How Reversals are Processed Based on the State of the Distributions

Distributions That Have Been Accounted

An invoiced distribution is considered accounted only after the accounts used to post the corresponding invoice to the General Ledger are updated in the joint venture distribution. An internal transfer journal is accounted only when the status of the internal transfer journal is updated to “Final Accounted.”

If at least one distribution associated with a transaction is accounted, the adjustments process performs these actions:

Cancels all the original distributions, setting the distribution line type to Canceled.
Creates a distribution with a distribution line type of Reversed for each canceled distribution to offset the original amount.

Reversed distributions created from accounted distributions have an initial status of Available to Process. These distributions must be further processed to create credit memos. See Complete the Accounting of Reversed Distributions for more information.

Note: Each Reversed distribution record includes the reason for the reversal. This reason is specified by the user when setting up the reversal method.
Updates the status of the transaction whose distributions were reversed.
If reversing distributions due to a retroactive ownership change or ownership correction, the transaction status changes to Available to Process so the transaction can be redistributed.
If performing a mass reversal of distributions, you have the option to reset the status of the transactions to Available to Process or Reversed.

Distributions That Have Been Invoiced or Journaled but Not Accounted

If an unaccounted invoice or internal transfer journal exists for a distribution, the reversal process won’t reverse any distributions associated with the transaction. In the Joint Venture Distributions work area, unaccounted distributions have a status of Accounting in Progress.

Distributions That Haven't Been Invoiced or Journaled

For distributions that you haven't created invoices or journals for, the adjustments process performs the same actions as it does for accounted distributions, with one difference—the reversed distributions are created in Process Complete status.

When reversing such distributions due to retroactive ownership changes or ownership corrections, the process behaves differently if there’s no ownership change for a stakeholder in the new or updated ownership definition. In this case, the process changes the original distribution line type to Canceled but doesn’t create reversed distributions. During redistribution, it creates a redistributed distribution for the stakeholder.

You can’t manually reverse a distribution that hasn’t been invoiced or journaled.

"Distribution Only" Distributions

How “Distribution Only” distributions are processed for reversals depends on the reversal method that you use.

Retroactive ownership changes, ownership corrections, and mass reversals

If reversing “Distribution Only” distributions using any of these methods, the adjustments process performs these actions:

Cancels the original distributions, setting the distribution line type to Canceled and the distribution status to Process Complete.
Creates distributions with a distribution line type of Reversed to offset the original distributions. These distributions have a status of Process Complete and are marked as “Distribution Only.”
Updates the status of the transaction whose distributions were reversed.

If reversing distributions due to a retroactive ownership change or ownership correction, it changes the transaction status to Available to Process so that the transaction can be redistributed.

If performing a mass reversal of distributions, you have the option to reset the status of the transactions to Available to Process or Reversed.

Note: A stakeholder may be changed to "Distribution Only" through a retroactive ownership change or ownership correction. If the stakeholder has an invoiced distribution, the adjustments process creates a reversed distribution in Available to Process status. This enables you to create a credit memo for the invoiced amount.

During redistribution, the process creates a redistributed distribution marked as "Distribution Only" to prevent further billing to the stakeholder.

Manual reversals

If performing a manual reversal of "Distribution Only" distributions, the process cancels the distributions and creates the following distributions for each canceled distribution:

A distribution with a distribution line type of Reversed, a status of Process Complete, and marked as “Distribution Only.”
A distribution with a distribution line type of Reassigned, a status of Ready to Reassign, and marked as “Distribution Only.”

Distribution States That Prevent Reversal

If any distribution associated with a transaction is in one of the following states, the reversal process skips all distributions for that transaction:

On Hold
In Error
Invoicing in Progress
Accounting in Progress
Credit Memo in Progress

Review Report for List of Skipped Reversals

The reversal process generates a text file that includes a list of transactions whose distributions were not reversed. You can use these details to identify and review the distributions and determine how you want to handle them.