Derive Cutback Accounts for Carried Interest Revenue Amounts

Cutback accounts are accounts in your general ledger for posting amounts from carried interest journals for revenue.

Carried interest journals for revenue include lines with distributed revenue amounts. For each line, an invoice distribution is written to the original account of the source transaction. You can use this account for the cutback account or you can specify a different account to use. The transaction sources for revenue can include:

Revenue transactions in subledger accounting and general ledger (distribution type R)
Manual joint venture source transactions for revenue created in Joint Venture Management (distribution type V)

Here are your options for determining the cutback account for carried interest journals with distributed revenue amounts.

Cutback Account Option	Business Purpose	Implementation Action
Use the account on the source transaction.	With this option, the balance of the accounts from the source transaction will contain the net amount for the managing partner.	This is the default behavior. If you use this option, when users set up joint venture definitions, they must enable the “Exclude joint venture transactions” option. This prevents these transactions from being identified and processed by Joint Venture Management. See Exclude Joint Venture Invoices and Journals from Oracle Joint Venture Management Processing for more information.
Use a different account than the account on the source transaction.	With this option, all balances of the accounts from the source transaction will contain the gross amount for the joint venture.	Set up subledger accounting rules to override the source transaction account with a different account. See Use Subledger Accounting Rules to Derive Cutback Accounts for Carried Interest Journals with Revenue Amounts for more information. If you use this option, when users set up joint venture definitions, they must perform either of the following actions: Enable the “Exclude joint venture transactions” option in each joint venture. When identifying distributable accounts for the joint venture, they must make sure the partner account isn’t included in the list of distributable accounts.

Cutback Account Option

Business Purpose

Implementation Action

Use the account on the source transaction.

With this option, the balance of the accounts from the source transaction will contain the net amount for the managing partner.

This is the default behavior.

If you use this option, when users set up joint venture definitions, they must enable the “Exclude joint venture transactions” option. This prevents these transactions from being identified and processed by Joint Venture Management. See Exclude Joint Venture Invoices and Journals from Oracle Joint Venture Management Processing for more information.

Use a different account than the account on the source transaction.

With this option, all balances of the accounts from the source transaction will contain the gross amount for the joint venture.

Set up subledger accounting rules to override the source transaction account with a different account. See Use Subledger Accounting Rules to Derive Cutback Accounts for Carried Interest Journals with Revenue Amounts for more information.

If you use this option, when users set up joint venture definitions, they must perform either of the following actions:

Enable the “Exclude joint venture transactions” option in each joint venture.
When identifying distributable accounts for the joint venture, they must make sure the partner account isn’t included in the list of distributable accounts.