Set Up Partner Accounts for Joint Venture Payables Invoices

The partner account setup described in this chapter applies to payables invoices that the managing partner creates to pay each partner’s share of the joint venture revenue.

By default, payables invoices are written to the expense accounts used in the original transactions the joint venture distributions came from. Remember that joint venture transactions are identified by distributable accounts. To prevent invoice and journal transactions generated by Oracle Joint Venture Management from being identified and processed by Joint Venture Management again, you must perform one of these configurations.

• Override at least one segment value of the expense account with an account that's not identified as distributable in your joint venture definition.

• Enable the “Exclude joint venture transactions” option in your joint venture definition.

  See Exclude Joint Venture Invoices and Journals from Oracle Joint Venture Management Processing for more information.

In Oracle Joint Venture Management, the expense account, which is written in the Item Expense accounting class on the payables invoice, is referred to as the partner account. In some industries, it’s referred to as the cutback account.

Note: The partner account setup described in this chapter also applies to payables invoices created for nonoperated joint ventures using this process: Create Joint Venture Invoices and Journal Entries. The nonoperator in a nonoperated joint venture creates payables invoices to pay the managing partner for their share of the joint venture costs.

Debit Memos

When you need to make adjustments to a payables invoice that you create to pay the partner’s share of revenue, you create a debit memo to back out the amount in the invoice. Typically, the system carries over the partner account from the invoice to the debit memo, in which case the debit memo will be written to the correct account provided that you didn’t override the default setup for debit memo. To make sure your accounting is correct for debit memos, you must apply the same set of account segment values that you overrode on the posted invoice.

To derive the partner account for joint venture payables invoices and debit memos, you set up Oracle Financials subledger accounting following the recommended approach described in this chapter.