8Identify a Transaction Date for Processing Joint Venture Transactions

Identify a Transaction Date for Processing Joint Venture Transactions

When processing transactions, Joint Venture Management uses the transaction date in each transaction to determine which date effective ownership definition to use to calculate the split. By default, for the transaction date, it uses the accounting date in transactions originating from subledger accounting; it uses the effective date for transactions originating from the general ledger. However, these dates might not capture the date the transaction took place or the date the service was performed, what some companies refer to as the service date or activity date. If the terms in a joint operating agreement require the processing of transactions by the date the transaction occurred, then you need to:

  • Set up Oracle Financials to capture a transaction date in subledger accounting and general ledger journals.

  • In the Joint Venture System Options, identify the sources of the transaction dates for subledger accounting and general ledger journals.

This optional configuration is typically a one-time setup. However, you can modify the setup if a change in the business process or joint operating agreement requires using a different date to process joint venture transactions. Once configured, the setup applies to transactions for all your joint ventures.

Set Up Oracle Financials to Capture a Transaction Date in General Ledger Journals

Set up a descriptive flexfield to capture a transaction date in general ledger journals. Descriptive flexfields enable you to expand the forms on the application page to accommodate additional information that is important and unique to your business. When complete, remember the name of the flexfield because you will need to select this flexfield in the Joint Venture System Options. See Define Flexfields for information on how to set up a descriptive flexfield.

Set Up Oracle Financials to Capture a Transaction Date in Subledger Accounting Journals

Oracle Financials uses supporting references to capture additional data in subledger journal entries at the line level. You can set up a supporting reference to capture a transaction date in journal entries for each subledger that contains your joint venture financials.

Make sure to set up a supporting reference to capture the transaction date in all event classes in subledger accounting that contain transactions for your joint ventures. For example, in the same supporting reference, you can define a transaction date for journal entries entered into various subledgers, such as Payables, Receivables, Expenses, Payroll, and so forth.

Supporting references are part of accounting methods in Oracle Financials. Accounting methods contain “journal entry rule sets” that determine how subledger journal entries are entered into each subledger account. You associate supporting references to journal entry rule sets to capture additional data in journal entries.

As you work through the tasks described here, refer to Manage Accounting Rules for more information about accounting methods, journal entry rule sets, and supporting references.

You must be a user with the Financial Application Administrator role to create supporting references. This role includes the Joint Venture Administrator role, so you can use it to set up supporting references and perform other joint venture administrator tasks.

Create a Supporting Reference to Capture a Transaction Date

  1. From the Navigator, select Others, Setup and Maintenance.

  2. On the Setup page, select the Financials offering and then select the Joint Venture Management functional area.

  3. In the list of tasks, select Manage Supporting References.

    Note: This is a shared task that is used by multiple products. It’s not specific to Joint Venture Management.
  4. On the Manage Supporting Reference page, click the Without Balances tab.

    You can set up supporting references with balances or without balances. Because this supporting reference is for a date, use Without Balances.

  5. Click Add Row (+ icon), and in the new row, complete these fields:

    • Name

    • Short Name

      Remember this name because you will need to select this supporting reference later in the Joint Venture System Options.

    • Description

      The following example shows a row for a supporting reference added for a transaction date:

      This image shows one record with the following values in separate columns from left to right: TRANSACTION_DATE, TRANSACTION_DATE, Joint venture transaction date, Active.
  6. With the new supporting reference row selected, scroll down to the Sources area and identify the source of the transaction date for each subledger:
    1. In the Sources area, click Select and Add (+ icon).

    2. On Select and Add: Sources, search for the source by Subledger Application and Event Class. In addition, you can search by Source if you know the name of the source.

      The following example shows the results of searching for a transaction date source in Payables accounts:

      This image shows the Select and Add: Sources section and the Search Results section for the TRANSACTION_DATE supporting reference with this search criteria: Subledger Application = Payables; Event Class = Invoices for the search criteria. The Search Results show five records in a table with Source, Event Class, and Description columns. The records contain the following data respective of the aforementioned columns: Invoice Data, Invoices, Date on the invoice; Invoice Description, invoices, Invoice Description; Invoice Discount Amount Taken, Invoices, Amount of discount taken on the invoice; Invoice Distribution Account, Invoices, Accounting flexfield identifier for account...; Invoice Distribution Accounting Date, Invoices, Invoice Distribution Accounting Date.
    3. Select the source row, which is “Invoice Date” in the preceding example, and click OK.

    4. Continue to add additional sources and related event classes where a transaction date is used.

      The following example shows sources for the transaction date in Payables and Receivables for various event classes:

      This image shows the Manage Supporting Reference section, which has to tabs: Without Balances and With Balances. The Without Balances tab is selected and contains a Supporting References section, with the focus on the highlighted row for the TRANSACTION_DATE supporting reference. The section below is related to the selected TRANSACTION_DATE row with TRANSACTION_DATE:Sources as the title of the section. The focus of this section is to show two records that show the sources for the selected supporting reference. The table has three columns: Subledger Application, Event Class, and Source. The rows contain the following data respective of these columns: Payables, Invoices, Invoice Date; Receivables, Invoice, Transaction Date.

      Next, associate this supporting reference to journal entry rule sets in the Oracle Financials accounting methods as described in the next topic.

Associate the Supporting Reference to Accounting Methods

Associate the supporting reference you created in the preceding task to an accounting method.

Note: Businesses can use many accounting methods, one for each chart of accounts. Each accounting method can have many journal entry rule sets for a subledger application. Each journal entry rule set can have many journal lines. You associate the supporting reference at the journal line level. It’s important that you associate this supporting reference to the applicable journal lines in the active rule sets for all the subledgers from where you bring in joint venture transactions. For example, if you bring in invoices and credit memos from Receivables into Joint Venture Management to be distributed and processed, you must associate the supporting reference to all the applicable journal lines (revenue, tax, freight, and so on) for the event classes, invoice and credit memo in all the active journal entry rule sets for Receivables. For Payables, your journal lines that you associate with the supporting reference can be miscellaneous expense, item expense, and so on. This will ensure the creation of accurate accounting entries because the transactions you bring into Joint Venture Management will be recorded with the correct transaction dates.

The following steps use the Payables subledger as an example. Use the steps as a guide to associate the supporting reference to other subledgers within the same or different accounting methods.

  1. Navigate to Setup and Maintenance.

  2. Select the Financials offering and then click the Payables functional area.

  3. Above the list of tasks on the right, click Show and select All Tasks.

  4. Locate and click the Manage Accounting Methods task.

  5. In the Search area, search on the accounting method that contains journal entry rule sets for the subledgers for a specific chart of accounts

  6. Click the link to the accounting method to edit it.

    The following example shows an accounting method for a chart of accounts named HEPPLedger. The Payables subledger contains a rule set for each event class: Credit Memos, Debit Memos, Invoices, Payments, and so forth. The rule set establishes the data required for a journal entry line for an event class.

    This image shows the Edit Accounting Method section with an accounting method name HEPP_Accounting in the Name field and other details related to the accounting method such as the short name, description, chart of accounts, and so forth. The focus of the image is to show the section below the accounting method, Journal Entry Rule Set Assignments. This section has multiple tabs: Payables which is selected, Cost Management, Assets, Receivables, Cash Management, Payroll, Receipt Accounting, Project Costing, Commercial Banking, Revenue. The table in this section has the following columns: Event Class, Event Type, Rule Set, Status, Effective Start Date, Effective End Date. The focus of this table is to show the first row that is highlighted, which contains the following data respective of the aforementioned columns: Credit Memos, All, Credit Memo Accrual Basis, Active, 1/1/51, m/d/yy.
  7. In the event class row, click the rule set to edit it.

    This is where you associate the supporting reference to a journal line for Payables.

  8. In the Journal Lines area, review if the journal lines that you want to associate with the supporting reference already exist. If you need to create a new journal line, click Add Row (+ icon) and select the following values to add a journal line rule for invoicing:

    • Line Type

    • Journal Line Rule

    • Account Combination Rule

    Note: If you have two journal line rules for invoicing, there can’t be an overlap or a gap in the effective dates. They must be successive.
  9. With the journal line highlighted, scroll to the Supporting References area below the Journal Lines area and click Add.

  10. Select the supporting reference and then save your changes.

    Note: The event class in the supporting reference must be the same as the event class in the journal rule set. For example, if one of the sources in the supporting reference is for the Invoicing event class, then the journal rule set must also be for the Invoicing event class.
  11. Continue to associate the supporting reference to the other journal lines as appropriate by following steps 9 and 10.

  12. Click Save and Close after you complete associating the supporting reference to all the applicable journal lines in this rule set. The system returns you to the Edit Accounting Method page.

  13. To associate the supporting reference to the journal lines of another rule set, click the rule set to edit it. Then, follow steps 8 through 10.

  14. Change the status to Active.

  15. Click Save and Close.

    This returns you to the Accounting Method page.

  16. Make sure the status of the accounting method is Active and then save it.

  17. Continue to add the supporting reference to journal line rules in other accounting methods as appropriate.

Specify Transaction Date Sources in the Joint Venture System Options

After setting up Oracle Financials to capture the transaction date in subledger accounting and general ledger journals, you need to specify the source of the transaction date in the Joint Venture System Options. This enables Joint Venture Management to use these dates to determine how transactions are processed for all your joint ventures.

You must be a user with the joint venture administrator role (ORA_JV_JOINT_VENTURE_APPLICATION_ADMINISTRATOR_JOB) to access the Joint Venture System Options work area.

  1. Navigate to Setup and Maintenance and select the Joint Venture Management functional area under the Financials offering.

  2. Click the Manage Joint Venture System Options task.

  3. In the Joint Venture System Options work area, click the GL Transaction Date Field drop-down list and select one of the following sources for the transaction date in general ledger transactions:

    • General ledger effective date. The system will use this date by default if you don’t complete this field.

    • General ledger reference date

    • General ledger flexfield. If a flexfield was set up to capture this date, select the flexfield.

  4. Click the SLA Transaction Date Name drop-down list and select the supporting reference configured to capture the transaction date in subledger accounting transactions.

    This list displays all supporting references set up for subledger accounting that contain a Date data type. Make sure that you select the supporting reference you set up to capture the transaction date to process transactions from subledger accounting.