Set Up a Nonoperated Joint Venture Definition
Use the Create Joint Venture Definitions application to create a joint venture definition for a nonoperated joint venture. The setup is similar to an operated joint venture definition, with some differences in the classification of the joint venture and stakeholders.
Classification of the Joint Venture
You set up the initial details as you would an operated joint venture definition, except that you set the Classification to Nonoperated.
Stakeholder Setup
For joint ventures classified as nonoperated, your role in the joint venture is that of a nonoperator. Therefore, to represent your role, you need to set up a stakeholder as a nonoperator. For the managing partner, you set up a stakeholder record with the role of the operator. You can also set up the other stakeholders other than the managing partner as nonoperator stakeholders. This enables you to identify your role in the joint venture and use this information for reporting and auditing purposes.
Note the following fields when setting up your stakeholder record:
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Classification: Select Nonoperator.
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Invoicing Partner: Select the invoicing partner record for the managing partner (operator).
Although you’re classifying yourself as a nonoperator stakeholder, you use the invoicing partner record of the managing partner (operator). This setup enables you to create payables invoices with the correct supplier details.
Ownership Definition Setup
To distribute the transactions identified for your nonoperated joint ventures, you create an ownership definition that reflect your ownership percentage in the joint venture. The ownership definition you create might not be the exact replica of the ownership definition for the joint venture that’s specified in the operator’s system. At a minimum, it must include two required stakeholders: you (nonoperator) and the operator. If you create such an ownership definition, it must contain your correct ownership percentage in the joint venture, and the operator’s percentage can be the sum of the ownership percentages of all the other partners in the joint venture. Your ownership definition can also include the other nonoperating partners in the joint venture.