Example of Reversing Joint Venture Distributions Manually

This example illustrates how you can selectively reverse joint venture distributions by manually initiating the reversal from the Joint Venture Distributions work area.

A joint venture definition has three stakeholders with ownership percentages as illustrated in the following table.

Stakeholder	Ownership Percentage
Stakeholder 1 (Managing partner)	50
Stakeholder 2	25
Stakeholder 3	25

Cost transactions T1 and T2 are distributed to the stakeholders using this ownership definition.

Transaction	Stakeholder	Distributions
T1	Stakeholder 1 (Managing partner)	T1D1
	Stakeholder 2	T1D2
	Stakeholder 3	T1D3
T2	Stakeholder 1 (Managing partner)	T2D1
	Stakeholder 2	T2D2
	Stakeholder 3	T2D3

The joint venture accountant creates a receivables invoice for each stakeholder’s distributions to reimburse the managing partner for these costs.

Stakeholder 2 raises a dispute to the managing partner that the invoice that they received for T1D2 distribution is for a different expenditure and not the one they agreed to pay. The managing partner confirms that this claim is correct and decides to absorb this distribution. The distribution must be reversed and a credit memo created to back out the invoice amount. The distribution must then be reassigned to the managing partner.

You initiate the reversal manually through the Reverse option in the Joint Venture Distributions work area. This action changes the status of the distribution to “Ready to Reverse” as illustrated in the following table:

Distribution	Distribution Line Type	Distribution Status
T1D2	Original	Ready to Reverse

The joint venture accountant then runs the Create Joint Venture Distribution Reversals process. The process cancels the original distribution (T1D2) and creates two new distributions, T1D2RV and T1D2RA, as illustrated in the following table:

Distribution	Distribution Line Type	Distribution Status
T1D2	Canceled	Process Complete
T1D2RV	Reversed	Available to Process
T1D2RA	Reassigned	Ready to Reassign

T1D2RV is the reversed distribution that must be processed as follows to create a credit memo:

1. The joint venture accountant runs the process to send the reversed distribution to Receivables.
2. An accounts receivable specialist creates the credit memo using the Import AutoInvoice process and posts the credit memo.
3. The joint venture accountant then runs the process to retrieve the credit memo information for the reversed distribution.

T1D2RA is the new distribution that’s created to make up for the canceled distribution. The joint venture accountant uses the Reassign Stakeholder option in the Joint Venture Distributions work area and reassigns this distribution to the managing partner. The status of this distribution changes to Available to Process as illustrated in the following table:

Distribution	Distribution Line Type	Distribution Status
T1D2RA	Reassigned	Available to Process

This reassigned distribution can then be processed to create a receivables invoice or a journal entry to account this cost to the managing partner.