Setup for Carried Interest Journals Related to Revenue

The accounting of carried interest journals for revenue requires the following accounts:

• Carried interest accounts

  Revenue amounts from carried interest journals are entered as a credit to carried interest accounts. These accounts are the accounts used by the managing partner to account for revenue being carried for nonconsenting stakeholders.

• Revenue cutback accounts

  Revenue amounts from carried interest journals are entered as a debit to cutback accounts for the joint venture. Capturing these amounts in cutback accounts enables a managing partner to report on its actual revenue excluding revenue being carried for nonconsenting stakeholders.