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.
Consider a $1,000 transaction distributed using the following ownership percentages:
| Stakeholder | Ownership Percentage | Distribution |
|---|---|---|
| Stakeholder 1 (Managing partner) | 50% | 500 |
| Stakeholder 2 | 25% | 250 |
| Stakeholder 3 | 25% | 250 |
After invoices were created, stakeholder 2 disputed the invoice for their $250 distribution, claiming the expenditure was incorrect. The managing partner confirmed the claim and decided to absorb the cost.
To reverse the distribution, the joint venture accountant manually selects this distribution for reversal in the Joint Venture Distributions work area. The distribution status changes to Ready to Reverse, as illustrated in the following table:
| Distribution | Distribution Line Type | Distribution Status |
|---|---|---|
| 250 | Original | Ready to Reverse |
The joint venture accountant then runs the Create Joint Venture Distribution Reversals process. The process cancels the original distribution and creates:
- A reversed distribution to generate a credit memo
- A reassigned distribution to transfer the cost to another stakeholder
| Distribution | Distribution Line Type | Distribution Status |
|---|---|---|
| 250 | Canceled | Process Complete |
| -250 | Reversed | Available to Process |
| 250 | Reassigned | Ready to Reassign |
The joint venture accountant then reassigns the $250 reassigned distribution to the managing partner. The reassigned distribution can subsequently be processed to create a Receivables invoice or journal entry for the managing partner.