Example of Setting Up and Processing Assignment Rules
This example shows how assignment rules can be set up to assign different ownership definitions to different types of transactions in a joint venture.
In this example, a joint operating agreement includes terms for splitting costs and revenue among the managing partner and the three partners in a joint venture. Most of the expenses and revenue have the same terms for the split, except for costs related to site materials, maintenance, and labor. In the agreement, each of these types of costs has a different percentage split.
The managing partner creates a joint venture definition with the following details:
- Identification of distributable accounts.
- Ownership definitions for splitting the revenue and expenses, including the
following three ownership definitions to define the percentage splits for site
materials, maintenance, and labor:
Ownership Definition Stakeholders and Percentages OWNERSHIP-MATERIALS Acme - 25%; Thompson - 25%; Sampson - 25%; Managing Partner - 25% OWNERSHIP-MAINTENANCE Acme - 20%; Thompson - 20%; Sampson - 20%; Managing Partner - 40% OWNERSHIP-LABOR Acme - 33%; Thompson - 33%; Sampson - 34%
Before creating assignment rules to assign ownership definitions to cost transactions, the managing partner sets up account sets to use in the assignment rules. The account sets identify the following accounts:
- Material accounts: 515600–515950
- Maintenance accounts: 525400–525410
- Labor accounts: 536051–536100
Next, the managing partner creates the following assignment rules, associating each account set to the appropriate ownership definition:
| Assignment Rule | Account Set | Sequence | Ownership Definition |
|---|---|---|---|
| MATERIALSRULE | Account set 1 (515600–515950) | 10 | OWNERSHIP-MATERIALS |
| MAINTENANCERULE | Account set 2 (525400–525410) | 20 | OWNERSHIP-MAINTENANCE |
| LABORRULE | Account set 3 (536051–536100) | 30 | OWNERSHIP-LABOR |
After activating the joint venture definition, account sets, and assignment rules, the managing partner sets up the Identify Joint Venture Transactions process to process transactions for the joint venture. The process uses the primary segment values in the joint venture definition to identify all joint venture costs and revenue for distribution. It then processes the assignment rules according to the sequence number and assigns ownership definitions to each type of cost transaction according to the details in the assignment rules.
This is a simplified scenario, but you can also set up assignment rules to accommodate more complex joint operating agreements. You can set up an assignment rule to assign a single stakeholder to a set of transactions. Or if you use Oracle Joint Venture Management with Oracle Project Costing, you can set up assignment rules to assign ownership definitions or stakeholders to transactions based on project information in transactions.