How Distribution Reversals Affect Partner Contributions
When you reverse distributions that were originally processed with partner contributions, the reversal process automatically updates the respective partner contribution amounts. It also carries the partner contribution number from each original distribution to the corresponding reversed distribution.
If an original distribution has split lines and a partner contribution covered one of those lines, the reversal process creates a reversed distribution for each split line. The partner contribution number from the original distribution is added to all the corresponding reversed distributions.
The following table describes how the reversal process adjusts the distribution amounts to partner contributions based on the distribution type:
| Distribution Type | Adjustment Processing | Updates in Joint Venture Distributions Work Area |
|---|---|---|
| Cost distributions with a debit amount |
The amount is returned to the stakeholder's partner contribution from which it was originally drawn. This increases the partner contribution open amount. |
The debit amount from the original distribution is moved to the reversed distribution as a credit amount. |
|
Cost distributions with a credit amount |
The amount is drawn from the partner contribution to which it was originally added. This decreases the partner contribution open amount. If the partner contribution doesn’t have enough open amount to draw from, the distribution is skipped from reversal processing. For more information, see the next topic. |
The credit amount from the original distribution is moved to the reversed distribution as a debit amount. |
When the Reversal Process Skips a Cost Distribution with a Credit Amount
If a partner contribution doesn’t have enough open amount to cover the reversal of a cost distribution with a credit amount, the Create Joint Venture Distribution Reversals process skips the reversal of the distribution.
To complete the reversal for these distributions, perform the following tasks:
-
Replenish the partner contribution or create a new partner contribution for the stakeholder with enough open amount to cover the distribution amount.
-
Run the Assign and Draw Partner Contributions process.
For information on how to run this process, see Draw from Partner Contributions.
The process draws from the partner contribution open amount, completing the reversal. If the partner contribution still doesn’t have enough open amount, standard split processing applies. For more information, see How Partner Contributions Are Processed When a Distribution Can’t Be Fully Covered.
Example of Processing a Partner Contribution to Account for Debit and Credit Cost Distribution Reversals
When a stakeholder has cost distributions of different line types with both credit and debit amounts, the reversal process first adds the credit amounts to the partner contribution regardless of the distribution line type. It then draws from the partner contribution to cover the debit amounts. This can increase the partner contribution open amount to completely cover the debit amounts.
The following example illustrates how partner contributions are processed when credit and debit distributions of different line types exist for a stakeholder:
The open amount in a stakeholder’s partner contribution = 50 USD
The stakeholder has 4 cost distributions: 2 debits and 2 credits of line types “Original” and “Reversed” as illustrated in the following table:
| Distribution | Distributed Debit | Distributed Credit | Distribution Line Type |
|---|---|---|---|
| D1 | 100 USD | None | Original |
| D2 | 200 USD | None | Reversed |
| D3 | None | 120 USD | Original |
| D4 | None | 150 USD | Reversed |
The process adds the credits to the open amount and draws from the open amount for the debits in this order:
Totals the distributed credits = 120+150=270 USD
Adds the total distributed credit to the open amount = 270+50=320 USD (new open amount)
Draws from the open amount to cover the distributed debits=320-(100+200)=20 USD