Set Up the Joint Venture Subledger for Internal Transfer Journals Related to Costs
Set up the Joint Venture subledger in subledger accounting to enable the proper accounting of a stakeholder’s share of costs in a joint venture.
Internal transfer journals for costs are accounted in these locations:
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The accounts for the stakeholder.
These accounts should mirror the accounts in the joint venture, such as for assets, maintenance, overhead, and so on. Internal transfer journals for costs are a debit to these accounts.
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The cutback accounts for the joint venture.
Cost amounts from internal transfer journals are entered into cutback accounts as a credit. Capturing these amounts in cutback accounts enables a managing partner of a joint venture to report on its actual costs.
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Cost recovery or revenue accounts for overhead charges.
For internal transfer journals with overhead charges, instead of a cutback account, you need to account for overhead amounts in a separate cost recovery or revenue account, depending upon your business needs.
- The partner contribution accounts for the joint venture.
- The partner contribution accounts for the stakeholder.
These accounts should already exist in your configuration. For this setup, you only need to identify them in order to derive the accounts to which the internal transfer journals will be applied.