What You Need to Know About Oracle Fusion Cloud Financials
Understanding the business process model in Oracle Fusion Cloud Applications will help you understand how to set up Oracle Joint Venture Management to identify the accounts that contain your joint venture transactions.
The following table provides an overview of the parts of the business process model that pertain to the identification and processing of transactions through Joint Venture Management:
| Business Process Model Components | Relationship to Joint Venture Management |
|---|---|
| Business unit | In Oracle Fusion Applications, business units define many business functions that can be rolled up in a management hierarchy. A business unit can process transactions on behalf of many legal entities and has the responsibility for its profit and loss. In Joint Venture Management, you specify the business unit in Oracle Fusion Cloud Financials in which your joint venture financials are managed. Selecting a business unit automatically identifies the chart of accounts (COA) in the primary ledger of the business unit. |
| Chart of accounts |
The chart of accounts enables tracking of cost center, account, and other segment levels. In the Joint Venture System Options, you specify the segment label associated to the primary segment in the Oracle Financials chart of accounts where the financial transactions of all your joint ventures are managed. By default, Joint Venture Management uses the segment associated with the Cost Center Segment label. But you can specify a different segment label in the system options if your joint venture transactions are managed under a segment with a different segment label. |
| Ledgers |
Oracle Fusion Applications reflect the traditional segregation between the general ledger and associated subledgers. Transactions are captured in the subledgers and periodically posted in detail to the primary ledger in subledger accounting. Transactions are posted in summary or in detail from the primary ledger in subledger accounting to the general ledger. As part of the day-to-day business of managing the operations of a joint venture, the managing partner pays expenses and receives revenue. These transactions are entered in the appropriate subledger such as Payable Invoices, Receivable Invoices, just to name a few. All transactions entered into these subledgers are eventually posted in detail to subledger accounting. Typically, these types of transactions are directly related to a specific joint venture. The second source of transactions for Joint Venture Management is the general ledger. Joint Venture Management only identifies transactions in the general ledger that did not originate from subledger accounting. These transactions typically are indirect charges or allocated amounts to a joint venture. |
Joint Venture Management uses the details that you enter in joint venture definitions to identify the accounts in Oracle Financials that contain the transactions for your joint ventures. As shown in the following illustration, Joint Venture Management processes the transactions to create distributions with the calculated amount for each partner and create invoices for expense amounts.
