Enable Penalty Calculations and Payout

If you plan to use penalty definitions for a carried interest agreement, you must enable the carried interest agreement to calculate penalties and track balances.

To do so, select "Calculate penalty and balances." Optionally, select "Determine payout" to enable payout tracking.

• Calculate penalty and balances

  Enables Joint Venture Management to calculate penalties on carried interest distributions and track carried and penalty balances over time, regardless of whether payout is determined.

• Determine payout

  Available only when “Calculate penalty and balances” is selected. Enables the application to track payout, which occurs when accumulated carried revenue exceeds accumulated carried costs and penalties. When payout is reached, the application automatically ends the stakeholder group and carried interest ownership definition. If payout is reached for all stakeholder pairs, the application also ends the carried interest agreement.

Make sure to enable the processing in all impacted carried interest agreements. For example, if you set up a penalty definition at the joint venture level, you need to enable the penalty processing in all applicable carried interest agreements for the joint venture.

See Create Penalty Definitions for more information.