How Carried Interest Reversals Are Processed with the Retroactive Change in Ownership Method

For the most part, standard distributions and carried interest distributions are reversed and redistributed in the same way. The adjustment process performs the following actions on both types of distributions:

• Marks the distributions as Canceled in the Distribution Line Type column.
• For each canceled distribution, it creates a reversed distribution with the reversed amount and sets the distribution line type to Reversed.
• Redistributes the distributions according to the new carried interest ownership definition. The status of the redistributions is set to Available to Process and the distribution line type is set to Redistributed.
• For Distribution Only distributions in which the ownership percentage of the Distribution Only stakeholder didn’t change, both types of distributions are handled the same. The adjustment process changes the distribution line type in the standard distribution and the carried interest distribution to Redistributed.

However, there are some conditions in which the reversal of standard distributions and carried interest distributions is different, as described here.

Condition	Standard Distributions	Carried Interest Distributions
Standard distributions with a status of Available to Process, which indicates that they were never invoiced or journaled.	The adjustment process deletes the distributions.	Because the associated carried interest distributions might have been sent to the stakeholders in a payout report, the adjustment process doesn’t delete them. Instead, it reverses and redistributes the carried interest distributions.
Distribution Only distributions for a stakeholder whose ownership percentage changed in the new ownership definition due to renegotiated terms.	The adjustment process deletes the distributions.	Because the associated carried interest distributions might have been sent to the stakeholders in a payout report, the adjustment process doesn’t delete them. Instead, it reverses and redistributes the carried interest distributions.