Prevent the Identification and Distribution of Transactions Related to Capitalization of Fixed Assets

When using the Construction work in progress (CWIP/CIP/WIP) account to record capital expenditure for assets that are work in progress, only the transactions related to incurred costs should be identified for joint venture processing and distributed to partners. Transactions that correspond to the capitalization of an asset should not be distributed to partners.

Instead of using the original WIP account for transactions related to the capitalization of assets, Oracle recommends that you use a WIP Contra Clearing account. Then in the joint venture setup, you need to make sure that this clearing account is not included in the accounts identified as distributable for the joint venture.

If you can’t use a WIP Contra Clearing account, then after these types of transactions are identified in Joint Venture Management, you must manually set the status of the transactions to “Not distributable.”