Example of Reversing Joint Venture Distributions by Updating the Ownership Definition

Consider an active ownership definition named VENTUREOD1 that has the following information.

Ownership Definition Name	Effective Dates	Stakeholders	Ownership Percentages
VENTUREOD1	1/01/2019 - 12/31/2019	S1, S2	2 stakeholders, 50% each

Cost transactions T1 and T2 were distributed using this ownership definition.

Transaction	Transaction Date	Distributions
T1	2/01/2019	T1D1
	2/01/2019	T1D2
T2	6/01/2019	T2D1
	6/01/2019	T2D2

There’s a change in the joint operating agreement. A new stakeholder is added to the joint venture and ownership percentages are renegotiated, effective from 6/01/2019 to 12/31/2019. Now, the distributions that have the transaction dates on or within this new effective date range need to be reversed and redistributed using the revised ownership percentages.

The joint venture accountant changes the ownership definition effective end date to 5/31/2019. This change triggers the reversal process, which includes the automatic identification of distributions that need to be deleted, reversed, and rebilled as required. The first row in the following table shows the original ownership definition and the second row, the changed ownership definition.

Ownership Definition Name	Effective Dates	Stakeholders	Ownership Percentages
VENTUREOD1	1/01/2019 - 12/31/2019	S1, S2	2 stakeholders, 50% each
VENTUREOD1	1/01/2019 - 5/31/2019	S1, S2	2 stakeholders, 50% each

The distributions associated with transaction T2 are no longer valid because the transaction date, 6/01/2019, is after the new effective end date, 5/31/2019. If the distributions were invoiced, the system enables you to automatically reverse them in Oracle Joint Venture Management and create credit memos to back out the amounts in the invoices. If they were not processed, the system will delete them from the Joint Venture Distributions work area during the reversal process. There is no impact on distributions T1D1 and T1D2 because the associated transaction date is within the effective date range.

As part of the reversal process, the system cancels the original distributions and creates reversed distributions as illustrated in the following table:

Transaction	Transaction Date	Distributions	Stakeholders	Ownership Percentages	Distribution Line Type
T2	6/01/2019	T2D1	S1	50%	Canceled (original distribution line)
		T2D1RV	S1	50%	Reversed
		T2D2	S2	50%	Canceled (original distribution line)
		T2D2RV	S2	50%	Reversed

If the percent of ownership for a stakeholder has changed, Joint Venture Management automatically sends the reversed distributions to Oracle Receivables to create a credit memo for each distribution. After the Import AutoInvoice process creates credit memos, the system automatically retrieves the credit memo details from Receivables and updates the details to the reversed distributions. In this example, because the stakeholders are also on the revised ownership definition, the system will automatically redistribute transaction T2 using the new ownership percentages as shown in the following table. The system enables you to automatically redistribute even before the credit memo creation is complete.

Ownership Definition Name	Effective Dates	Stakeholders	Ownership Percentages
VENTUREOD1	6/01/2019 - 12/31/2019	S1, S2, S3	3 stakeholders, 25%, 25%, and 50%

During redistribution, the system creates a redistributed entry for each stakeholder included in the ownership definition. This is illustrated in the following table.

Transaction	Transaction Date	Distributions	Stakeholders	Ownership Percentages	Distribution Line Type
T2	6/01/2019	T2D1	S1	50%	Canceled (original distribution line)
		T2D1RV	S1	50%	Reversed
		T2D1RD	S1	25%	Redistributed
		T2D2	S2	50%	Canceled (original distribution line)
		T2D2RV	S2	50%	Reversed
		T2D2RD	S2	25%	Redistributed
		T2D3RD	S3	50%	Redistributed

You can review the redistributed entries before you create invoices or assign them to partner contributions, if applicable.