Multiple Overhead Methods for a Single Joint Venture

You can create multiple instances of an overhead method with the same name for a joint venture, as long as each instance has effective dates that don't overlap. This enables you to specify different stakeholders or different fixed amounts, percentages, and rates to use for the overhead calculation for different periods of time. When setting up the process to calculate overhead for a joint venture, you enter an effective date that coincides with the date range of the overhead method that you want to use to calculate overhead.

You can also set up more than one overhead method if you need to calculate overhead based on different categories of costs or operational measures for the joint venture. This gives you the option to use a different percentage or rate for the overhead calculation for each type of cost or operational measure. For example, a joint operating agreement might stipulate that the joint venture partners cover overhead costs based on material and maintenance costs, with a different percentage used in the overhead calculation for each type of cost. In this scenario, you would create two overhead methods for the joint venture, one with the percentage for calculating overhead based on material costs and another with the percentage for calculating overhead based on maintenance costs.