Set Up a Nonoperated Joint Venture Definition

Use the Create Joint Venture Definitions application to create a joint venture definition for a nonoperated joint venture. The setup is similar to an operated joint venture definition, with some differences in the classification of the joint venture and stakeholders.

Classification of the Joint Venture

You set up the initial details as you would an operated joint venture definition, except that you set the Classification to Nonoperated.

Stakeholder Setup

For joint ventures classified as nonoperated, your role in the joint venture is that of a nonoperator. Therefore, to represent your role, you need to set up a stakeholder as a nonoperator. For the managing partner, you can set up a stakeholder record with the role of the operator. You can also set up the other stakeholders other than the managing partner as nonoperator stakeholders. This enables you to identify your role in the joint venture and use this information for reporting and auditing purposes.

Note the following fields when setting up your stakeholder record:

• Classification: Select Nonoperator.

• Invoicing Partner: Select the invoicing partner record for the managing partner (operator).

  Although you’re classifying yourself as a nonoperator stakeholder, you use the invoicing partner record of the managing partner (operator). This setup enables you to create payables invoices with the correct supplier details.

Ownership Definition Setup

To distribute the transactions identified for your nonoperated joint ventures, you create an ownership definition that reflects your ownership percentage in the joint venture. The ownership definition you create might not be the exact replica of the ownership definition that’s created by the operator. For example, you can set up an ownership definition with only you as the stakeholder if you’ve imported only your share of cost transactions in Joint Venture Management. Your ownership definition can include the other stakeholders if you’ve also imported their share of cost transactions.

Note: Make sure that you're the only stakeholder who’s set up to create invoices or journal entries. You should set up all other nonoperators and the operator as “Distribution Only” so invoices and journals aren't created for these stakeholders. You can include only one operator in the ownership definition.