the Update Accounts as Distributable Program (R09J405)

From the Joint Venture Management module (G09J), select Advanced and Technical Operations, and then Update Accounts as Distributable.

6.4 Updating the Joint Venture Account Type for Multiple Accounts (Release 9.2 Update)

In case you change any of the joint venture AAI ranges to include or remove accounts, you can run the Update Joint Venture Account Type program (R09J411) to mass update the joint venture account type for the distributable accounts included in the AAI range.

This program determines which AAI range each distributable account comes under and updates the joint venture account type as Revenue, Capital Cost, or Expense in the Joint Venture Distributable Accounts table (F09J01). The program also updates the joint venture account type for associated distribution records in the Joint Venture Account Ledger table (F09J11) that are not at the transaction status of Process Complete.

Note:

If an account is removed from an AAI range and the account is already set as distributable in the F0901 table, the R09J411 program updates the joint venture account type as Distribution Only.

6.4.1 Prerequisite

Before you use the R09J411 program to update the joint venture account type, you must mark new accounts that you add to the AAI ranges as distributable using the P09J01 program.

6.4.2 Running the Update Joint Venture Account Type Program (R09J411)

From the Joint Venture Management module (G09J), select Advanced and Technical Operations, and then Update Joint Venture Account Type.