Use Subledger Accounting Rules to Derive the Cutback Account

This topic provides examples of how to use subledger accounting rules to override the following accounts with a different account:

• The account from the source transaction in distributions originating from subledger accounting, the general ledger, and manual joint venture source transactions
• The account from joint venture overhead transactions
• The account from the partner contribution line on internal transfer journals

Example of Subledger Accounting Rules to Override the Account from Subledger Accounting, General Ledger, and Manual Joint Venture Source Transactions

For this setup, use your copy of the provided Cost Transfer journal entry rule set to set up subledger accounting rules to override the account from the source transaction. You can override any segment in the account such as the natural account segment or the cost center segment.

Here are the tasks that you need to perform, followed by an example of a mapping set for mapping costs in internal transfer journals to cost cutback accounts:

1. Identify cost cutback accounts.
2. Create a mapping set to map the following distribution types from internal transfer journals to the cutback accounts:
   • A - Assets
   • B - Billable Assets
   • E – Expenses
   • S – Manual cost joint venture source transactions created in Joint Venture Management
3. Create an account rule for the mapping set.
4. Add the account rule to your copy of the provided Cost Transfer journal entry rule set.
5. Assign the journal entry rule set to the accounting method in the primary ledger of the joint venture.
6. To complete the setup, you must run the Update Subledger Application Options program before creating any events for the primary ledger and Joint Ventures application.

The following image shows an example of a mapping set for overriding the account from subledger accounting, general ledger, and manual transactions. The purpose of the mapping set is to replace the natural account segment in the account from the transaction.

As shown in the example, make sure to specify these values in your mapping set:

• Output Type. Select Segment.

  Note: When you access Create Mapping Sets from the Joint Venture Management functional area, Joint Ventures is selected by default for the subledger application. You can’t change this value.
• Input Source. Search for and select Distribution Type, the one that’s associated with the Cost Transfer event class.
• Chart of Accounts. Select the chart of accounts associated with the primary ledger of the joint venture, which is HEPPLedger in this example.
• Mappings. Add mappings for each distribution type. The example shows the mapping for each type of distribution:
  • Distribution type A (Asset) to cutback account 17999 (JV Capital Cutback)
  • Distribution type B (Billable Asset) to cutback account 17999 (JV Capital Cutback)
  • Distribution type E (Expense) to cutback account 59999 (JV Expense Cutback)

  In this example, distributions with a value of A will output a value of 17999 for the HEPPAccount segment. Likewise, distributions with a value of B will output 17999 and distributions with a value of E will output 59999. Also, if you’re using manual costs, you’ll need to add a row for the cutback account for manual costs, which is distribution type S.

Example of Subledger Accounting Rules to Override the Account from Joint Venture Overhead Transactions

For internal transfer journals with overhead charges, instead of a cutback account, you need to account for overhead amounts in a separate cost recovery or revenue account, depending upon your business needs.

To derive the accounts, perform the same tasks that you would to derive a cutback account. When you set up a mapping set, map the following distribution types from internal transfer journals to the cost recovery or revenue account:

• Distribution type F (Fees and other charges)
• Distribution type H (Overhead)

Example of Subledger Accounting Rules to Override the Account from the Partner Contribution Line

If distributed costs for stakeholders are covered by partner contributions, internal transfer journals include the following additional journal lines to account for the partner contribution amount:

• A credit to the stakeholder’s partner contribution accounts
• A debit to the joint venture’s partner contribution accounts

To enable the accounting of these entries, in your copy of the Cost Transfer journal entry rule set, you must modify both of the following predefined journal line rules:

• Cost Transfer - Internal Stakeholder Partner Contributions

  Click in the column representing the cost center segment and select Stakeholder Cost Center, which is a predefined account rule used to retrieve the stakeholder’s cost center. The cost center value is used in deriving the account for the credit entry.

  Note: Although the default name refers to internal stakeholders, this rule can apply to both internal and external stakeholders. If you prefer, you can rename this rule to avoid confusion.

• Cost Transfer - JV Partner Contribution, which is for the debit entry

  Click in the column representing the cost center segment and select the blank value. Make sure there’s no value selected for the cost center segment.

  For this journal line rule, there’s an account rule named Partner Contribution Account assigned by default to the Account Combination Rule. This account rule is used to retrieve the partner contribution account for the debit entry. The partner contribution account is specified by joint venture accountants when they create partner contributions for stakeholders.

This image shows an example of the predefined journal line rules modified as described:

<insert image jv-subledger-pc-journal-lines.png>