Joint Venture Accounting (JVA)

Purpose
Companies typically form joint venture partnerships to minimize risks involved in capital intensive
operations that demand a long payback period. A joint venture partnership consists of an
operating partner (operator) and one or more non-operating partners who combine monetary or
personnel resources to share a project’s expenses and revenues. The operator manages the
venture, arranges venture activities, and maintains accounting records. The operator remits
venture expenses, collects revenues, and distributes these to the partners, according to their
ownership shares. SAP JVA is a complete accounting system for joint ventures.

Introduction to Joint Venture Accounting (JVA)

Definition
SAP designed JVA for joint venture operations. SAP JVA captures all expenditures and other
joint venture transactions by using functions from Financial Accounting (SAP FI), Controlling
(SAP CO), Asset Management (SAP AM), Materials Management (SAP MM), Plant Maintenance
(SAP PM), and Project System (SAP PS). By working closely with customers and implementation
partners, SAP ensures that JVA facilitates smooth management of joint ventures, with great
flexibility for growth.

Joint Venture Accounting (JVA) Objects

Definition
The primary SAP JVA objects are described in the following table.

Object name Description

Joint Operating Agreement (JOA) A JOA is a formal agreement that specifies the conditions
for a joint operation. This covers the interests of the
partners and their properties, as well as overheads and
penalties.
Joint Venture This is an association of two or more partners, formed to
share a venture’s risks, costs, and revenues. Each
partner’s share is proportional to their undivided interest
in the venture.
Equity Type The JOA has different development stages, such as
engineering and design, construction, and production.
Different partners participate at each stage. JVA
manages the different stages by using equity types. An
equity type explains a particular association of partners.
This definition may be related to time, phase or purpose
and is linked with a specific equity group.
Equity Group An equity group represents an association of venture

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 partners and their interests. An equity group may consist
of all or some of the venture partners.
Joint Venture Partner This is a partner mentioned in the JOA with an undivided
interest in a venture. One partner, called the operator,
manages the operation. The remaining non-operating
partners share expenses and revenues.
Recovery and Billing Indicators You assign a recovery indicator to a cost object to
indicate whether or not expenses, posted using the cost
object, are billable to JVA partners. You assign billable
costs to the appropriate partners. Non-billable expenses
are assigned to the operator. Billing indicators are
assigned to billable postings and identify the type of
posting involved, including cash call, normal expenditure,
and audit adjustment.

Use
The JOA specifies the relationship between partners, joint ventures, and rules for cost calculations. Joint
ventures, equity types, and equity groups are assigned to a JOA. Joint venture partners are assigned to
equity groups. A joint venture can belong to only one JOA. However, multiple ventures can belong to the
same JOA. You can assign multiple equity groups to one JOA, and you can assign the same equity group to
multiple joint ventures.

Structure
The following diagram shows the relationship between SAP JVA objects.

SAP JVA Business Object Structure

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Common SAP JVA activities include setting up and maintaining JVA objects.

JVA Integration Activities

Use
SAP JVA data is linked to data in other SAP components. The Joint Venture Integration Manager
(JVIM) is the interface between documents created in a standard SAP component and SAP JVA.
The JVIM processes documents booked in a standard SAP component that have JVA related

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data, and then produces an SAP JVA document. Conversely, the JVIM transfers documents
booked in SAP JVA to the relevant standard component and then a document is created in the
standard component. SAP JVA receives the following documents:

MM documents – SAP JVA receives only those documents that also update FI.

SD documents – SAP JVA receives only documents that will also update FI (especially
invoices). Statistical and parked documents are excluded.

CO documents – Statistical lines are excluded.

FI-SL documents – SAP JVA will only use actual documents that have a RI or billing indicator.

Integration
SAP JVA receives the original documents and creates additional JVA documents. The SAP JVA
documents contain additional venture information, including the joint venture, equity group, and
recovery (RI) indicator. Some lines of the SAP JVA document can be split, such as the vendor,
customer, and tax information lines.

JVIM Line Item Splitting

The JVIM splits relevant document lines (tax lines, discount lines, vendor lines) based on the
venture and cost object information of the split basis lines. Each relevant document line is split
into as many lines as there is different venture and cost object information in the split basis.

For example, the following FI document has document lines 2, 3, 4 as split basis, while
document lines 1 and 5 are subject to splitting.

Line Account Cost Object Venture EqGr RI Amount

1 Vendor 9,900-
2 Material CC1 V1 E1 BI 2,000
3 Material CC1 V1 E1 BI 3,000
4 Material CC2 V2 E2 BI 4,000
5 Tax 900

The three split basis lines contain two different combinations of venture and cost object
information, such that document lines 1 and 5 are split in the SAP JVA document as
follows:

Line Account Cost Object Venture EqGr RecInd Amount FI Line

1 Vendor CC1 V1 E1 BI 5,500- 1
2 Vendor CC2 V2 E2 BI 4,400- 1

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3 Material CC1 V1 E1 BI 2,000 2
4 Material CC1 V1 E1 BI 3,000 3
5 Material CC2 V2 E2 BI 4,000 4
6 Tax CC1 V1 E1 BI 500 5
7 Tax CC2 V2 E2 BI 400 5

You can split lines into as many lines as dictated by the split basis. In addition, the SAP
JVA document stores information on which split basis line relates to a specific line that
was split.

To allow this, there are two fields in the SAP JVA document table JVSO1:

o XSBL is marked if the document line is part of the split basis.

o SBREFLN contains a running number that links the split basis lines to the split
lines.

If you split lines as dictated by the split basis the SAP JVA document would look like the
following table:

Line Account Cost Object Venture EqGr RI Amount FI Line Split# Split basis
1 Vendor CC1 V1 E1 BI 2,200- 1 1
2 Vendor CC1 V1 E1 BI 3,300- 1 2
3 Vendor CC2 V2 E2 BI 4,400- 1 3
4 Material CC1 V1 E1 BI 2,000 2 1 X
5 Material CC1 V1 E1 BI 3,000 3 2 X
6 Material CC2 V2 E2 BI 4,000 4 3 X
7 Tax CC1 V1 E1 BI 200 5 1
8 Tax CC1 V1 E1 BI 300 5 2
9 Tax CC2 V2 E2 BI 400 5 3

Effects on Customizing
You can use the JVIM line splitting functions on company code level within the
implementation guide (IMG) for SAP JVA. To do this, use the following menu path in the
IMG:

Joint venture accounting -> Environment -> JVA Company Configuration -> Detailed Data
and select the flag 'Split by line item'.

All SAP JVA documents have the following identifying information:

• Reference document number - links the SAP JVA document to the original document
• Reference document line - links the SAP JVA line to the original document line
• Reference activity - contains the original activity (for example, RFBU for most FI
documents)

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 • JVA document number - identifies the document with a unique joint venture number
• JVA activity - contains the executable joint venture activity

JVA activity

The JVA activity is derived from the original activity. It can have the following values:

Joint Venture Cutback (JVCB)

JVCB is an activity that is set for all GB01 postings created during cutback. It is not used for the
FI postings created by Cutback.

Joint Venture CO (JVCO)

JVCO is set for all joint venture documents created from CO documents. Some CO processes
create both a CO and an FI document. In this case, this activity is only used for the joint venture
document created from the CO document.

Joint Venture Equity Change (JVEC)

JVEC is used for all GB01 postings created in the pre-cutback equity change phase.

Joint Venture FI (JVFI)

JVFI is used for all joint venture documents created from FI or SD documents.

Joint Venture MM (JVMM)

JVMM is used for all joint venture documents created from MM documents.

Joint Venture Production Month (JVPM)

JVPM is used for production month processing. This allows you to update an additional FI-SL
ledger for documents that originate in FI and MM. JVPM documents are created if the production
month field PRODPER in JVSO1 is complete. All document lines with an entry in the PRODPER
field will result in the following:

• A line is created in the first new document with posting date, production month, and
activity JVPM. This document posts the values under the production month period.
• A new line is created in the second document with the normal posting date, activity
JVPM, and reversed amounts and quantities. This document reverses the FI view for this
ledger.

Report writer, allows you to report on Ledger 4A or on an FI-SL ledger with the usual joint venture
activities, to get the financial view. You can also report on a ledger with the financial view and on
a ledger with activity JVPM to get the view for the production month. To complete the field in
JVSO1, you must use the joint venture substitution. Possible entry fields include the document
date (header) or field ABPER (line level).

Joint Venture Suspense (JVS1)

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JVS1 is set for all postings initiated from the suspense process.

Joint Venture Unsuspense (JVS2)

JVS2 is set for all postings initiated from the unsuspense process.

Balanced Books by Venture (JVJV)

JVJV can appear in all types of joint venture documents. It is set for the balanced books by
venture lines, which are additional lines in the joint venture document with reference document
line zero.

Even though the activities listed below begin with the letters J or JV, they
are derived from the originating application and are only used as a
reference activity:

o JVIU – Joint Venture Actual Assessment

o JVIV – Joint Venture Actual Distribution
o JRIU – Segment Reverse Actual Assessment
o JRIV – Segment Reverse Actual Distribution
o JRPU – Segment Reverse Plan Assessment
o JRPV – Segment Reverse Plan Distribution
o JVPL – Joint Venture Plan Data from CO
o JVU1 – Joint Venture Actual Primary Cost Transfer

Prerequisites
To create a link between SAP components, several configuration prerequisites are required
before you set up and activate a company in SAP JVA. Your system administrator or
implementation team must complete these steps prior to setting up SAP JVA master data or
performing transactions. A list of these prerequisites is presented in the beginning of each
chapter. You should refer to the IMG for detailed information regarding configuration. To ensure
document values correspond between applications, you must set all fields in the SAP JVA tables
to unchangeable in FI configuration. To set the fields to unchangeable, you clear the Field is
modifiable indicator on the Document Change Rules: Details screen.

The activity, RFRK "Reconciliation posting CO > FI", is not used in SAP JVA because
SAP JVA uses the CO transactions directly.

Joint Venture Accounting (JVA) Processes

Definition
The following is a list of primary SAP JVA processes:

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 • Material and asset transfers between ventures
• Allocations and settlement with ventures
• Equity group change management
• Equity group suspense
• Partner carried interest
• Cash calls
• Partner netting (expense with revenue)
• Parallel currencies
• Partner billing including EDI inbound & outbound
• Cutback to venture partners including intercompany
• Joint venture audit reporting

Master Data
Definition
SAP Joint Venture Accounting (JVA) master data covers the following areas:

• Creating and Changing Joint Operating Agreements

• Setting Up Equity Groups
• Setting Up and Changing a Joint Venture
• Assigning Equity Groups and Equity Types
• Setting up Joint Venture Accounting Cost Objects: Overview
• Creating and Changing Cost Centers
• Creating and Changing Internal Orders
• Creating and Changing Projects and Work Breakdown Structures
• Maintaining and Changing Business Partners
• Suspending and Removing Projects, Partners, and Equity Groups from Suspense
• Intercompany Mapping
• Maintaining Prepaid Inventory Materials

Joint Operating Agreements (JOAs)

Definition
A JOA is a contract specifying the conditions of a joint venture operation. JOAs range in
complexity. A JOA can include provisions for legal, tax, financial, engineering, and other
considerations negotiated by the venture partners. Within SAP, the JOA relates active joint
ventures and equity groups to ensure proportional distribution of costs to the partners during
cutback. The JOA also allows for overhead calculations and non-consent and non-signatory
penalties that can be included in the costs distributed during cutback. In the SAP Joint Venture
Accounting (JVA) component, the key data objects of a JOA are:

• Joint ventures
• Equity groups - an equity group contains a group of JVA partners
• Cost calculations rules, percentages, and sets of excluded accounts for the joint ventures
in the JOA
• Penalty categories for carried interest (CI) and net profit interest (NPI) processes

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Creating a Joint Operating Agreement (JOA)
Prerequisites
Your system administrator or implementation team should set up the following prerequisites in
Financial Accounting (FI) and Joint Venture Accounting (JVA) before you create a JOA:

• Joint venture company

• JOA number range
• JOA class
• FI customer (A/P) and vendor (A/R) accounts for the joint venture partners to be assigned
to equity groups within the JOA

Menu Path

1. On the SAP Easy Access menu, choose Joint venture accounting → Master data → Joint
operating agmt → Maintenance.
2. On the Joint Operating Agreement: Initial screen, choose Create

The Joint Operating Agreement:Create screen appears.

Procedure
1. Leave the Joint Oper. Agr field blank on the Joint Operating Agreement: Create screen if your
system is configured to assign the code automatically. Enter a code for the new JOA in the Joint
Oper. Agr field if your system is configured to assign the code externally.

The range of possible JOA codes has been set up in the configuration of your
system. JOA codes are either automatically assigned by the system (Internal
Code) or assigned by the user (External Code)

2. Enter the Company code.

3. Enter the JOA class.

4. If you are using an existing JOA as a model for the new JOA, enter the code for the model JOA
in the Reference Joint Oper. Agr field.

5. Choose ENTER. The Create Joint Operating Agreement Basic Screen will be displayed.

6. Enter a JOA description in the Description field.

7. Choose SAVE. The system returns to the initial screen. A system message confirms that the
JOA has been created.

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Changing a Joint Operating Agreement (JOA)
Prerequisites
Menu Path

1. On the SAP Easy Access menu, choose Joint venture accounting → Master data → Joint
operating agmt → Maintenance.
2. On the Joint Operating Agreement: Initial screen, choose Change

The Joint Operating Agreement:Change screen appears.

Procedure
1. Enter the JOA code in the Joint Oper.Agr field on the Joint Operating Agreement: Change
screen.

2. Choose from the following functions:

Basic screen

Equity groups

Cost calculations

Penalty cat.rec.%

3. Enter your changes.

4. SAVE. A system message confirms that the JOA has been changed.

Delete JOA Report Modification

To delete a JOA in the use the following path in the implementation guide (IMG):

On the Display structure menu, choose Joint venture accounting → Tools → Productive start →
Delete a JOA.

The report that is generated with the JOA Delete program has been modified to show why the
JOA cannot be deleted. The ventures associated with the JOA are listed.

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For example, when the program is run in test mode, the following two items could appear on a
report:

• Venture V00001 has been assigned to WBS element 00000025

• Venture V09876 will be deleted

Displaying a Joint Operating Agreement (JOA)

Prerequisites
Menu Path

1. On the SAP Easy Access menu, choose Joint venture accounting → Master data → Joint
operating agmt → Maintenance.
2. On the Joint Operating Agreement: Initial screen, choose Display.

The Joint Operating Agreement:Display screen appears.

Procedure
1. Enter the JOA code in the Joint Oper.Agr field on the Joint Operating Agreement: Display
screen.

2. Choose from the following functions:

Basic screen

Equity groups

Cost calculations

Penalty cat.rec.%

Equity Groups
Definition
An equity group represents a specific association of partners and their working interests within a
venture. One of the partners is the operator, who manages the venture and is typically associated
with the SAP company code, while the other partners are called non-operators. The operator
collects all costs and bills the non-operators, based on their interests defined in the active equity
group. Active equity groups are associated with an equity type which gives meaning to the current
equity group. The same equity group can participate in several distinct ventures, but it can be
used only once in a venture.

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 An equity type describes the reason for a particular association of
partners. This definition may be related to time, phase or purpose, and is
linked to a specific equity group.

An Association of Partners

Use
The way you assign the ownership percentage when you set up an equity group determines the
type of ownership that the equity group represents. The particular pattern of ownership of an
equity group determines the type of joint venture to which it can be assigned. There are four
types of equity groups and four corresponding venture types. The venture type is automatically
assigned to the equity group after you specify the ownership percentages and the partner‘s
share.

Types of Equity Groups

Operated (with and without tax)

The company using SAP JVA operates this venture. To assign ownership percentages to an
Operated equity group on the Joint Operating Agreement: Equity Groups screen, you should
indicate the operating ownership of the company using SAP JVA in the OperShare field. The
NonOpShare field remains blank.

To specify the non-operating partners’ percentages of ownership, you access the Joint Operating
Agreement: Partner Shares screen and enter the percentages for each non-operating partner.

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In the case of an Operated equity group, the sum of the percentage entered in the OperShare
field on the Joint Operating Agreement: Equity Groups screen and the percentages entered for all
non-operating partners on the Joint Operating Agreement: Partner Shares screen should equal
100% ownership.

Non-Operated

In a non-operated venture, the company running SAP JVA holds a non-operated share of the
venture, and is billed by the operator for its share of venture expenses. To assign ownership
percentages to a Non-operated equity group, you should indicate the non-operating ownership of
the company using SAP JVA in the NonOpShare field on the Joint Operating Agreement: Equity
Groups screen. The OperShare field remains blank.

You do not need to access the Joint Operating Agreement: Partner Shares screen to enter
partner percentages since the company running SAP JVA is the non-operating partner in this type
of ownership arrangement.

Non-Operated On-Billing

In a non-operated on-billing venture, the company running SAP JVA sells part of its non-operated
share of the venture to third parties. The company running SAP JVA distributes portions of the
billings it receives from the venture operator to the partners in its non-operating share, in effect
acting as an operator to these third party partners.

To assign ownership percentages to a Non-operated On-billing equity group on the Joint

Operating Agreement: Equity Groups screen, you should indicate the total percentage ownership
of the properties held by the company running SAP JVA in the NonOpShare field. You should
also indicate the portion of that ownership in the properties that the company running SAP JVA
will retain in the OperShare field.

You should then indicate the portion of the non-operating ownership in the properties that the
company running SAP JVA sells off to on-billing partners on the Joint Operating Agreement:
Partner Shares screen.

In the case of a Non-operated On-billing equity group, the sum of the percentage entered in the
OperShare field on the Joint Operating Agreement: Equity Groups screen and the percentages
entered for all non-operating partners on the Joint Operating Agreement: Partner Shares screen
should equal 100% of the total non-operating ownership held in the properties by the company
running SAP JVA.

Corporate

In a corporate venture, the company running SAP JVA holds 100% interest. Only one primary
corporate venture and equity group should exist, as designated on the Company Global
Parameters screen in SAP JVA configuration. Expenses booked in the SAP JVA company
without SAP JVA information (such as venture and equity group) will be assigned to the corporate
venture and equity group. These postings are not shared by partners.

A corporate equity group can be assigned to a regular operated or non-operated venture as well
as to a corporate venture. A corporate equity group (100% operator share) can be assigned as
owner of operated ventures that are wholly owned by the company.

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This might occur when a new venture is set up before prospective partners sign the agreement.
In this case, a corporate equity group could be assigned to ownership of the venture until the
partners sign. When the partners sign the agreement, a new equity group, reflecting the new
group of owners, would be assigned to ownership of the venture.

If you are setting up equity groups in the International Region, refer to Creating
a Joint Venture, and read the International Region section for details on how
to specify the funding currency and the substitute cost center at the equity group
level.

Creating Equity Groups

Prerequisites
You must create a joint operating agreement (JOA) and joint venture accounting (JVA) partners
before you create equity groups.

See also:

Creating a Joint Operating Agreement (JOA)

Business Partners

To access the screen on which you can create equity groups for the JOA from any other JOA
screen, choose the function Equity groups. The Joint Operating Agreement: Equity Groups
screen will be displayed. On this screen, you can define either the operator share in the
OperShare field or the non-operating share in the NonOpShare field.

Menu Path

1. On the SAP Easy Access menu, choose → Master data → Joint operating agmt →
Maintenance.
2. On the Joint Operating Agreement: Initial screen, choose Change.

The Joint Operating Agreement: Change screen appears.

Procedure
1. Enter a code for the JOA in the Joint Oper.Agr field on the Joint Operating Agreement:
Change screen.
2. Enter the Company code.
3. Choose the function Equity groups to access the Change Joint Operating Agreement:
Equity Groups screen.

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 4. Enter an equity group code in the EG field.
5. Enter a percent ownership in the applicable fields (OperShare field or NonOpShare field)
or leave the field blank.

Refer to the definitions and table in the Equity Groups section for additional
information.

6. Enter a Description.
7. Choose ENTER. A venture type is assigned.
8. If the venture type assigned is non-operated, choose SAVE to complete setting up an
equity group.
9. Proceed to step eleven, if the following venture type assigned is:

operated

on-billing

10. Use the menu path Details → Partner shares to access the Change Joint Operating
Agreement: Partner Shares screen.
11. Enter a partner code in the Partner field.

If you have created an equity group by copying from another equity group, and you want
to remove the unsuspense flag from the Partner data, clear the U, Per and Year fields
associated with the unsuspense status.

Choose ENTER. Flag the S (suspense) field. Choose ENTER. You can now override or
remove the defaulted period and year in the Per and Year fields that are associated with
the suspense status.

12. Enter the percent ownership of the joint venture in the EqShare field. The sum of the
operating share added to all non-operating shares must equal 100%.

Flag the StopPay field X when revenue for a partner should not be included in the
accounts receivable netting process. To remove a partner from the StopPay status, leave
the field blank.

13. Choose ENTER.

14. Use the menu path Goto → Back to return to the Change Joint Operating Agreement:
Equity Groups screen.
15. Choose SAVE. A system message confirms that the equity group has been set up.

Changing an Equity Group

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Prerequisites
Menu Path

1. On the SAP Easy Access menu, choose → Master data → Joint operating agmt →
Maintenance.
2. On the Joint Operating Agreement: Initial screen, choose Change.

The Joint Operating Agreement: Change screen is displayed

Procedure
1. Enter the joint operating agreement (JOA) code in the Joint Oper.Agr field on the Joint
Operating Agreement: Change screen.

2. Choose the Equity groups function.

3. Enter your changes.

4. Choose SAVE. A system message confirms your changes to the JOA.

Displaying an Equity Group

Prerequisites
Menu Path

1. On the SAP Easy Access menu, choose → Master data → Joint operating agmt →
Maintenance.
2. On the Joint Operating Agreement: Initial screen, choose Display.

The Joint Operating Agreement: Display screen appears.

Procedure
1. Enter the joint operating agreement (JOA) code in the Joint Oper.Agr field on the Joint
Operating Agreement: Display screen.
2. Choose the function Equity groups.

Joint Ventures
Definition

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A joint venture is an arrangement, based on the provisions of a joint operating agreement (JOA),
in which two or more parties agree to work together for a common purpose. Joint ventures are
common when development or operational activities are capital intensive, involve high risk, and
possibly long payback periods. The joint venture allows participants to spread the risk by sharing
in operational costs. The joint venture partners share revenues in proportion to their investments.
The partners also ensure operational efficiency, by contributing their expertise.

Use
The SAP joint venture business object is used to identify the type of venture, such as corporate,
operated, or nonoperated, as well as the partners and their working interests within the JOA. An
equity group defines the joint venture partners and their interests. An equity type gives reason to
the equity group.

Structure
Most expense data for joint ventures is captured in other SAP components and processed in SAP
Joint Venture Accounting (JVA). When expenses are captured, they are assigned to a cost object
associated with a venture. SAP JVA re-assigns, these joint venture expenses to the joint venture
operating partner and the non-operating partners, according to their equity shares in the venture.

The following diagram illustrates how costs flow through SAP JVA.

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There are five types of joint ventures or Venture types. Each type is used to identify a different
form of ownership. The venture types are described in the following table:

Operated (no tax)

• Operated by the company managing SAP JVA

• Allows carried interest (CI) or net profit interest (NPI), partner, and suspense processing
• You can not add a tax to this type of venture

Operated (with tax)

• Operated by the company running SAP JVA

• Neither CI/NPI partner nor suspense processing is allowed for this type of venture
• You can assign a tax code
• Cutback calculates tax charges to venture partners, based on the tax setting for the
company in the SAP JVA configuration

Non-operated venture

• Company managing SAP JVA holds a non-operated venture share

• This is billed by the operator for its share of venture expenses

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Non-operated on-billing

• Company running SAP JVA sells part of its non-operated share of the venture to third
parties.
• Company running SAP JVA distributes portions of the billings it receives from the venture
operator to the partners in its non-operating share, in effect acting as an operator toward
these third party partners

Corporate venture

• Company running SAP JVA holds a 100% interest

• Only one default corporate venture and equity group exists in a JVA company
• Expenses booked in the SAP JVA company without SAP JVA information, such as
venture and equity group, are assigned to the corporate venture and equity group by
default
• Your system administrator sets this up in configuration

Creating a Joint Venture

Prerequisites
Before you can create a joint venture, you must set up the following prerequisites:

• Joint operating agreement (JOA)

• Joint venture number range
• Venture class
• Equity groups
• Posting method

Your system administrator sets up the joint venture number range, venture class, and posting
method during configuration.

See also:

Creating a Joint Operating Agreement (JOA)

Creating Equity Groups

Menu Path

1. On the SAP Easy Access menu, choose Joint venture accounting → Master data → Joint
venture → Maintenance.
2. On the Joint Venture Master: Initial screen, choose Create.

The Joint Venture Master Create screen appears.

Procedure

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1. Enter a code for the new venture in the Joint Venture field on the Joint Venture Master: Create
screen.

The range of possible joint venture codes has been set up in the configuration of
your system. Joint venture codes are either automatically assigned by the system
(Internal Code) or assigned by you (External Code).

2. Enter the Company code.

3. Enter a code in the Venture class field. A joint venture number range is assigned to a Venture
class. This assignment determines whether the joint venture code is generated internally or
externally.

4. Enter a code for the JOA to which the venture will be assigned in the Joint Oper. Agr field.

5. Choose the Venture type that fits the ownership of the JV you are setting up. For further
information, refer to the Venture type table in the Joint Ventures

Only if you are using another joint venture as a model, enter the reference JV code in the
Reference Joint Venture field.

6. Choose ENTER. The Create Joint Venture Master:Basic Screen is displayed.

7. Enter a brief description of the joint venture.

8. Enter a code in the Posting method field. The Posting method field determines whether the
venture will be subject to cash calls.

9. Choose SAVE now or continue to complete the optional fields that are appropriate for your
company and then save. A systems message confirms that a joint venture has been created.

Optional fields on the Create Joint Venture Master: Basic screen: vary according to the region.

All Regions

The Venture active field is set by default. If the field is set, the venture expenses are included in
cutback and billing.

International Region

In the Tax code field, you enter the code for the tax category containing the tax rate and cost
calculation rules to be applied to venture expenses.

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The Billing Format field code determines the layout of invoices and billing statements for the
venture. If you perform billing at the venture level, as determined by the company global
parameters, you must define the billing format for each venture.

In the Billfrq field, you enter the code for the frequency at which billing is executed.

In the Ck. F. Cur. field, you enter an indicator if a check is to be performed, to ensure that all
concurrently active equity groups in the venture have the same funding currency.

On the Create Joint Venture Master: Equity Group screen, you can access the following optional
fields by choosing the Fund Cur. by E. Grp. and the Sub. Cost Obj. function keys:

Funding Currency

In the Funding Currency field, you enter the code for the funding currency for each equity group.

Substitute Cost Object

In the Substitute cost object fields, RI, Cost center, Project/WBS, and Order number, you enter
the code for the cost object to which the results of venture bank account (VBA) switching will be
posted.

Parent Company Overhead (PCO)

In the Parent company overhead fields, RI, Cost center, Project/WBS, and Order number, you
enter the code of the parent company overhead for which each equity group should be booked. If
this field is blank, overheads are booked to the cost objects to which the original expenditures
were booked. This only applies to the international region.

See also:

Default Billing Currency

Changing a Joint Venture

Prerequisites
1. On the SAP Easy Access menu, choose Joint venture accounting → Master data → Joint
venture → Maintenance.
2. On the Joint Venture Master: Initial screen, choose Change.

The Joint Venture Master Change screen appears.

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Procedure
1. Enter codes in both the Joint Venture and Company code fields on the Joint Venture Master:
Change screen.

2. Choose from the following functions:

Basic screen

Equity groups

Equity Types

3. Enter your changes.

4. SAVE. A system message confirms that the joint venture has been changed.

Displaying a Joint Venture

Prerequisites
1. On the SAP Easy Access menu, choose Joint venture accounting → Master data → Joint
venture → Maintenance.
2. On the Joint Venture Master: Initial screen, choose Display.

The Joint Venture Master: Display screen appears.

Procedure
1. Enter codes in both the joint venture and Company code fields on the Joint Venture
Master: Display screen.

2. Choose from the following functions:

• Basic screen
• Equity groups
• Equity Types

Equity Group and Equity Type Assignment

Definition
The following topics describe how to assign equity groups and equity types:

• Equity Groups
• Equity Types

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 • Assigning Equity Groups to Joint Ventures

Equity Group Assignment

Use
After you set up a joint venture within a joint operating agreement (JOA), you must specify the
owners of the venture. You establish ownership by assigning an equity group within the JOA to
the venture. This allows you to apportion all expenses booked to the venture to the partners in
this equity group, based on their equity share.

Equity Type Assignment

Use
Equity types explain the reason for a particular group of partners, represented by an equity group,
within the venture during any billing period. While the joint operating agreement (JOA) defines all
possible partners and their working interests, all partners do not need to participate in all ventures
at all times. Therefore, the equity type is used to identify the active association of partners and
their interests within a venture. The reasons for this active status may result from elements of
time, phase, or purpose according to operational requirements. You define equity types initially at
the company code level and they are available for all JOAs and their ventures. Equity types adopt
a specific identity when they are associated with an equity group within a venture.

Features
Equity Type and Equity Group Relationships

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Assigning Equity Groups to Joint Ventures
Prerequisites
Certain types of equity groups correspond to specific venture types. When you access the
Change Joint Venture Master: Equity Types Assignm. screen, all the equity groups set up for the
joint operating agreement (JOA), that correspond to the venture type, are displayed.
Correspondence between equity groups and venture types depends on the entries made in the
OperShare and the NonOperShare fields. These entries are made when you set up the equity
group.

See also:

Equity Groups

Before you can assign an equity group to a joint venture, you must ensure that an equity type has
been set up.

Menu Path

1. On the SAP Easy Access menu, choose → Joint venture accounting → Master data →
Joint venture → Maintenance.

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 2. On the Joint Venture Master: Initial screen, choose Change.

The Joint Venture Master: Change screen appears.

Procedure
1. Enter the joint venture code in the Joint Venture field on the Joint Venture Master: Change
screen.

2. Enter the Company code.

3. Choose the function Equity types to access the Change Joint Venture Master:Equity Types
screen. All the equity types for the company are listed on this screen.

4. Choose Equity Type field to select the type that you want to assign to an equity group. This will
display the Change Joint Venture Master: Equity Group Assignm. screen where you can assign
an equity group to the venture.

Valid from and EGAct Fields

You can post expense entries only to ventures with active equity groups. An
indicator must appear in the EGAct field for an equity group. When you make an
equity group active, you must also indicate a date in the Valid from field. SAP
JVA posts expense entries to the venture by using the latest active equity group
based on the system date (the date when the posting was entered). If there is no
active equity group, a system error message informs you that no active equity
group exists for the venture.

You may specify a Valid from date for an equity group without making it active. If
the active equity group for the venture has a Valid from date that precedes the
Valid from date of another equity group for the venture that is inactive, the
system will post the entry to the venture, by using the active equity group. A
system message warns you that it used the latest active equity group, although
another inactive equity group for the venture with a later date exists.

5. Enter the validity date for the equity group within the venture in the Valid from and EGAct fields
to connect an equity group to an equity type in the venture.

6. Choose ENTER. An x appears by default in the EGAct field indicator box to indicate that the
equity group is active as of the date specified in the previous step.

7. Use the menu path Go → Back.

8. Choose SAVE. A system message confirms the changes to the specified joint venture.

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Joint Venture Accounting (JVA) Cost Objects
Use
You post SAP JVA expenses in SAP FI, SAP CO, SAP AM, and SAP MM. As you post these
expenses, you assign these postings to cost objects that contain links to SAP JVA.

The SAP cost objects are:

• Cost centers
• Internal orders
• Projects and work breakdown structures (WBS elements)
• Profit centers

You can assign profit centers to multiple companies that have joint venture activated.

Integration
You can link SAP JVA and the other applications by specifying SAP JVA attributes when setting
up the cost objects. These attributes include the following:

Joint Venture

A joint venture is an association of two or more parties formed to diversify risks, achieve
operational efficiencies, and share costs and revenues. Sharing is proportional according to each
party’s interest in the venture. Each cost object used to post SAP JVA expenses must be
assigned to a single joint venture.

Equity Type

An equity type describes the reason for a particular association of partners. This definition may be
related to time, phase or purpose, and is linked to a specific equity group.

Recovery Indicator

You may assign a recovery indicator (RI) to the cost object to indicate whether or not expenses
posted using the cost object are billable to SAP JVA partners. Billable expenses are assigned to
partners. Non-billable expenses are assigned to the operator. You may override this RI in the
posting itself.

Cost Object Type

SAP JVA cost object types carry the following information:

• Type of expenses to be posted to cost objects (capital, AFE, drilling, catastrophic, cost
calculation type, penalty category, field status selection)

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 • Permissibility of overriding the RI manipulation rule for projects and orders (denoted in
the MR-Override allowed field)
• Cost calculation overhead type to be applied to cost objects (percentage producing,
percentage development, CFR producing or drilling, construction, operations, and
maintenance)
• Field selection requirements (suppressed, optional, or mandatory)
• Carried interest penalty category

JIB/JIBE Class and Subclass A (optional)

Joint interest billing (JIB) codes are used to classify international region accounts and joint
interest billing exchange (JIBE) are used to classify US region accounts.

Prerequisites
Your system administrator should set up the following prerequisites in SAP FI and SAP JVA
before creating a cost center:

• Joint venture
• Equity type
• Equity group assigned to a joint venture
• Cost object types
• JVA partners

See also:

Equity Group and Equity Type Assignment

Business Partners

Cost Centers
Definition
A cost center is an organizational unit that represents a defined location of cost incurrence.

The definition can be based on:

• Functional requirements
• Allocation criteria
• Physical location
• Responsibility for costs

Creating a Cost Center

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Prerequisites
On the SAP Easy Access menu, choose Joint venture accounting → Master data → Cost center
→ Create

The Create Cost Center:Initial screen is displayed and the Set controlling area dialog box
appears.

Procedure
1. On the Create Cost Center: Initial screen, the system prompts you to enter your company’s
controlling area in the Set controlling area dialog box. Enter a code. Choose Continue.

2. Enter the Cost center. Choose ENTER.

3. Enter the cost center name in the Name field.

4. Enter the name of the responsible party in the Person responsible field.

5. Specify the codes for the Cost center category, Hierarchy area, and Business area fields, if
they are required.

6. Choose the Joint venture function. A Joint Venture screen pops up. If you receive a warning
you can override it. Choose ENTER and then select the Joint venture function key.

7. Specify the codes for the Joint venture, Recovery Indicator, Equity Type, and JV CC type (joint
venture cost center type) fields. Choose ENTER.

The Recovery Indicator field specifies the billing status. The Equity Type denotes
the validation date. The JV CC type determines the type of overhead to be
applied when you run cost calculations.

8. Choose SAVE. A system message confirms that a cost center has been created.

Changing a Cost Center

Prerequisites
On the SAP Easy Access menu, choose Joint venture accounting → Master data → Cost center
→ Change.

The Change Cost Center:Initial screen is displayed, and the Set controlling area dialog box
appears.

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Procedure
1. On the Change Cost Center:Initial screen, the system prompts you to enter your
company’s controlling area in the Set controlling area dialog box. Enter a code. Choose
Continue.
2. Enter a cost center code. Choose ENTER.
3. Choose from the following tabstrips:

Basic data

Control

Templates

Address

Communication

History

4. Enter your changes

5. SAVE. A system message confirms the changes to the cost center.

Displaying a Cost Center

Prerequisites
On the SAP Easy Access menu, choose Joint venture accounting → Master data → Cost center
→ Display.

The Display Cost Center:Initial screen is displayed, and the Set controlling area dialog box
appears.

Procedure
1. On the Display Cost Center Initial screen, the system prompts you to enter your
company’s controlling area in the Set controlling area dialog box. Enter a code. Choose
Continue.
2. Enter a code in the cost center field. Choose ENTER.
3. Choose from the following tabstrips:

Basic data

Control

Templates

Address

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 Communication

History

Internal Orders
Definition
As expenses are generated in standard SAP components, cost objects pass these expenses to
SAP Joint Venture Accounting (JVA). An internal order is one type of cost object.

Use
Like all cost objects, an internal order provides the JVA information required to associate the
posting with a joint venture or equity group combination. Cost objects also provide billing rules
through recovery indicator information and overhead rules through the cost object type.

Creating an Internal Order

Prerequisites
You should set up the following prerequisites in SAP FI and SAP Joint Venture Accounting (JVA)
before creating an internal order:

• Joint venture
• Equity type
• Equity group assigned to a joint venture
• Cost object types
• Recovery indicator

In addition, the status for internal orders must be released. To determine whether
or not an order has been released, check the status by using the Goto → Status
menu path. To release the order, use the menu path Edit → Release

See also:

Creating a Joint Venture

Equity Group and Equity Type Assignment

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data → Internal
order → Create.

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The Create Internal Order: Initial screen appears.

Procedure
1. Enter the Order type on the Create Internal Order: Initial screen.
2. Choose ENTER. The Create Internal Order: Master data screen appears.
3. Enter a description of the order in the Short text field.
4. Enter the Company code. You can enter only company codes that are set up under the
specified controlling area at configuration.
5. Enter the Business area. You can enter only business areas that are set up under the
specified controlling area and company code at configuration.

A settlement can contain a final allocation of costs from orders or work

breakdown structure (WBS) elements to the following:

o Cost centers
o Projects
o Fixed assets
o General ledger accounts
o Networks
o Materials sales orders
o Cost objects defined in the settlement rule for the sender.

6. Choose the function Settlement rule only if you want to specify the settlement rule. The
Maintain Settlement Rule: Overview screen appears. This step is optional. Find the
Settlement receiver section of the screen. Enter the receiver’s Cost center.
7. SAVE your data. A system message confirms that your order was created and an order
number is generated.

Settlement Rules

Settlement rules and the objects assigned to them govern settlements of expenses from WBS
elements (or orders) to their receivers. Settlement rules are assigned to both WBS elements and
orders, and list the settlement objects (chiefly the settlement profile that governs the execution of
settlement).

There are three types of objects assigned to settlement rules

• Origin structure groups sending cost elements together in order to settle them to
dedicated receivers.
• Settlement structure defines the secondary cost elements used to post the results of
the settlement to the receiving objects.
• Settlement profile is composed of the origin structure, settlement structure, and further
settlement steering information.

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When the origin structure, settlement structure, and settlement profile are defined, you can assign
the settlement profile to the WBS element or order.

Changing an Internal Order

Prerequisites
On the SAP Easy Access menu, choose Joint venture accounting → Master data → Internal
order → Change.

The Change Internal Order: Initial screen appears.

Procedure
1. Enter the order number in the Order field on the Change Internal Order: Initial screen.
2. Choose ENTER. The Change Internal Order: Master Data screen appears.
3. Change or enter additional data on this screen.
4. Choose SAVE. A system message confirms the changes to the order.

Displaying an Internal Order

Prerequisites
Menu Path

On the Sap Easy Access menu, choose Joint venture accounting → Master data → Internal
Order → Display.

The Display Internal Order: Initial screen appears.

Procedure
1. Enter the order number in the Order field on the Display Internal Order: Initial screen.
2. Choose ENTER. The Display Internal Order: Master Data screen appears.
3. Choose the following tabstrips to access additional information:

Assignments

Control data

Prd-end closing

General data

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 Investments

Projects and Work Breakdown Structure (WBS)

Elements
Definition
A WBS is a hierarchical project model representing the actions and activities to be carried out in
the project.

Use
The WBS gives you an overview of the project. It contains the work, time and costs involved.
WBS elements are the individual structure elements in the WBS. The term describes a concrete
task or a partial task which can be further subdivided.

Structure
The following is a list of WBS properties:

• Planning (to plan actual costs)

• Account assignment (to post costs)
• Billing (to post revenues)

The SAP Joint Venture Accounting (JVA) information you specify at the project level is applied to
all WBS elements within the project, as you set them up. You must assign all WBS elements to a
project. Therefore, you must set up the project before attempting to set up a WBS element. In
order to set up a project, you must assign it to a project profile. The profile should be set up as a
part of SAP CO configuration.

Creating a Project
Prerequisites
You need to set up the following prerequisites in SAP FI and SAP Joint Venture Accounting (JVA)
before you create a project or work breakdown structure (WBS):

• Joint venture
• Equity type
• Equity group assigned to a joint venture
• Cost object types

For additional information regarding the prerequisites, refer to the following topics:

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Creating a Joint Venture

Equity Group and Equity Type Assignment

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Projects/AFEs → Project builder.

The Project Builder screen appears.

Procedure
1. In the Project Builder screen, choose Project → New → Project.
2. Under Identification and view selection, enter a brief description of the project in the
Project def. field.
3. Specify the Project Profile code.
4. Choose the Detail function. The data in the Controlling area, Company code, Business
area and Proj.currency fields appears automatically.
5. To specify JVA information for the project, choose the WBS Element Overview function.
6. The JVA information you specify at the project level applies to all WBS elements within
the project, as you set them up.
7. Continue directly to setting up your WBS elements or SAVE your data now.

A system message confirms that the project has been created.

Changing a Project
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Projects/AFEs → Project builder.

Procedure
To change a project, proceed as follows:

1. In the Project Builder screen, choose Project → Open.

The Open project dialog box appears.

2. Enter the description of the project in the Project definition field on the Open project
dialog box.

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 3. Choose from the following function keys to access the change screens:

Function Screen Name

Structure Change Project: WBS Elements - Descriptions

Person respons Change Project: WBS Elements - People Responsible

User status Change Project: WBS Elements - User Status

System status Change Project: WBS Elements - System Status

Proj.definition Change Project: Project definition Basic Data

4.
5. SAVE. A system message confirms that your project has changed.

From each of the Change Project screens, you can choose the following function keys for
additional detail:

• Proj.definition
• WBS elem.
• Settlement rule
• Summarization

Displaying a Project
Prerequisites
On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Projects/AFEs → Project builder.

Procedure
1. In the Project Builder screen, choose Project → Open.

The Open project dialog box appears.

2. Enter the description of the project in the Project definition field on the Open project
dialog box.
3. Choose ENTER.

Creating a Work Breakdown Structure (WBS)

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Prerequisites
You need to set up the following prerequisites in SAP FI and SAP Joint Venture Accounting (JVA)
before you create a project or WBS:

• Joint venture
• Equity type
• Equity group assigned to a joint venture
• Cost object types

For additional information regarding the prerequisites, refer to the following topics:

Creating a Joint Venture

Equity Group and Equity Type Assignment

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Projects/AFEs → Project builder.

You can create a WBS from the WBS screens or from the project set-up screens.

Procedure 1: Creating a WBS from WBS Screens

1. Enter data in the Project def. and WBS element fields on the Create WBS element: Initial
Screen.

2. Choose the WBS elem. function (or Enter). The Create WBS element: Basic Data screen
appears.

3. Enter a brief description of the WBS element in the field provided.

4. Examine the basic data. Changing the basic data appearing on this screen is optional.

5. To change the JVA information provided by the project, choose the tabstrip Joint venture and
complete the appropriate fields.

A settlement can contain a final allocation of costs from orders or WBS elements
to the following:

o Cost centers
o Projects

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 o Fixed assets
o General ledger accounts
o Networks
o Materials sales orders
o Cost objects defined in the settlement rule for the sender

6. Choose the function Settlement rule only if you want to specify the settlement rule. The.
Maintain Settlement Rule: Receiver Selection screen is displayed.
7. Choose the appropriate Receiver. Choose Enter.
8. Complete the appropriate fields in the Settlement receiver section of the screen. Choose
Enter.
9. Choose SAVE. The system returns to the initial screen. A system message confirms that
a WBS element was created.

Settlement Rules

Settlement rules and the objects assigned to them govern settlements of expenses from WBS
elements (or orders) to their receivers. Settlement rules are assigned to both WBS elements and
orders, and list the settlement objects (chiefly the settlement profile that governs the execution of
settlement).

There are three types of objects assigned to settlement rules

• Origin structure groups sending cost elements together in order to settle them to
dedicated receivers.
• Settlement structure defines the secondary cost elements used to post the results of
the settlement to the receiving objects.
• Settlement profile is composed of the origin structure, settlement structure, and further
settlement steering information.

When the origin structure, settlement structure, and settlement profile are defined, you can assign
the settlement profile to the WBS element or order.

Procedure 2: Creating a WBS from Project Set-Up Screens

1. Choose Structure.

2. Enter the name of the WBS in the WBS element field.

3. Complete the Description field.

4. If you want to change the JVA information provided by the project, choose the tabstrip Joint
venture and complete the appropriate fields.

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 A settlement can contain a final allocation of costs from orders or WBS elements
to the following:

o Cost centers
o Projects
o Fixed assets
o General ledger accounts
o Networks
o Materials sales orders
o Cost objects defined in the settlement rule for the sender

5. Choose the function Settlement rule only if you want to specify the settlement rule. The
Maintain Settlement Rule: Receiver Selection screen is displayed.
6. Choose the appropriate Receiver. Choose ENTER.
7. Complete the appropriate fields in the Settlement receiver section of the screen. Choose
ENTER.
8. Choose SAVE.

Changing a Work Breakdown Structure (WBS)

Prerequisites
On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Projects/AFEs → Project builder.

Procedure
1. Enter the WBS element on the Change Project: Initial Screen.

2. Choose from the following function keys to access the several change screens:

Function Screen Name

Structure Change Project: WBS Elements - Descriptions

Person respons Change Project: WBS Elements - People Responsible

User status Change Project: WBS Elements - User Status

System status Change Project: WBS Elements - System Status

Proj.definition Change Project: Project definition Basic Data

3. SAVE. A system message confirms the changes to your WBS element.

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Displaying a Work Breakdown Structure (WBS)
Prerequisites
On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Projects/AFEs → Project builder.

Procedure
1. Enter the WBS element on the Display Project: Initial Screen.

2. Choose from the following function keys to access the several display screens:

Function Screen Name

Structure Display Project: WBS Elements - Descriptions

Person respons Display Project: WBS Elements - People Responsible

User status Display Project: WBS Elements - User Status

System status Display Project: WBS Elements - System Status

Proj.definition Display Project: Project definition Basic Data

Joint Venture Information and Profit Centers

Use
SAP Joint Venture Accounting (JVA) allows you to assign joint venture information to profit
centers. You can assign a single profit center to multiple SAP FI companies and to multiple joint
ventures, when the number of joint ventures equals the number of SAP FI companies.

Assigning Joint Venture Information to a Profit

Center
Use
You can assign the following joint venture information to a profit center:

• Joint venture
• Recovery indicator
• Joint venture object type
• Joint information billing (JIB) or joint information billing extended (JIBE) class and
subclass

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Prerequisites
Menu Path

1. On the SAP Easy Access menu, choose Accounting → Controlling → Profit Center
Accounting → Master data → Profit Center → Individual Processing → Change.

The Change Profit Center screen appears.

2. Enter the code for the profit center to which you wish to assign joint venture information
and press ENTER

Procedure
1. Choose the Joint venture tabstrip on the Change Profit Center screen.
2. A list appears, displaying the companies to which the profit center was assigned. Select
the appropriate SAP FI company.
3. The Joint venture data dialog box appears.
4. Enter the required joint venture information.

When you exit the Joint venture data dialog box, you return to the list of assigned companies.
You can choose another company for the profit center and assign joint venture information for the
SAP FI company.

Displaying Joint Venture Information Assigned to

a Profit Center
Use
The following joint venture information can be assigned to a profit center:

• Joint venture
• Recovery indicator
• Joint venture object type
• JIB or JIBE class and subclass

Prerequisites
Menu Path

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 1. On the SAP Easy Access menu, choose Accounting → Controlling → Profit Center
Accounting → Profit Center → Master data → Profit Center → Individual Processing →
Display.
2. Enter the code for the controlling area in the Controlling area dialog box and press
ENTER.

The Change Profit Center:Request screen appears.

3. Enter the code for the profit center to which you wish to assign joint venture information
and press ENTER.

Procedure
1. Choose the Joint venture tabstrip on the Change Profit Center screen.
2. A list appears, displaying the companies to which the profit center was assigned. Select
the appropriate SAP FI company.
3. The Joint venture data dialog box appears.

When you exit the Joint venture data dialog box, you return to the list of assigned
companies. You can choose another company for the profit center and display the joint
venture information assigned for the SAP FI company.

Logistical Orders
Use
You can assign joint venture information directly to a logistical order. If no joint venture
information is available on the order, it can be derived from the joint venture information assigned
to other cost objects specified on the logistical order.

You can assign joint venture information by using the following types of logistical orders:

• Production orders
• Plant maintenance orders
• Network orders

Assigning Joint Venture Information to

Production Orders
Prerequisites
Menu Path

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On the SAP Easy Access menu, choose Logistics → Production → Production control → Order
→ Change.

The Production Order Change: Initial screen appears.

You can assign joint venture information to production orders in two

ways:

o Through the cost objects that are assigned to the plant

o Through the joint venture information assigned directly to the plant
maintenance order

Procedure

Cost objects for production orders

You can only assign work breakdown structure (WBS) elements to

production orders.

Derivation of joint venture information

By default, the joint venture information for a production order is derived

from the WBS element assigned to the order.

1. To assign a WBS element to a production order, choose the tabstrip Assignment on the
Production Order Change screen.
2. To assign joint venture information directly to a production order or to display the joint
venture information derived from the WBS element assigned to the order, choose the
tabstrip Assignment and choose the Joint venture button.

Assigning Joint Venture Information to Network

Orders
Prerequisites
On the SAP Easy Access menu, choose → Logistics → Project System → Project → Project
Builder.

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The Project Builder screen appears.

Choose a network.

You can assign a WBS element to a network order on a header level or an activity level.

You can assign a WBS element to a network order on a header level or an activity level.

Procedure

Cost Objects for Network Orders You can only assign WBS elements to network
orders.

Derivation of JV Information By default, the joint venture information for a

network order is derived from the WBS element
assigned to the order.

On the Network header or Network activity, choose the Assignments tab and then select the Joint
venture button.

Assigning Joint Venture Information to Plant

Maintenance Orders
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Logistics → Plant Maintenance → Maintenance
processing → Order → Change.

The Change Order: Initial screen appears.

You can assign joint venture information to plant maintenance orders in

two ways:

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 o Through the cost objects that are themselves assigned to the plant
o Through the joint venture information assigned directly to the plant
maintenance order

To assign the following cost objects to plant maintenance orders, choose the
tabstrip Frame and enter the appropriate information in the relevant fields under
the heading Account assignment:

1. Cost center
2. WBS element
3. Settlement order

If you assign a cost center and a WBS element to an order, the joint
venture information on the cost center takes precedence over that on the
WBS element. Also, the joint venture information on the WBS element
takes precedence over that on an internal order.

Procedure 1
To assign joint venture information to a plant maintenance order through a cost center, an internal
order or a WBS element, proceed as follows:

1. Choose the tabstrip Location.

2. In the appropriate field under the heading Account assignment, enter a cost center, a
WBS element, or a settlement order.

Procedure 2
To assign joint venture information directly to a plant maintenance order or to display the joint
venture information derived from one of the cost objects assigned to the order, proceed as
follows:

1. On the Maintenance Order Request screen, choose the pulldown menu Goto →
Assignments → Joint venture.
2. Enter the following joint venture information:

• Joint venture
• Recovery indicator
• Equity type
• Joint venture object type
• Joint interest billing (JIB) or joint interest billing extended (JIBE) class and subclass A

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Business Partners
Purpose
Joint ventures are owned by business partners organized into groups called equity groups.
Before you can set up the equity groups for the joint ventures, you must first set up the business
partners in SAP Joint Venture Accounting (JVA).

Process Flow
When you set up the business partners, you should set up a customer and a vendor account in
SAP FI for all SAP JVA partners. You set up joint venture partners, by using the following steps:

1. You create customer accounts for SAP JVA partners.

2. You create vendor accounts for SAP JVA partners.
3. You maintain SAP JVA partners.

Creating Customer Accounts (Accounts

Receivable)
Procedure
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data → Business
partners → Customers → Create.

The Create Customer: Initial Screen appears.

Creating Vendor Accounts (Accounts Payable)

Prerequisites
You must create a vendor account for the partner in SAP FI accounts payable if:

• You plan to use SAP JVA processes that generate accounts payable for partners (such
as convenience netting and carried interest or net profit interest processing)

• The partner is an operator of a venture in which the company, for which SAP JVA is
being configured, has a non-operating interest

Procedure

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Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data → Business
partners → Vendors → Create.

The Create Vendor: Initial Screen appears.

Maintaining a Joint Venture Accounting (JVA)

Business Partner
Prerequisites
You must assign a new customer account to a company in SAP FI accounts receivable before
you maintain an SAP JVA business partner for the customer.

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data → Business
partners → JV partners → Maintain.

The Enter company code dialog box appears.

Procedure
1. Enter the company code in the dialog box. Choose ENTER. The Change View "Partner":
Overview screen appears.
2. Choose New entries to define a new business partner group for your company. The New
Entries: Details of Added Entries screen appears.
3. Enter the code for the new partner in the Partner field.
4. Complete the optional fields on the screen.

Some of the important fields include:

Cash call

o Cash Call Threshold

The Cash Call Threshold is the minimum amount for which you can issue
a cash call to a partner. Any cash calls below this amount are not posted.

o Partn/VE CC Threshold

Partn/PJ CCThreshold is the minimum amount for which you can issue a
cash call to a partner for a Partner/Project/Operations Month
combination. Any cash calls below this amount will not be posted.

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 o Partn/PJ CCThreshold

Partn/PJ CCThreshold is the minimum amount for which you can issue a
cash call to a partner for a Partner/Project/Operations Month
combination. Any cash calls below this amount will not be posted.

Billing

o Paper to Owner

The Paper to Owner indicator determines whether or not a partner will

receive hard copy billing.

o EDI to Owner

The EDI to Owner indicator determines whether or not a partner will

receive electronic data interchange (EDI) billings.

Hardcopy Billing

o Billing Format

The Billing Format field code determines the layout of invoices and billing
statements for the venture. If you perform billing at the venture level, as
determined by the company global parameters, you must define the
billing format for each venture.

EDI

o EDI Partner Code

EDI Partner code is a code assigned externally by the EDI governing

authority with jurisdiction over EDI in that area and sector. For example,
COPAS assigns these partner codes to oil companies in the United
States. PASC is responsible for EDI partner codes for oil companies in
Canada.

Other

o Convenience Netting

Generally, only US and Canadian region companies use convenience

netting. There are three steps in the convenience netting process:

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 I. All open expense items for a partner for a specified period are
summarized
II. All open revenue entries for the partner for the period are summarized
III. If the summarized revenues exceed the expenses, a single credit entry is
posted to the partner’s vendor account in FI Accounts Payable

Convenience netting posts this credit entry to the partner’s account only
if there is a credit balance. If there is no credit balance for the partner,
the netting program does not post.

o Tax code

In the Tax code field, you enter the code for the tax category containing
the tax rate and cost calculation rules, to be applied to venture expenses.

o Partner Proc. Group

Processing groups (Partner Proc. Group) are set up at configuration.

During the reclassification process you can specify a group. Cash call
payments for all members of the group are processed in the same way.

5. Choose SAVE.

Changing Joint Venture Partner Data

Prerequisites
Menu Path

On the Sap Easy Access menu, choose Joint venture accounting → Master data → Business
partners → JV partners → Change.

The Enter company code dialog box appears.

Procedure
1. Enter the company code in the dialog box. Choose ENTER. The Change View "Partner":
Overview screen appears.

2. Mark the appropriate Partner by clicking on the far left column. An arrow points to the selected
Partner.

3. From the menu, choose: Goto → Details.

The Change View "Partner": Details screen is displayed.

4. Change or enter additional data on this screen.

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5. Choose SAVE. A system message confirms that the data is saved.

Displaying Joint Venture Partner Data

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data → Business
partners → JV partners → Display.

The Enter company code dialog box appears.

Procedure
1. Enter the company code in the dialog box. Choose ENTER. The Display View "Partner":
Overview screen appears.
2. Select the appropriate Partner by clicking on the far-left column. An arrow points to the
selected Partner.
3. From the menu, choose: Goto → Details
The Display View "Partner": Details screen appears.

Creating an Additional Address

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data → Business
partners → JV partners → Additional addresses.

The Enter company code dialog box appears.

Procedure
1. Enter the company code in the dialog box. Choose ENTER. The Change View "Partner
addresses": Overview screen appears.

2. Select the appropriate Partner by clicking on the far-left column. An arrow points to the
selected Partner.

3. From the menu, choose Edit → Address.

The Edit Address screen appears.

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4 Enter the address data.

5. Choose SAVE.

Suspension of JVA Projects, Partners, and Equity

Groups
Purpose
If a project, partner, or equity group is suspended, cutback postings are not executed. When you
remove the project, partner, or equity group from suspense, cutback processes all expenses
incurred during suspense. Suspended partners do not receive an invoice. When partners are
removed from suspense, they receive an invoice that includes expenses for the complete period
of suspense.

o You cannot place equity groups in suspense if there are any outstanding current
or future postings to the equity group.
o You can place work breakdown structure (WBS) elements in suspense if there
are outstanding current or future postings other than cash calls.
o You cannot place WBS elements in suspense if current or future cash calls have
been posted for the WBS element.
o You cannot place the WBS element in suspense if any SAP Joint Venture
Accounting (JVA) month end processes have been run.

Suspending a Joint Venture Accounting (JVA)

Project
Prerequisites
You must set up the following prerequisites before you can suspend the project:

• Partners
• Equity groups in the joint operating agreement (JOA)
• Projects and work breakdown structures (WBSs) in SAP CO

The projects and WBSs must be released. To determine whether an order has been released,
you check the status by using the Goto → Status menu path. To release a project and WBS, you
use the menu path Edit → Release.

See also:

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Business Partners

Equity Group and Equity Type Assignment

Projects and Work Breakdown Structure (WBS) Elements

Menu Path

On the SAP Easy Access screen, choose Joint venture accounting → Master data →
Projects/AFEs → Maintain JV project suspense.

The Enter company code dialog box appears.

Procedure
1. Enter the company code in the Enter company code dialog box. The Change View
"Project in Suspense": Overview screen appears.
2. Choose the New entries function key. The New Entries: Overview of Created Entries
screen appears.
3. Enter data into the JV Project field.
4. To suspend the project:

• Choose the S indicator. An x in this field indicates that all records on the joint venture
ledger booked to this project will be placed in suspense and will not be cutback until the
project has been removed from suspense.
• Enter a period in the Susp.Peri. field to specify the project suspense beginning period.
• Enter a year in the SuPeYear field to specify the project suspense year.

5. To remove the project from suspense

• Choose the U indicator. An x in this field indicates that all records on the joint venture
ledger booked to this project will be removed from suspense and will be cutback.
• Enter a period into the Unsusp.Per field to specify the period in which a project is
removed from suspense.
• Enter a year into the UnSuPeYear field to specify the year in which the project is
removed from suspense.

Either the S field (suspense) or the U field (unsuspense) will be activated. Both
indicators can not be activated at the same time.

6. Choose ENTER.
7. Choose SAVE. A system message confirms that your data has been saved.

Suspending a Joint Venture Accounting (JVA)

Partner

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Prerequisites
Menu Path

1. On the SAP Easy Access screen, choose Joint venture accounting → Master data →
Joint operating agmt → Maintenance.

The Joint Operating Agreement: Initial screen appears.

2. On the Joint Operating Agreement: Initial screen, choose the Change button.

Procedure
1. Enter the code for the Joint Venture on the Joint Operating Agreement: Initial screen.
2. Enter the Company code.
3. Use the path Go To → Equity groups. The Change Joint Operating Agreement: Equity
Group screen is then displayed.
4. Choose the EG field to choose the JVA partner’s equity group. The Change Joint
Operating Agreement: Partner Shares screen is then displayed.

5. To suspend a partner:

• Choose the S indicator. An x will appear in the box.

• Enter a period code in the Per field.
• Enter a year in the Year field.

6. To remove a partner from suspense:

• Choose the U indicator. An x will appear in the box.

• Enter a period code in the Per field
• Enter a year in the Year field
• Use menu path Goto → Back.

7. Choose SAVE. A system message confirms changes to the JOA.

Intercompany Mapping Functions

Use
The intercompany functions of SAP Joint Venture Accounting (JVA) enable you to map
transactions between two companies that are running SAP JVA and share property ownership. In
an intercompany venture, between companies running SAP JVA, there is a relationship between
the company that operates the intercompany property and the company that holds a non-
operating interest in the intercompany property.

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Prerequisites
You must create ventures, equity groups, and cost objects for the operator non-operating partner.

Activities
The intercompany functions work by mapping the following objects in the operated venture:

• Joint venture
• Equity group
• Cost center
• Internal orders
• Work breakdown structure (WBS) elements
• Networks
• Assets
• Accounts receivable and accounts payable (optional)

o During normal processing, expenses are booked to the cost objects connected to
the operated joint venture for the intercompany venture.
o Cutback is executed at the end of the accounting period.
o The company that operates the intercompany property posts the appropriate
portion of expenses to the cost object, which is connected to the non-operated
joint venture and equity group in the non-operating partner company.

Mapping Prerequisites
Definition
You must configure the operator and non-operating partner in standard SAP components and in
SAP Joint venture Accounting (JVA). In your company’s system, you must set up a customer
account (in accounts receivable) and a vendor account (in accounts payable) for the appropriate
partner company. When you have set up the customer and vendor accounts for the partner
company, you set this company up as a JVA partner.

Use

This procedure is the same as setting up a typical JVA partner, except that you also enter the
SAP company code for the appropriate partner company in the ICoC field on the JVA Partner
screen.

To do this, go to the Master Data → Business partners menu path on the SAP JVA main menu.

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See also:

Business Partners

You must set up an operated equity group for the operator. The non-operating partner holds a
non-operating interest in this equity group.

You assign this equity group to ownership of a joint venture with one of the following venture
types:

a. 1 – Operated venture (no tax)

b. 4 – Operated venture (with tax)

You also create appropriate cost objects with JVA information for this venture.

You must set up a non-operating equity group for the non-operating company.

You assign this equity group to ownership of a joint venture with one of the following venture
types:

a. 2 – Non-operated venture
b. 3 – Non-operated venture for on-billing

As you set up this non-operated joint venture, you must enter the operator‘s customer account
code on the JV basic screen. You must also create appropriate cost objects (with SAP JVA
information assigned) for this venture.

Operated-Intercompany Venture

Ventures operated by your company, in which a related company holds a non-operating share,
are called operated intercompany ventures. To set up an intercompany venture that your
company operates, follow this procedure:

At the JOA level, set up an operating equity group:

Enter your company’s operated percentage of ownership in the OperShare field on the Joint
Operating Agreement: Equity Groups screen ( Master data → Joint operating agmt → Change →
Equity groups).

Enter the related company’s non-operating share of ownership in the Partner and EqShare fields
of the Joint Operating Agreement: Partner Shares screen ( Details → Partner shares).

Set up the joint venture with a venture type of operated for the intercompany venture (Master data
→ Joint venture → Created).

Identify the non-operated venture (INTCOV field) and equity group (ICE field) in the related
company that corresponds to this operated venture in your company on the Joint Venture Master:
Intercompany Data screen ( Goto → Intercompany venture).

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Assign the equity group for the intercompany operated venture to ownership of this joint venture
via the appropriate equity type.

Non-Operated Intercompany Venture

Non-operated intercompany ventures are ventures operated by a related company in which your
company holds a non-operating share. To set up your company as a non-operated intercompany
venture follow this procedure:

1. At the JOA level, set up an non-operating equity group:

Enter your company’s non-operated percentage of ownership in the NonOperShare field

on the Joint Operating Agreement: Equity Groups screen (Master data → Joint operating
agmt → Change → Equity groups).

2. Set up the joint venture with a venture type of non-operated for the intercompany venture
(Master data → Joint venture → Created):
3. Identify the related company that operates the intercompany venture by entering its
customer account code in the Operator field on the Joint Venture Master: Basic screen.
You can also enter the following additional data for the operator: Tax code, Terms of
payment, and Tax jurisdiction code.
4. Assign the equity group for the intercompany non-operated venture to ownership of this
joint venture, by using the appropriate equity type.

The operating company will book expenses to an operated venture that corresponds to this non-
operating venture in your company. Your company will be identified as a non-operating partner in
that venture. Your company’s portion of the expenses booked to that operated venture in the
related company will be forwarded to your company.

Reconciliation of Intercompany Mapping for Cutback

Use
During the process of intercompany cost object cutback mapping, cost objects related to ventures
and equity groups in a company code (sender) are mapped to a cost object related to venture
and equity group in an intercompany code (receiver). Each intercompany mapping transaction
(GJ26, GJ28, GJ30, GJ3D GJ32, and GJ3B) contains an appropriate menu option (for account,
cost center, project, network, internal order, and asset, respectively) For all those options, you
can enter a sender company code and a sending cost object range, together with a receiving
company code and a receiving cost object. Within joint venture master data, table T8JI stores the
company code, venture, and equity group information of the operator and the appropriate
partners.
SAP Joint Venture Accounting (JVA) contains a reconciliation check, to ensure consistent and
accurate intercompany cost object cutback mapping.
Menu Path
On the SAP Easy Access menu, choose Accounting → Joint Venture Accounting → Master data
→ Intercompany mapping → Reconcile intercompany mapping for cutback.

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Features

The reconciliation check automatically verifies the accuracy of the intercompany cutback
mapping, eliminating the risk of failed intercompany cutback postings. The reconciliation
check is designed to do the following:
1. • Read all cost objects in the from range and determine the venture and equity type
information of all cost objects
2. • Read the venture and equity type information of the receiving cost object
3. • Find the ventures and equity groups in T8JI and check the correct relation of
ventures and equity groups on the company and intercompany side
4. • Send an error message if there is no corresponding entry in T8JI, or if there is an
entry in T8JI for an equity group other than the active equity group

Mapping Accounts
Prerequisites

Mapping Prerequisites

Menu Path

On the SAP Easy Access menu, choose → Joint venture accounting → Master data →
Intercompany mapping → Accounts.

The Enter company code dialog box appears.

Procedure

1. Enter the Company code on the Enter company code dialog box. Choose ENTER. The
Change View "Cutback rules/accounts": Overview screen appears.
2. Choose the New entries function. The New Entries: Overview of Created Entries screen
appears.
3. Enter the Company Code for the related company that holds a non-operating interest in
the intercompany venture in the ICoC field.
4. Enter the account code (or the first in a range) of the operating company in the Accnt
From field.
5. Enter the account code (or the last in a range) of the operating company in the Account
to field (optional if you only specify one account).
6. Enter the account code, for non-operating partner, in the Accnt cut field. This account in
the non-operating company receives the expenses posted by cutback in the operator.
7. Choose SAVE.

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Mapping Cost Centers
Prerequisites

Mapping Prerequisites

Menu Path

On the SAP Easy Access menu choose Joint venture accounting → Master data → Intercompany
mapping → Cost centers

The Enter company code dialog box appears.

Procedure
To map cost centers, proceed as follows:

1. Enter the Company code in the Enter company code dialog box. Choose ENTER. The
Change View "Cutback rules/cost centers": Overview screen appears.
2. Choose the New entries function. The New Entries: Overview of Created Entries screen
appears.
3. Enter the Company Code for non-operating company in the intercompany venture in the
ICoC field.
4. Enter the cost center code (or the first in a range) for the operator in the CCntr From field.
5. Enter the cost center code (or the last in a range) for the operator in the CCntr To field
(optional if you only specify one cost center).
6. Enter the cost center code of the non-operating company in the CCntr Cut field. This cost
center in the non-operating company receives the expenses posted by Cutback in the
operator.
7. Choose SAVE.

Mapping Projects / Work Breakdown Structure

(WBS) Elements
Prerequisites

Mapping Prerequisites

Menu Path

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On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Intercompany mapping → Projects/WBS elemnts.

The Enter company code dialog box appears.

Procedure

1. Enter the company code in the Enter company code dialog box. Choose ENTER. The
Change View "JV Project Intercompany Cutback Rule": Overview screen appears.
2. Choose the New entries function The New Entries: Overview of Created Entries screen
appears.
3. Enter the Company Code for the non-operating company in the ICoC field.
4. Enter the project code (or the first in a range) for the operator in the Project From field.
5. Enter the project code (or the last in a range) for the operator in the Project to field. This
is optional if you specify only one project or WBS element.
6. Enter the project code for the non-operating company in the Cutback project field. This
project in the non-operating company receives the expenses posted by Cutback in the
operator.
7. Choose SAVE.

Mapping Networks
Prerequisites

Mapping Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Intercompany mapping → Networks.

The Enter company code dialog box appears.

Procedure

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 1. Enter the company code in the Enter company code dialog box. Choose ENTER. The
Change View "Cutback: Intercompany network mapping": Overview screen appears.
2. Choose the New entries function. The New Entries: Overview of Created Entries screen
appears.
3. Enter the Company Code for the non-operating company in the ICoC field.
4. Enter the network code (or the first in a range) for the operator in the Network from field.
5. Enter the operation code for the operator in the Op. from field.
6. Enter the network code (or the last in a range) of the operator in the Network to field. This
is optional if you specify only one network.
7. Enter the operation code (or the last in a range) of the operator in the Op. to field. This is
optional if you specify only one operation.
8. Enter the network code of the non-operating company in the Cutback project field. This
network in the non-operating company receives the expenses posted by Cutback in the
operator.
9. Choose SAVE.

Mapping Internal Orders

Prerequisites

Mapping Prerequisites

Menu Path

On the SAP Easy Access men, choose Joint venture accounting → Master data → Intercompany
mapping → Internal orders.

The Enter company code dialog box appears.

Procedure

1. Enter the company code in the Enter company code dialog box. Choose ENTER. The
Change View "Cutback rules/orders": Overview screen appears.
2. Choose the New entries function. The New Entries:Overview of Created Entries screen
appears.
3. Enter the Company Code for the non-operating company in the ICoC field.
4. Enter the order code (or the first in a range) for the operator in the Order From field.
5. Enter the order code (or the last in a range) for the operator in the Order to field. This is
optional if you specify only one internal order.
6. Enter the order code of the non-operating company in the Cutb Order field. This order in
the non-operating company receives the expenses posted by Cutback in the operator.
7. Choose SAVE.

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Mapping Assets
Prerequisites

Mapping Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Intercompany mapping → Assets.

The Enter company code dialog box appears.

Procedure

1. Enter the company code in the Enter company code dialog box. Choose ENTER. The
Change View "Asset intercompany cutback rule": Overview screen is displayed.
2. Choose the New entries function. The New Entries: Overview of Created Entries screen
is displayed.
3. Enter the Company Code for the non-operating company in the ICoC field.
4. Enter the main asset code for the operator in the Asset field.
5. Enter the sub-number asset code for the operator in the SNo. field.
6. Enter the main asset code for the operator in the Asset field. This is optional if you only
specify only one asset.
7. Enter the sub-number asset code for the operating company in the SNo. field.
8. Enter the asset code for the non-operating company in the Asset field. This asset in the
non-operating company receives the expenses posted by Cutback in the operator.
9. Enter the sub-number asset code for the non-operating company in the SNo. field.
10. Choose SAVE.

Prepaid Inventory Materials

Use
All materials for all SAP Joint Venture Accounting (JVA) active companies are listed on the Pre-
paid Inventory maintenance:Overview screen. On this screen, you can designate selected
materials as consisting of prepaid inventory, by making an entry in the PPInv indicator field.

Prerequisites
To maintain or display inventory materials, follow this menu path:

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On the SAP Easy Access menu, choose → Joint venture accounting → Master data → Prepaid
inventory → Maintain or Display.

If you choose Maintain, the Change View Pre-Paid Inventory maintenance": Overview screen
appears.

If you choose Display, the Display View Pre-Paid Inventory maintenance": Overview screen
appears.

Features
The following fields are displayed on the Maintain View Pre-Paid Inventory maintenance":
Overview screen and on the Display View Pre-Paid Inventory maintenance": Overview screen:

• In the Materials field, the code for the material is automatically listed
• In the ValA field, the code for the plant, to which the material is assigned, is displayed
• In the Val. type field, the code for the group or stock of materials, to which the listed
material is assigned, is displayed
• In the Material description field, the description of the listed material is displayed from the
material master
• In the PPInv indicator field, you enter a check if the material listed on the line is managed
as prepaid inventory activities

Assigning House Banks to Joint Ventures

Procedure
Menu Path

1. On the SAP Easy Access menu, choose Joint venture accounting → Master data → Joint
Venture → Maintenance.
2. On the Joint Venture Master: Initial Screen, enter the Company code and the Joint
venture code.

Assigning a Funding Group to Joint Ventures

Procedure
Menu Path

1. On the SAP Easy Access menu, choose Joint venture accounting → Master data → Joint
Venture → Maintenance.
2. On the Joint Venture Master: Initial Screen, enter the Company code and the Joint
venture code.

Actual Posting

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Definition
In SAP Joint Venture Accounting (JVA), actual posting covers the following areas:

• Posting Expenses and Managing Asset Transfers

• Issuing and Receiving Cash Calls
• Processing Non-operated Invoices
• Managing Asset Transfers
• Processing Inbound EDI Intermediate Documents (IDocs)

Posting Expenses and Managing Asset

Transfers
Use
• Cash Calls

Companies use cash calls to fund expenditures incurred on behalf of a joint venture.

• Non-operated invoices

These are generated after billing details are entered into the SAP Joint Venture Accounting (JVA)
system.

• Asset management transfers

The operator can use asset management transfers to remove an asset from its books and to bill
the partners at the current price. This involves comparing the historical cost against the current
replacement price.

• Electronic Data Interchange (EDI) inbound

This encompasses electronic billing.

Features
• Viewing an SAP JVA Document Before Posting

During a test phase, it is often helpful to view an SAP JVA document before it is really posted.
This feature is possible only if the user has the GJ_JVA_TEST parameter with an X in the value
field. If this parameter is set, the system prompts a pop-up screen for each posting where a joint
venture document is created. The screen shows the most important joint venture document fields
and how it will be posted. You can either cancel or continue posting. To set the GJ_JVA _TEST
parameter follow this menu path:

Own parameters: System → User profile → Own data → Parameter

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or

User maintenance: Tools → Administration → User Maintenance → Users

• Problems With Posting Groups

Problems can arise in splitting if you group a vendor or customer posting with a clearing posting
under one document. Different rules govern the two transactions. A clearing line is always split
according to the documents which will be cleared with the line. If a vendor or customer posting is
in the same document, it too will be split in error. By creating two separate documents, the proper
split rule applies.

Cash Calls

Purpose

Cash calls are requests for payment for anticipated future capital and operating
expenditures, sent by joint venture operators to non-operating partners. Most joint
operating agreements (JOAs) include a provision that allows the operator to issue cash
calls to non-operating partners. When the company running SAP Joint Venture
Accounting (JVA) operates a venture, that company issues operated cash calls to its non-
operating partners. When the company running SAP JVA is a non-operating partner in a
venture, that company receives non-operated cash calls from the operator of the venture.

Operated Cash Calls

Operated cash calls are requests to the non-operating partners of joint ventures for
payment of expenses before they are incurred. The transactions are posted as two equal
and opposite open items to a partner account. The items are posted with two different
Special G/L Entry Indicators ( SEI). Although the items update the same partner account,
they update different general ledger accounts which are identified via the SEI. The open
item is cleared when cash is received from the partner.
An operator can also post a cash call to itself. The entries produced by this type of cash
call are posted as memo entries (representing both cash requested and cash received)
directly to the billing ledger. The cash received is posted on the assumption that an
appropriate transfer will be made from the operator bank account to the joint venture
bank.

Non-Operated Cash Calls

Non-operated cash calls are requests for payment of prospective expenses received from
an operator of a venture in which the company running SAP JVA is a non-operating
partner. The transactions are posted as two open items to an operator vendor account.
Like operated cash calls, the items are posted with two different SEIs, which update the
same partner account, but different general ledger accounts. One open item is cleared
with a cash payment to the operator. The other item is cleared manually in the non-

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operating company’s system with actual expenditures received in a non-operated bill
from the operator.

Reclassification

Cash calls are often issued by the operator and paid by partners several months before
expenditures are incurred. When this occurs, a reclassification process takes place.
Reclassification is an SAP JVA process that has the following two major functions:
• It creates an accounting record of cash call payments in the month when they are received
• It applies cash call payments in the month when expenditures are incurred
The reclassification process accomplishes these two tasks by connecting the accounting
entries related to the steps in the cash call process to two time values:
• Billing month ( the month the expense appears on the bill to the customer)
• Operations month (the month the payment is matched against the expenditure)
By using the billing and operations month, the SAP JVA reclassification process
identifies the cash call payments that should be included in the partner’s current month
bill.

Process Flow
A typical cash call transaction proceeds through the following sequence of steps:
...

1. A cash call is issued.

2. A cash call payment is posted.
3. An expense for which the cash call was issued is then posted.
4. The cash call is reclassified for clearing.

Cash Call Transactions Occur in SAP JVA and FI

Not all cash call steps are executed within SAP JVA itself. Some steps are executed
within SAP JVA, and the results are posted to standard SAP components through FI.
Conversely, other steps are executed within FI, and the results are transferred to SAP
JVA for further processing. FI and SAP JVA documents are produced as a result of each
transaction. The following table indicates the major steps in the sequence of processing
cash calls.
Processes Executed in JVA or FI

Process JVA FI
Issue cash call request X
Post cash call payment X
Post expense X
Reclassify cash call X

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Methods of Posting Cash Calls

Cash calls can be posted net or gross. Net cash calls are requests made to a single partner.
Gross cash calls are requests made to all partners in an equity group. In addition, cash
calls can be posted by venture or by project.
Possible Cash Call Options

Type of Cash Call Operated Non-operated

Venture / Net by venture for a single by venture or equity group for various
partner currencies
Venture / Gross by venture for all
partners in an equity
group
Project / Net by project for a single by project for various currencies
partner
Project / Gross by project for all
partners in an equity
group

Cash Call Reclassification: Splitting by Billing and Operational Month

You can clear multiple cash calls issued in different months (with different billing
months) against expenditures in the same operational month through a single
reclassification posting. You can also clear multiple cash calls, intended to be matched
against expenditures in different months, (cash calls with different operational months)
within the same operational month.
The operational month is stored in the XREF1 and the billing month in the XREF2 field
of the original cash call document, as well as in the final clearing document posted by the
reclassification process.
When you select multiple cash calls with different operational or billing months for
inclusion in a single execution of the reclassification process, the cash call clearing
document posted by that process can be split according to operational and billing months.
This handling may be selected through FI configuration. The setting is independent of
company client, so it applies to the entire SAP system.
To make this setting, follow this menu path in the IMG:
...

1. On the Display structure menu, choose Financial Accounting → General Ledger

Accounting → Business Transactions → Open Item Clearing.
2. Select Define clearing rules. On the FI Clearing Rules table, enter the name and
description of the new clearing rule to be used to split cash call reclassification documents
by billing and operational months.
3. Select the radio button Clearing rule fields. On the Definition of FI Clearing Rules
table, enter the item numbers and the field names by which the documents controlled by
this rule will be sorted (XREF1 for operational month and XREF2 for billing month).
4. After you define the new clearing rule, return to the Open Item Clearing heading on
the IMG and select Assign clearing rules to account types. On the Maintenance View for
Assigning FI Clearing Rules screen, enter a D for customer accounts in the AcTyp field and

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 the name of the clearing rule that will ensure that reclassification documents are split by
operational and billing months in the Clearing rule field.

Posting Cash Calls to Intercompany Partners

You can send cash calls from one company that uses SAP to another company that uses
SAP within the same client. Both companies must be configured for SAP JVA to enable
this process.

Batch and Online Processing

Cash calls can be submitted online or batch. From the online screens, you can enter the
venture or project cash call information and immediately post the cash call. Alternatively,
you can hold the online information in a batch file for processing later.

Cash Call Direct Print

As of Joint Venture Accounting (CA-JVA) in SAP R/3 Enterprise Extension 2.00, cash
call direct print functions within the cash call transactions allow you to create a separate
hardcopy output for cash call requests.

Example

Partner ABC and the Operator agree to construct a building. Two months before the
project starts, the operator issues a cash call to Partner ABC on the March bill for Partner
ABC's portion of the project expenses expected in May. March is the Billing Month when
the cash call appears on the bill. May is the Operations Month when the actual
expenditures will be incurred. Partner ABC pays the operator for the cash call in April. In
May, the building is completed and actual expenditures are incurred. The cash call
payment is applied against the actual expenditures incurred in May.
When a cash call is issued, identifiers for the billing and operational month of the posting
are stored in the SAP JVA billing ledger (JVTO2). However, the values for the billing
and operational month are not stored in the SAP JVA ledger. Instead, a value that reflects
the delta between the billing or operational month and the posting month of the cash call
is stored in the ledger.
If a cash call is posted in 2/02 with a billing month of 6/02 and an operational month of
12/02, the values stored for billing month (BiM) and operational month (POM) would be
calculated as follows:
BiM = 4 (6/02 - 2/02) and POM = 10 (12/02 - 2/02).

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The delta values (representing the difference between the billing month and the posting
month on the one hand, and the operational month and the posting month on the other),
rather than the values for the months themselves, are stored in JVTO2.

Issuing Cash Calls Operated/Venture/Net

Prerequisites
As with all postings to customer accounts, amounts originating in SAP JVA are posted
automatically to the reconciliation accounts in the general ledger using the posting rules specified
in SAP JVA configuration. In the case of the special general ledger transactions initiated by SAP
JVA, the reconciliation account used for ordinary postings must be mapped to the alternative
reconciliation account to which the postings are made. The account type posting key, combined
with the special general ledger indicator, provides the key that maps the reconciliation account
used for ordinary postings to the alternative reconciliation account to which the posting is made.
Therefore, it is important that you choose the appropriate SAP JVA cash call special indicator
from the possible entries on the pull-down menu.

To enable SAP JVA to process cash call requests, payments, and clearances of actual
expenditures properly, you must configure certain objects and accounts in standard FI. These
items include the following:

• Field status groups

• Posting keys
• Special general ledger entry indicators (SEIs)
• SAP JVA clearing procedures
• Reconciliation accounts
• Customer accounts for partners to whom cash calls will be issued
• Document type

The SAP client that contains SAP JVA is preconfigured with the FI objects and accounts as well
as the SAP JVA objects needed to execute cash calls. Your system administrator may choose to
change some of these items.

Prerequisites in CO

You can issue cash calls for a joint venture or for a project. To issue cash calls for a project, you
must first set up a work breakdown structure in CO with the following characteristics:

• Valid account in the project master record

• Project status open for FI postings
• Billable recovery indicator assigned to the project

See also:

Projects and Work Breakdown Structure (WBS) Elements

If the company running SAP JVA is in the US or Canada, SAP JVA will verify that the project is
not in suspense before posting to it.

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Prerequisites in SAP JVA

To enable SAP JVA to process cash calls for your company, you must establish the following pre-
conditions within SAP JVA:

• Activate ventures for which cash calls will be issued on the venture master record screen.
• Activate equity groups to whom cash calls will be issued
• Use a funding currency that is valid for the venture

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → Cash calls
operated → Venture net.

The Net Cash Call to Equity Group Header screen appears.

Procedure
To issue cash calls operated/venture/net, proceed as follows:

1. Enter the Company code on the Net Cash Call to Equity Group Header screen.

2. Enter the partner code in the Partner field.

3. Enter a date for the operations month.

The operations month is the designated month in the future in which a cash call payment is
matched against the actual expenditures and reported on the customer’s bill. All cash call
payments not already reclassified with an operations month equal to or less than the current
month are included in the reclassification process. The value is derived from user input on the
cash call screen. The operations month appears in the FB01 Standard Expense Posting
document Ref. 1 field.

In addition to playing a key role in reclassifying cash call payments, billing month and operations
month also affect follow-on processes, such as netting and billing.

4. Choose ENTER. The Net Cash Call to Equity Group Detail screen is then displayed.

5. Enter the code for the venture for which the cash call will be issued in the JV field.

6. Enter the code for the equity group in the venture for which the cash call will be issued in the
EqG field.

7. Specify the amount for which the cash call will be issued in the Fundcur field.

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8. To override the operations month on the initial cash call screen, if this option is desired, enter
the date for the operations month for which the cash call will be issued for the particular venture
and equity group or project in the OM field.

9. Choose SAVE. A system message confirms that a document was posted.

Cash Call Direct Print

Use

SAP JVA allows you to create a separate hard copy output for cash call requests. The
cash call transactions (GJ01, GJ02, GJ03, and GJ04) contain two push buttons for this
purpose: Print Cash Call Bill and Print Call and Post.

Menu Path

On the SAP Easy Access menu, choose Accounting → Joint Venture Accounting →
Actual posting → Cash calls operated .

Features

The cash call direct print capabilities allow you to print a letter (generated in SAPscript)
based on a cash call request, then fax or e-mail the cash call letter to joint venture
partners.
The SAPscript document template consists of three pages (first page, next page, and
attachment), each one containing at least one header window and a main window. Each
header window contains such details as the contact name and address of the operator and
the appropriate joint venture partner and the cash call currency. This header window also
displays the effective date of the cash call and the due date, based on the billing month of
the cash call and the payment terms of the partners. The main section contains the actual
cash call values, broken down by venture and equity group, and by venture, equity group
and project. The attachment displays the equity shares of all venture partners.

Issuing Cash Calls Operated/Venture/Gross

Prerequisites
As with all postings to customer accounts, amounts originating in SAP JVA are posted
automatically to the reconciliation accounts in the general ledger using the posting rules specified
in SAP JVA configuration. In the case of the special general ledger transactions initiated by SAP
JVA, the reconciliation account used for ordinary postings must be mapped to the alternative
reconciliation account to which the postings are made. The account type posting key, combined
with the special general ledger indicator, provides the key that maps the reconciliation account
used for ordinary postings to the alternative reconciliation account to which the posting is made.

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Therefore, it is important that you choose the appropriate SAP JVA cash call special indicator
from the possible entries on the pull-down menu.

To enable SAP JVA to process cash call requests, payments, and clearances of actual
expenditures properly, you must configure certain objects and accounts in standard FI. These
items include the following:

• Field status groups

• Posting keys
• Special general ledger entry indicators (SEIs)
• SAP JVA clearing procedures
• Reconciliation accounts
• Customer accounts for partners to whom cash calls will be issued
• Document type

The SAP client that contains SAP JVA is preconfigured with the FI objects and accounts as well
as the SAP JVA objects needed to execute cash calls. Your system administrator may choose to
change some of these items.

Prerequisites in CO

You can issue cash calls for a joint venture or for a project. To issue cash calls for a project, you
must first set up a work breakdown structure in CO with the following characteristics:

• Valid account in the project master record

• Project status open for FI postings
• Billable recovery indicator assigned to the project

For additional information, refer to Projects and Work Breakdown Structure (WBS)
Elements.

If the company running SAP JVA is in the US or Canada, SAP JVA will verify that the project is
not in suspense before posting to it.

Prerequisites in SAP JVA

To enable SAP JVA to process cash calls for your company, you must establish the following pre-
conditions within SAP JVA:

• Activate ventures for which cash calls will be issued on the venture master record screen.
• Activate equity groups to whom cash calls will be issued
• Use a funding currency that is valid for the venture

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → Cash calls
operated → Venture gross.

The Gross Cash Call to Equity Group Header screen appears.

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Procedure
To issue cash calls operated/venture/gross proceed as follows:

1. Enter the Company code on the Gross Cash Call to Equity Group Header screen.
2. Enter a date for the operations month.

The operations month is the designated month in the future in which a cash call payment
is matched against the actual expenditures and reported on the customer’s bill. All cash
call payments not already reclassified with an operations month equal to or less than the
current month are included in the reclassification process. The value is derived from user
input on the cash call screen. The operations month appears in the FB01 Standard
Expense Posting document Ref. 1 field.

In addition to playing a key role in reclassifying cash call payments, billing month and
operations month also affect processes, such as netting and billing.

3. Choose ENTER. The Gross Cash Call to Equity Group Detail screen is then displayed.
4. Enter the code for the venture for which the cash call will be issued in the JV field.
5. Enter the code for the equity group in the venture for which the cash call will be issued in
the EqG field.
6. Specify the amount for which the cash call will be issued in the Fundcur field.
7. To override the operations month on the initial cash call screen, if this option is desired,
enter the date for the operations month for which the cash call will be issued for the
particular venture and equity group or project in the OM field.
8. Choose SAVE. A system message confirms that a document was posted.

Issuing Cash Calls Operated/Project/WBS/Net

Prerequisites
As with all postings to customer accounts, amounts originating in SAP JVA are posted
automatically to the reconciliation accounts in the general ledger using the posting rules specified
in SAP JVA configuration. In the case of the special general ledger transactions initiated by SAP
JVA, the reconciliation account used for ordinary postings must be mapped to the alternative
reconciliation account to which the postings are made. The account type posting key, combined
with the special general ledger indicator, provides the key that maps the reconciliation account
used for ordinary postings to the alternative reconciliation account to which the posting is made.
Therefore, it is important that you choose the appropriate SAP JVA cash call special indicator
from the possible entries on the pull-down menu.

To enable SAP JVA to process cash call requests, payments, and clearances of actual
expenditures properly, you must configure certain objects and accounts in standard FI. These
items include the following:

• Field status groups

• Posting keys

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 • Special general ledger entry indicators (SEIs)
• SAP JVA clearing procedures
• Reconciliation accounts
• Customer accounts for partners to whom cash calls will be issued
• Document type

The SAP client that contains SAP JVA is preconfigured with the FI objects and accounts as well
as the SAP JVA objects needed to execute cash calls. Your system administrator may choose to
change some of these items.

Prerequisites in CO

You can issue cash calls for a joint venture or for a project. To issue cash calls for a project, you
must first set up a work breakdown structure in CO with the following characteristics:

• Valid account in the project master record

• Project status open for FI postings
• Billable recovery indicator assigned to the project

See also:

Projects and Work Breakdown Structure (WBS) Elements

If the company running SAP JVA is in the US or Canada, SAP JVA will verify that the project is
not in suspense before posting to it.

Prerequisites in SAP JVA

To enable SAP JVA to process cash calls for your company, you must establish the following pre-
conditions within SAP JVA:

• Activate ventures for which cash calls will be issued on the venture master record screen.
• Activate equity groups to whom cash calls will be issued
• Use a funding currency that is valid for the venture

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → Cash calls
operated → Project/WBS el net

The Net Cash Call to Projects Header screen appears.

Procedure
1. Enter the Company code on the Net Cash Call to Projects Header screen.
2. Enter a date for the Operations month in the field provided.

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 The operations month is the designated month in the future in which a cash call payment
is matched against the actual expenditures and reported on the customer’s bill. All cash
call payments not already reclassified with an operations month equal to or less than the
current month are included in the reclassification process. The value is derived from user
input on the cash call screen. The operations month appears in the FB01 Standard
Expense Posting document Ref. 1 field.

In addition to playing a key role in reclassifying cash call payments, billing month and
operations month also affect processes, such as netting and billing.

3. Choose ENTER. The Net Cash Call to Projects Detail screen is then displayed.
4. Enter the code for the venture for which the cash call will be issued in the JV field.
5. Enter the code for the WBS element for which the cash call will be issued in the Project
Nbr / Due on DT field.
6. Specify the amount for which the cash call will be issued in the Fundcur field.
7. To override the operations month on the initial cash call screen, if this option is desired,
enter the date for the operations month for which the cash call will be issued for the
particular venture and equity group or project in the OM field.
8. Choose SAVE. A system message confirms that a document was posted.

Issuing Cash Calls Operated/WBS/Gross

Prerequisites
As with all postings to customer accounts, amounts originating in SAP JVA are posted
automatically to the reconciliation accounts in the general ledger using the posting rules specified
in SAP JVA configuration. In the case of the special general ledger transactions initiated by SAP
JVA, the reconciliation account used for ordinary postings must be mapped to the alternative
reconciliation account to which the postings are made. The account type posting key, combined
with the special general ledger indicator, provides the key that maps the reconciliation account
used for ordinary postings to the alternative reconciliation account to which the posting is made.
Therefore, it is important that you choose the appropriate SAP JVA cash call special indicator
from the possible entries on the pull-down menu.

To enable SAP JVA to process cash call requests, payments, and clearances of actual
expenditures properly, you must configure certain objects and accounts in standard FI. These
items include the following:

• Field status groups

• Posting keys
• Special general ledger entry indicators (SEIs)
• SAP JVA clearing procedures
• Reconciliation accounts
• Customer accounts for partners to whom cash calls will be issued
• Document type

The SAP client that contains SAP JVA is preconfigured with the FI objects and accounts as well
as the SAP JVA objects needed to execute cash calls. Your system administrator may choose to
change some of these items.

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Prerequisites in CO

You can issue cash calls for a joint venture or for a project. To issue cash calls for a project, you
must first set up a work breakdown structure in CO with the following characteristics:

• Valid account in the project master record

• Project status open for FI postings
• Billable recovery indicator assigned to the project

See also:

Projects and Work Breakdown Structure (WBS) Elements

If the company running SAP JVA is in the US or Canada, SAP JVA will verify that the project is
not in suspense before posting to it.

Prerequisites in SAP JVA

To enable SAP JVA to process cash calls for your company, you must establish the following pre-
conditions within SAP JVA:

• Activate ventures for which cash calls will be issued on the venture master record screen.
• Activate equity groups to whom cash calls will be issued
• Use a funding currency that is valid for the venture

Menu Path

On the SAP Easy Access screen, choose Joint venture accounting → Actual posting → Cash
calls operated → Project/WBS el gross.

The Gross Cash Call to Projects Header screen appears.

Procedure
1. Enter the Company code on the Gross Cash Call to Projects Header screen.
2. Enter a date for the operations month in the field provided.

The operations month is the designated month in the future in which a cash call payment
is matched against the actual expenditures and reported on the customer’s bill. All cash
call payments not already reclassified with an operations month equal to or less than the
current month are included in the reclassification process. The value is derived from user
input on the cash call screen. The operations month appears in the FB01 Standard
Expense Posting document Ref. 1 field.

In addition to playing a key role in reclassifying cash call payments, billing month and
operations month also affect processes, such as netting and billing.

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 3. Choose ENTER. The Gross Cash Call to Projects Detail screen is then displayed.
4. Enter the code for the project for which the cash call will be issued in the Project Nbr
field.
5. Enter the code for the WBS element for which the cash call will be issued in the Project
Nbr / Due on DT field.
6. Specify the amount for which the cash call will be issued in the Fundcur field.
7. To override the operations month on the initial cash call screen, if this option is desired,
enter the date for the operations month for which the cash call will be issued for the
particular venture and equity group or project in the OM field.
8. Choose SAVE. A system message confirms that a document was posted.

Reclassifying Cash Calls

Prerequisites
On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → Cash calls
operated → Cash call reclass.

The Cash Call Reclassification screen appears.

Procedure
1. Enter the Company code on the Cash Call Reclassification screen.
2. Narrow your search by specifying additional optional information in the following fields:

Partner

Partner Group

Venture

Equity Group

3. Enter a date for the operations month in the field provided.

The operations month is the designated month in the future in which a cash call payment
is matched against the actual expenditures and reported on the customer’s bill. All cash
call payments not already reclassified with an operations month equal to or less than the
current month are included in the reclassification process. The value is derived from user
entry on the cash call screen. The operations month appears in the FB01 Standard
Expense Posting document Ref. 1 field.

In addition to playing a key role in reclassifying cash call payments, billing month and
operations month also affect processes, such as netting and billing.

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 4. Select one or more indicator buttons to choose a Processing Option. You can run a
Control report prior to running a batch session. Choose Execute to view the Cash Call
Reclassification Batch Input Details. Choose BACK to return to the Cash Call
Reclassification screen. Then choose the preferred option. Choose EXECUTE. The cash
calls are reclassified when your batch jobs are complete.
5. To check the batch session status, follow this menu path:

System → Services → Batch input → Session

The Batch Input: Session Overview screen appears.

6. Enter the session name.

Receiving Cash Calls Non-operated/Venture

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → Cash calls
non-oper. → Venture.

The Non-operated Cash Call to Equity Group screen appears.

Procedure
1. Enter the code for the company in the Company code field on the Non-operated Cash
Call to Equity Group screen.
2. Enter a date for the operations month in the field provided.

The operations month is the designated month in the future in which a cash call payment
is matched against the actual expenditures and reported on the customer’s bill. All cash
call payments not already reclassified with an operations month equal to or less than the
current month are included in the reclassification process. The value is derived from user
input on the cash call screen. The operations month appears in the FB01 Standard
Expense Posting document Ref. 1 field.

In addition to playing a key role in reclassifying cash call payments, billing month and
operations month also affect processes, such as netting and billing.

3. Choose ENTER. The Non-operated Cash Call to Equity Group (detail) screen is
displayed.

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 4. Enter the code for the joint venture for which the cash call will be issued in the JV field
(required).
5. Enter the code for the equity group in the venture for which the cash call will be issued in
the EqG field (required).
6. Enter the funding currency in the Fcurr field.
7. Specify the amount for which the cash call will be issued in the Fundcur field.
8. To override the operations month on the initial cash call screen, if this option is desired,
enter the date for the operations month for which the cash call will be issued for the
particular venture and equity group or project in the OM field.
9. SAVE. A system message confirms that a document was posted.

Receiving Cash Calls Non-Operated/Projects/WBS

Elements
Prerequisites
On the SAP R/3 main menu, choose Joint venture accounting → Actual posting → Cash calls
non-oper. → Projects/WBS elemnts

The Non-operated Cash Call to Projects screen appears.

Procedure
1. Enter the code for the company in the Company code field on the Non-operated Cash
Call to Projects screen.
2. Enter a date for the operations month in the field provided.

The operations month is the designated month in the future in which a cash call payment
is matched against the actual expenditures and reported on the customer’s bill. All cash
call payments not already reclassified with an operations month equal to or less than the
current month are included in the reclassification process. The value is derived from user
input on the cash call screen. The operations month appears in the FB01 Standard
Expense Posting document Ref. 1 field.

In addition to playing a key role in reclassifying cash call payments, billing month and
operations month also affect processes, such as netting and billing.

3. Choose ENTER. The Non-operated Cash Call to Projects (detail) screen appears.
4. Enter the code for the project in the Project Nbr field.
5. Enter the funding currency in the Fcurr field.
6. Specify the amount for which the cash call will be issued in the Fundcur field.
7. To override the operations month on the initial cash call screen, if this option is desired,
enter the date for the operations month for which the cash call will be issued for the
particular venture and equity group or project in the OM field.

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 8. Choose SAVE. A system message confirms that a document was posted.

Batching Cash Calls

Prerequisites
On the SAP Easy Access menu, choose → Joint venture accounting → Actual posting → Cash
call batch ses.

The Cash Call Update screen appears.

Procedure
1. Enter the code for the company in the Company code field on the Cash Call Update screen.

2. Specify the Posting period.

3. Choose from the Processing options:

Post gross documents

Delete batch after posting

Update via batch-input

Inter-company postings

4. Choose EXECUTE.

5. Choose SAVE.

6. To check the batch session status, follow this menu path:

System → Services → Batch input → Edit

The Batch Input: Initial Screen appears.

Enter the session name.

Non-Operated Invoices
Use
You use the non-operated billing transaction to enter billing details (often from paper) into the
SAP Joint Venture Accounting (JVA) system. You can enter billing by operator or by venture. If

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you choose to enter billing by operator, a list of ventures and equity groups is proposed. If you
choose to enter billing by venture, only valid equity groups for the venture are displayed.

On the first screen of the transaction, you enter the company and venture, along with the posting
date and funding currency. You can also specify a value date for currency conversion to local
currency. If tax is to be included with the billing, you should indicate an amount on the initial
screen. In addition, you may enter a billing text or reference document number that will appear on
the header of any document posted by the billing transaction.

Processing Non-Operated Invoices by Operator

Prerequisites
Projects and or WBS Elements must be created prior to generating non-operated invoices.

See also:

Projects and Work Breakdown Structure (WBS) Elements

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → Non-
operated invoice → By operator

The Non-Operated Billing Header Screen by Operator screen appears.

Procedure
1. Enter the Company code on the Non -Operated Billing Header Screen by Operator.
2. Enter the code for the partner in the Partner field.
3. Enter the currency code in the Funding currency field.

Exchange rate, Translation date, Billing Text, Reference doc., and Tax Amount are
optional fields. In the Exchange rate and Translation date fields you can specify a
conversion rate and a value date for currency conversion to local currency. If you do not
specify a Translation date, the Posting date is used as the default date for the currency
conversion. If a Billing Text or Reference doc. number are entered, they will appear on
the header of any document posted by the billing transaction. If tax is to be entered with
the billing, you should enter the total tax amount for all venture or ventures in the Tax
Amount field. If this field is left blank, no tax fields will be available in the following
screens.

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 4. Choose either Net or Gross. The corresponding screen is displayed:
Non-Operated Venture/Equity Group Overview: Net Entry or
Non-Operated Venture/Equity Group Overview: Gross Entry
5. Enter the Net Amount for each venture.
6. Choose the Select function. The Non-Operated Billing Detail Screen will appear.
7. Enter the expense line detail. If, you have selected Net, the line amounts must equal the
original total net amount specified in step 5. If you have selected Gross, this amount will
be a percentage share of the gross amount. For example, if the equity group non-
operating share is 30% of the venture and the net amount is $30, than the gross line
detail should equal 100% in this example $100.

Cost objects must be set up and assigned to the joint venture, in order for line detail fields
to appear on the screen. Refer to:

Projects and Work Breakdown Structure (WBS) Elements

Cost Centers

A cost center is an organizational unit that represents a defined location of cost

incurrence. The definition can be based on functional requirements, allocation criteria,
physical location, or responsibility for costs.

8. Choose ENTER. The total will appear in the Total Field. Choose the Accept function.

If more than one venture exists, repeat steps 5, 6, 7 and 8 for each venture.

9. Choose SAVE. A system message confirms that the document has been posted.

Processing Non-Operated Invoices by Venture

Prerequisites
Projects and or WBS Elements must be created prior to generating non-operated invoices.

See also:

Projects and Work Breakdown Structure (WBS) Elements

Menu Path

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On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → Non-
operated invoice → By venture.

The Non-Operated Billing Header Screen by Venture appears.

Procedure
1. Enter the Company code on the Non -Operated Billing Header Screen by Venture.
2. Enter the venture code in the Venture field.
3. Enter the currency code in the Funding currency field.
4. Choose either Net or Gross. The corresponding screen is displayed:
Non-Operated Venture/Equity Group Overview: Net Entry or
Non-Operated Venture/Equity Group Overview: Gross Entry
5. Enter the Net Amount.
6. Choose the Select function. The Non-Operated Billing Detail Screen is displayed.
7. Enter the expense line detail. If, you have selected Net, the line amounts must equal the
original total net amount specified in step 5. If you have selected Gross, this amount will
be a percentage share of the gross amount. For example, if the equity group non-
operating share is 30% of the venture and the net amount is $30, than the gross line
detail should equal 100% in this example $100.

You must set up cost objects and assign them to the joint venture, so that line detail fields
will appear on the screen. Refer to:

Projects and Work Breakdown Structure (WBS) Elements

Cost Centers

A cost center is an organizational unit that represents a defined location of cost

incurrence. The definition can be based on functional requirements, allocation criteria,
physical location, or responsibility for costs.

8. Choose ENTER. The total will appear in the Total Field. Choose the Accept function.
9. Choose SAVE. The document number appears.

Asset Transfers
Use
The SAP Joint Venture Accounting (JVA) component uses standard SAP Asset Management
(AM) functions. To understand the AM processes for SAP JVA, you must understand the
standard SAP AM structure. This structure is comprised of the following components.

• Chart of Depreciation

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The chart of depreciation contains the defined depreciation areas. It also contains the rules for
the evaluation of assets that are valid in a given country or economic area. Each company code
is allocated to one chart of depreciation. Several company codes can work with the same chart of
depreciation. The chart of depreciation and the chart of accounts are completely independent of
one another.

• Depreciation Areas

The depreciation area shows the valuation of assets for a particular purpose (for example, the
individual financial statements, balanced sheets for tax purposes, and cost accounting values). In
addition to defining real areas, you can define derived areas. The value of these derived areas
are calculated from two or more real areas.

• Asset Class

This is the main criterion for classifying assets by business and legal requirements. For each
asset class, you can define control parameters and default values for depreciation calculation and
other master data. Each asset master record must be allocated to one asset class. Special asset
classes are:

Assets under construction

Low-value assets

Leased assets

Financial assets

Technical assets

• Asset Master Records

You can represent asset master records by using unique numbers.

Individual Asset Records - One asset can represent one table or a set of tables that are charged
to one CO element, such as a cost center.

Main Asset Records with Sub-Numbers and Individual Asset Records - In this configuration,
many assets can be at an individual level, and assets will be associated with other assets.

Main Asset Records with Sub-Numbers - You can configure main asset records with sub-
numbers for asset classes, where the assets require an association such as an acquisition year,
location, or a similar use. This is used for joint venture asset transfers

Depreciation at a Group Asset Level

SAP functions allow depreciation at a summary or group asset level. All postings to the assets
below a group asset are immediately reflected in the group asset. In SAP JVA, the individual
assets are linked to the group asset through the book depreciation area of each asset record. The
benefits of group asset functionality include:

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 • Increased depreciation run efficiency or fewer calculations
• Fewer monthly production units to enter into the system

Recovery Indicators

In AM, the depreciation areas are accumulators for the asset value and depreciation value for all
of the depreciation calculations. These areas track billable and nonbillable values for each asset.
All acquisitions, transfers and retirements are tracked in the depreciation areas and the
depreciation postings are calculated from the resulting period end value of the assets.

SAP JVA, accumulates the postings based on recovery indicators. The value posted to the
depreciation area is driven by the fact that the entry is billable or non-billable. To do this, the
following three new depreciation areas must be configured in SAP JVA:

• Billable - linked to the billable recovery indicator

• Non-billable - linked to the nonbillable recovery indicator
• Gross value - A derived area representing a summation of the billable and the
nonbillable depreciation areas (optional)

Estimated Book Cost (EBC)

The EBC is the estimated cost of the asset at the time of acquisition. The EBC for the valuation of
assets is based on the current value and the asset acquisition year or vintage year. Asset
accounting within SAP JVA requires automated EBC, because most companies will not have one
asset record for each asset, and in turn will not have historical cost for each asset. For example,
one asset master record represents 1,000 different values.

For joint venture asset transfers, you must compare the historical cost against the current
replacement price (CRP) to remove the asset from the operator’s books and bill the partners at a
current price. The historical price is an EBC and is based on published pricing indexes. The
Replacement Value Index (RVI) table is maintained within the SAP JVA configuration menus. The
following graphics depict the EBC calculation:

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The current replacement price is the estimated cost of purchasing or producing an equivalent
item net of depreciation.

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Requirements for Postings

Joint venture asset transfers are complex because of the need to accommodate book, tax, and
joint venture requirements all in the same transaction. The transaction is required to create a
number of different postings to fulfill the following requirements:

• An increase in asset ownership must be flagged as a current year addition for tax
depreciation requirements and internal budgeting
• For general ledger accounting or book purposes, you must remove assets from their old
location at historical cost (EBC)
• For joint venture contractual purposes, you must charge and credit assets to joint venture
partners based on a current replacement price (CRP)
• For book and tax purposes, you must report a decrease in ownership due to a transfer as
an asset retirement.

The procedures described in this section are for North American requirements.

Transferring an Asset to a Work in Process

(WIP)
Prerequisites
The following configuration requirements are needed before you transfer assets:

AM/MM Master Data (Company Level) Configuration

Estimated Book Cost Configuration

Depreciation Areas and Depreciation Keys Configuration

Refer to the IMG for complete configuration details.

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → AM
transfers in JV → Asset to WIP.

The JV Transfer Asset to Project/Order screen appears.

Procedure

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 1. Enter the Document date and the Posting date only if the dates vary from the default
dates that appear on the JV Transfer Asset to Project/Order screen.
2. Complete the following fields:

Type

Company code

Asset

Vintage Yr/Mth.

G/L account no. (receiver)

Fixed asset

Material

Quantity (You can enter the unit of measure in the adjacent field.)

3. Choose Continue. The JV Transfer Asset to Project/Order dialog box appears with a CRP
total displayed.
4. Choose Continue. The following fields are displayed on the JV Transfer Asset to Asset
dialog box:

Current New Price

Index vintage year

Index current year

Estimated book cost (EBC)

5. Choose Continue. The CRP total and EBC total values are displayed. Enter an amount in
the EBC selected field.

You can change the EBC total by entering the new amount and choosing the Update
EBC function.

6. Choose SAVE. A message system confirms that an asset transaction was posted with a
document number.

Transferring an Asset to an Asset

Prerequisites
The following configuration requirements are needed before you transfer assets:

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AM/MM Master Data (Company Level) Configuration

Estimated Book Cost Configuration

Depreciation Areas and Depreciation Keys Configuration

Refer to the IMG for complete configuration details.

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → AM
transfers in JV → Asset to asset.

The JV Transfer Asset to Asset screen appears.

Procedure
1. Enter the Document date and the Posting date only if the dates vary from the default
dates that appear on the JV Transfer Asset to Asset screen.
2. Complete the following fields:

Type

Company code

Asset

Vintage Yr/Mth.

Fixed asset (Asset to which the transfer is to be made.)

Material

Quantity (You can enter the unit of measure in the adjacent field.)

3. Choose Continue. The JV Transfer Asset to Asset dialog box appears with a CRP total
displayed.
4. Choose Continue. The following fields are displayed on the JV Transfer Asset to Asset
dialog box:

Current New Price

Index vintage year

Index current year

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 Estimated book cost (EBC)

5. Choose Continue. The CRP total and EBC total values are displayed. Enter an amount in
the EBC selected field.

You can change the EBC total by entering the new amount and choosing the Update
EBC function.

6. Choose SAVE. A system message confirms that an asset transaction was posted with a
document number.

Retiring an Asset
Prerequisites
The following configuration requirements are needed before you transfer assets:

AM/MM Master Data (Company Level) Configuration

Estimated Book Cost Configuration

Depreciation Areas and Depreciation Keys Configuration

Refer to the IMG for complete configuration details.

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → AM
transfers in JV → Asset retirement.

The JV Asset Retirement screen appears.

Procedure
1. Enter the Document date and the Posting date only if the dates vary from the default
dates that appear on the JV Asset Retirement screen.
2. Complete the following fields:

Type

Company code

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 Asset

Vintage Yr/Mth.

Fixed asset (Asset to which the transfer is to be made.)

Material

Quantity. (You can enter the unit of measure in the adjacent field.)

3. Choose Continue. The JV Asset Retirement dialog box appears with a CRP total
displayed.
4. Choose Continue. The following fields are displayed on the JV Transfer Asset Retirement
dialog box:

Current New Price

Index vintage year

Index current year

Estimated book cost (EBC)

5. Choose Continue. The CRP total and EBC total values are displayed. Select the
individual indicators and enter an amount in the corresponding EBC Selected field. You
can use the following function keys to make your selection:

Retire Full

Retire Rest.

Mark all

6. Choose SAVE. A system message confirms that an asset transaction was posted with a
document number.

Processing an Asset Sale

Prerequisites
On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → AM
transfers in JV → Asset sale.

The JV Asset Sale screen appears.

Procedure

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1. Enter the Document date and the Posting date only if the dates vary from the default dates that
appear on the JV Asset Sale screen.

2. Complete the following fields:

Type

Company code

Asset

Vintage Yr/Mth.

Material

Neg.Price (negotiated price)

Quantity (You can enter the unit of measure in the adjacent field.)

Text

3. Choose Continue. The following fields are displayed on the JV Asset Sale dialog box:

Current New Price

Index vintage year

Index current year

Estimated book cost (EBC)

4. Choose Continue. The CRP total and EBC total values are displayed. Select the individual
indicators and enter an amount in the corresponding EBC Selected field .

5. Choose SAVE. A system message confirms that an asset transaction was posted with a
document number.

Transferring a Work in Process (WIP) to a WIP

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → AM
transfers in JV → WIP to WIP.

The JV Project/Order to Project/Order screen appears.

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Procedure
1. Enter the Document date and the Posting date if the dates vary from the default dates
that appear on the JV Project/Order to Project/Order screen.
2. Complete the following fields:

Type

Company code

Order or WBS elem. (Sender)

Order or WBS elem. (Receiver)

G/L account no.

Material

Quantity (You can enter the unit of measure in the adjacent field.)

Text

3. Choose Continue

The JV Project/Order to Project/Order dialog box displays the CRP total.

4. Choose Continue.

The line items, posting keys, account numbers are displayed on the screen.

5. Choose SAVE. A system message confirms that an asset transaction was posted with a
document number.

Transferring a Work in Process (WIP) to an

Asset
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → AM
transfers in JV → WIP to Asset.

The JV Project/Order to Asset screen appears.

Procedure

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1. Enter the Document date and the Posting date only if the dates vary from the default dates that
appear on the JV Project/Order to Asset screen.

2. Complete the following fields:

Type

Company code

Order or WBS elem. (Sender)

G/L account no.

Fixed Asset (Receiver)

Material

Quantity (You can enter the unit of measure in the adjacent field.)

Text

4. Choose Continue. The JV Project/Order to Asset dialog box displays the CRP total.

5. Choose Continue. The line items, posting keys, account numbers are displayed on the screen.

6. Choose SAVE. A system message confirms that an asset transaction was posted with a
document number.

Inbound EDI Intermediate Documents (IDocs)

Use
In North America, joint interest billing exchange (JIBE) trading partners use standard industry
approved service codes to classify joint interest expenditures that are transmitted electronically.
The use of service codes ensures consistent and accurate billing descriptions on the electronic
bills, regardless of differences in each individual company’s chart of accounts. Service codes may
be periodically added or deleted by the JIBE user group to reflect current industry and
governmental or accounting requirements.

Electronic data interchange (EDI) for joint venture billing for the US and Canada consists of two
standard JIBE transmissions:

1. Operating Statement Transaction Set 819 - Expenditure Detail

2. Invoice Summary Transaction Set 810

Currently, 63 service codes exists for the 819 (Operating Statement) and 10 service
codes for the 810 (Invoice) for the US alone. In addition, free form descriptive segments

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 are used to provide further clarification of the charges transmitted on the JIBE service
codes (such as tangible material descriptions, audit exceptions).

Operating Statement Transaction Set 819 (Expenditure Detail)

Transaction Set 819 contains a detailed summary of costs charged to the joint property in support
of expenditures incurred on the Invoice (810 Transaction Set). It includes the following
information:

• Description of the property

• Authority for expenditure (AFE)

• Summary of gross costs billable to the joint property according to accepted standard service
code cost categories

• Partner’s ownership interest

• Partner’s share of charges

Invoice Summary Transaction Set 810

Transaction Set 810 commonly contains a summary of items shown on the Expenditure Detail
(819 transaction set), plus cash advances and other miscellaneous items charged directly to the
partner. The invoice commonly summarizes the non-operating partner’s share of multiple joint
ventures and is normally the basis for remittance by the non-operating partner.

Processing EDI Inbound Intermediate Documents

(IDocs)
Prerequisites
Your implementation team or system administrator should maintain the following mapping data
prior to processing inbound electronic data interchange (EDI) intermediate documents:

• Company configuration

• Receiver’s joint interest billing exchange (JIBE) code

• Sender’s JIBE code

• Property code

• Withhold code

• Mapping qualifier

• Operating statement cost object mapping

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• Operating statement account mapping

• Operating statement memo authorization for expenditure (AFE)

• Invoice cost object mapping

• Invoice account mapping

You can refer to the IMG for complete configuration details.

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → EDI
inbound → Create IDoc.

The Trigger inbound processing screen appears.

Procedure
1. Enter the Path name on the Trigger inbound processing screen.

2. Choose the Access test function. If processing is successful, the following system message will
appear: EDI: Transfer to ALE level carried out. If it is unsuccessful, an error message will appear.

3. To review the IDocs, follow this menu path:

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ Review IDoc.

Reprocessing Inbound Intermediate Documents

(IDocs)
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Actual posting → EDI
inbound → Reprocess IDoc.

The Start error handling for non-posted IDocs screen appears.

Procedure

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1. Define your search by entering selection criteria in the appropriate fields. For example, the
IDoc number, Date created or Time created on the Start Error Handling for Non-Posted IDocs
screen.

2. Choose the Execute function. The Start Error Handling for Non-posted IDocs screen appears.
IDocs that are processed successfully are highlighted in green, and errors appear in red.

Periodic Processes
Use
Periodic processing includes the following SAP Joint Venture Accounting (JVA) posting
procedures:

Processing International Foreign Currency Exchange

To assign costs to SAP JVA partners at the end of an accounting period you must:

• Determine the value of the balances of foreign currency accounts in terms of local
currency
• Account for the differences (gains and losses) that have resulted from exchange rate
changes during the period
• Assign gains and losses to SAP JVA cost objects and ultimately to partners

Executing CO Allocations

SAP JVA provides functions for allocating costs originally booked to CO cost objects to other CO
cost objects. The following types of allocations are available in SAP JVA:

• Assessments

When you execute an assessment, the expenses, booked to various cost elements during the
period, are aggregated under a special secondary cost element, specified on the assessment
segment. Then, the aggregate amount is booked to each receiving cost object.

• Distributions

When you execute a distribution, the expenses booked to various cost elements during the period
are allocated from the sending cost centers (to which the expenses were originally booked) to
receiving cost objects using the cost element of the original posting. Distributions do not make
use of the special secondary cost elements that are used by assessments.

• Settlements

A settlement consists of an allocation of costs from orders or work breakdown structure (WBS)
elements to cost centers, projects, fixed assets, general ledger accounts, networks, materials
sales orders, or cost objects defined in the settlement rule for the sender.

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Settlement Rules

Settlement rules, and the objects assigned to them, govern settlements of expenses from WBS
elements or orders to their receivers. Settlement rules are assigned to both WBS elements and
orders, and list the settlement objects (mainly the settlement profile that governs the execution of
settlement). There are three types of objects assigned to settlement rules.

Origin structure groups sending cost elements together in order to settle them to dedicated
receivers.

Settlement structure defines the secondary cost elements that will be used to post the results of
the settlement to the receiving objects.

Settlement profile is composed of the origin structure, settlement structure, and further settlement
steering information.

When the origin structure, settlement structure, and settlement profile are defined, you can assign
the settlement profile to the WBS element or order.

Processing Cost Calculations

Many joint venture operators apply overhead charges, some of which must be calculated, to
cover the indirect costs incurred in operating ventures. After these overhead charges are
determined by the SAP JVA Cost Calculations process, the JVA Cutback and Billing processes
assign these charges to the appropriate venture partners.

Running Cutback

The operating partner of a joint venture carries all of the operating costs of that venture
throughout the accounting period. At the end of the accounting period, the operator’s
expenditures are divided between the operator and the non-operating partners, according to their
equity shares. SAP JVA's cutback process assigns expenses to partners.

Executing Netting

In the US and Canada Regions, it is common for one or more partners in a venture to carry the
ownership interest of another partner. In this situation, the carrying partners assume both the
expenses and the revenues that would normally accrue to the carried partner. There are two
types of joint venture partnership arrangements that address these situations:

• Carried interest

A normal working interest partner may become a carried interest partner (CI) by taking one of the
following actions:

o failing to sign the joint operating agreement (JOA)

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 o exercising the non-consent provisions of the JOA and declining to participate as
a working interest partner in proposed exploration, development, and production
activities

If one of these conditions continues, a group of working interest partners in the venture bears the
expenses and shares the revenues that would normally accrue to the CI partner, based on equity
share. Payout is achieved when the revenues exceed the sum of the expenses accumulated
since initiation of this arrangement with a designated additional percentage of the expenses. As a
result, the CI partner’s interest reverts to a normal working interest, and that partner once again
participates as a full working interest equity owner in the venture. A specific CI arrangement
usually applies to one JOA. Payout is achieved when the penalty provisions of that one JOA are
met.

• Net Profit Interest

A normal working interest partner becomes a net profit interest (NPI) partner by making an
agreement with the operating partner to yield a working interest to the operator in return for a
negotiated percentage of the interest’s future revenue. The NPI arrangement is different from the
CI arrangement, because the NPI partner permanently surrenders a working interest in the
venture; whereas, the CI partner temporarily yields the working interest until the interest’s
revenues exceed its expenses by a specified ratio.

Under the conditions of a typical NPI arrangement, the operator of the venture bears the
expenses and enjoys the revenues that would have accrued to the NPI partner, based on the
interest’s equity share. When the revenues exceed the expenses accumulated since initiation of
the arrangement, the NPI partner’s interest does not revert to a normal working interest. Instead
the NPI partner receives a percentage of the relinquished interest’s revenues which is specified in
that partner’s agreement with the operator.

SAP JVA also offers two netting processes to facilitate the period-end closing of customer
accounts by performing reconciliation and by preparing for the SAP JVA billing process. These
two netting processes are:

• Partner Netting

Partner netting refers to netting all expense postings for a partner into one posting for the venture
or equity group.

• Convenience Netting

Usually, convenience netting is used only by US and Canadian region companies. Convenience
netting is a three-step process

1. All open expense items for a partner for a specified period are summarized
2. All open revenue entries for the partner for the period are summarized
3. If the summarized revenues exceed the expenses, a single credit entry is posted to the
partner’s vendor account in FI Accounts Payable

Convenience netting posts this credit entry to the partner’s account if there is a credit balance. If
there is no credit balance for the partner, the netting program does not post.

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You can use these SAP JVA processes to clear open items and consolidate these open items
into a single new open item. Because they clear postings produced by the other SAP JVA
processes, the netting programs are run at the end of the period after cutback.

Executing Billing

At the end of an accounting period, the operating partner recovers the cost of venture
expenditures from the non-operating partners. The SAP JVA Billing program extracts relevant
billing information from the SAP JVA databases and issues invoices and supporting documents to
non-operating venture partners.

Updating Company Codes Periodically

By using the Periodic Update Company Code functions, you can:

• Change the overhead or payroll burden

• Open periods to enable posting documents in joint venture

Carrying Year End Balances Forward

This report calculates the carry forward balances of the transaction totals. This allows inception-
to-date calculations

Management of International Processes

Definition
The following are two international SAP Joint Venture Accounting (JVA) processes:

• Processing foreign currency exchange and valuation differences

• Executing house bank switching and venture bank account switching

Processing Foreign Currency Exchange and Valuation Differences

The process of assigning costs to SAP JVA partners at the end of an accounting period involves:

• Determining the value of the balances of foreign currency accounts in terms of local
currency
• Accounting for the differences (gains and losses) that have resulted from exchange rate
changes during the period
• Assigning those gains and losses to SAP JVA cost objects and ultimately to partners

Reconciling the impact of foreign currency exchange differences for the period involves three
types of process:

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 • Transferring exchange differences that have been realized (automatic
posting to CO)
• Accounting for unrealized exchange differences involving open items
• Revaluing non-open items in foreign currency balance sheet accounts

Venture Bank Account Switching

Some operating companies fund joint ventures from dedicated venture bank accounts (VBAs).
The VBA is then reimbursed by the non-operating partners’ payments in response to SAP JVA
billing and cash calls. You can create multiple VBAs for a single venture.

Use
Methods of Managing Venture Bank Accounts

SAP JVA supports two methods of managing venture bank accounts:

• Payment from a central disbursement account (CDA)

CDA is a method of managing venture bank accounts, in which all payments for venture
expenditures are made from a single central disbursement account. Non-billable payments are
also made from the CDA. The CDA is periodically reimbursed by the various VBAs, and all
payments from non-operating partners are paid directly into the VBAs. For non-billable
expenditures, the CDA is refunded from bank accounts held by the operator.

• Payment directly from VBAs

VBA is a method of managing venture bank accounts, in which all payments for venture
expenditures are made directly from the appropriate VBAs. Cash receipts from partners are also
paid directly into these VBAs. Payments for non-billable venture expenditures are made from
operator-owned bank accounts dedicated to that purpose.

Invoices with Expenses for Multiple Ventures

Payments for invoices that include costs for multiple ventures are made from the VBA belonging
to the venture with the highest expenditure. This VBA is then periodically reimbursed by the other
ventures whose expenditures were included in the invoices.

Some companies combine the two methods of managing venture accounts, by paying
expenditures for large ventures directly from VBAs and paying expenditures for smaller ventures
from a CDA.

VBA Processing

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See also:

• VBA Switching Process

• Transferring Funds Between Venture Bank Accounts
• Assigning a Bank Account
• Additional VBA Switching Attributes

Executing Venture Bank Account (VBA)

Switching
Prerequisites
Prior to processing international foreign currency exchange and valuation, your implementation
team must set up prerequisites in FI, CO and SAP Joint Venture Accounting (JVA). For specific
details, refer to the following topics:

• FI Prerequisites for International Currency Exchange and Valuation

Differences
• CO Prerequisites for International Currency Exchange and Valuation
Differences
• JVA Prerequisites for International Currency Exchange and Valuation

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
International → VBA switching → Execute VBA.

The JV Bank Account Switches screen appears.

Procedure
1. Enter a Company Code on the JV Bank Account Switches screen.
2. Complete the Selection Year and Selection Period only if you want to change the
defaulted year and period.
3. Enter the Posting date and period.
4. Enter text (if any) to be assigned to the document posted by this process in the
Document text field.
5. Select the appropriate options under the following headings.
6. Choose EXECUTE. The JV Bank Switch Document Audit report appears.

Perform Net Calculation and Two-Way Netting

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 Perform net calculation and Two-way netting are mutually exclusive alternative ways of
netting the VBA transfer postings.

If you select Perform net calculation, all the outstanding obligations between all funding
groups are netted in a single document.

Example

• Funding group FNG1 has an outstanding obligation of $100 to funding group FNG2,
FNG2 in turn has a $100 obligation to FNG1, and FNG1 has a $100 obligation to FNG3.
If you select Perform net calculation, the VBA process nets these obligations and posts a
single transfer document for $100 from the bank account for FNG1 to the account for
FNG3. By default, three documents are posted, one transfer for each obligation.
• If you select Perform net calculation, the transfer postings between bank accounts are
summarized on the report screen and no details are displayed for the documents being
processed.
• If you select Two-way netting rather than Perform net calculation, only transactions
involving the same pairs of funding groups are netted against one another. Bank account
transfers based on transactions that cannot be paired by funding groups are posted
separately.

• Funding group FNG1 and FNG2 owe each other $100. FNG1 also owes FNG3 $100 and
FNG3 owes FNG2 $100. If neither netting option is selected, four separate transfer
documents are posted.
• If you select Perform net calculation, the mutual obligations between FNG1 and FNG2
are netted to zero, and the obligation of FNG1 to FNG3 and FNG3 to FNG2 is resolved to
a single posting from FNG1 to FNG2 for $100. In effect, FNG1 pays FNG2 for FNG3’s
obligation, thus satisfying its own debt to FNG3.
• If you select Two-way netting, the obligations between FNG1 and FNG2 are still netted to
zero, because the same two funding groups are involved in both transactions. The
obligations between FNG3 and FNG1, and between FNG 3 and FNG2, are not netted
under Two-way netting. Each transaction involves a different pair of funding groups
(FNG3 to FNG1 and FNG3 to FNG2).

Post Using Ventures and Cost Object Analysis

o The two methods, Post using ventures and Cost object analysis are mutually
exclusive ways to determine the cost objects to which the VBA postings are
assigned in SAP JVA.
o If neither Post using ventures nor Cost object analysis is selected, the VBA
posting lines in the JVA document produced by this process will be assigned to

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 the corporate venture and equity group designated on the JV Company
Corporate Data screen in JVA configuration.
o If balanced ventures is selected for the JVA company on the Company Global
Parameters screen, you must ensure that VBA postings are balanced by venture
by selecting Post using ventures or Cost object analysis.

An invoice payment involving an expenditure for joint venture V1, which is assigned to funding
group FNG1, is posted on December 1 when equity group EG1 owns V1. The payment is made
from the bank account for funding group FNG2. When VBA is run at the end of December, V1 is
owned by EG2. By default, the transfer payment from the bank account for FNG1 to the account
for FNG2 is posted to the current equity group (EG2). If you select Post using equity group, the
VBA transfer is posted to the equity group in the original item (EG1).

Options

Test run If you select this option, a report screen displays the results of processing, but
no bank transfer documents are posted.

Post Using You select this option to use the joint ventures, from the original documents
Ventures involved in the bank account transfers, to determine the substitute cost object
that will receive the transfer posting in the SAP JVA document. The recovery
indicator on the substitute cost object is assigned to the posting line. If a
substitute cost object is not specified on the joint venture master, an error
appears.

Cost Object You select this option to assign the cost objects, from the original documents
Analysis involved in the bank account transfers, to the lines of the transfer posting
document in SAP JVA. The recovery indicator on the cost objects will be
assigned to the posting lines.

Post using You select this option, to post the VBA transfer to the equity group assigned to
equity group the original item that formed the basis for the transfer. By default, the VBA
transfer is posted to the current equity group, which is the equity group
assigned to the venture on the VBA document date.

Post using You select this option to post the VBA transfer using the value date entered on
value date the bank line of the original payment document.

Generate You select this option to produce an additional report, that totals cash and non-
additional cash transfers by funding group and currency, on the report screen.
report

Interest You cannot select one of the netting options at the same time as you select
Calculation interest calculation, because interest calculation is based on the original
amounts.

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Calculate You select this option to calculate interest on the obligation of one funding
interest due group to another. The calculated interest amount is included in the VBA
Switching document, and it is posted to the bank account specified through
SAP JVA configuration for automatic process JV7.

If a substitute cost object is not specified on the joint venture master, an error
message appears when VBA Switching is run in update mode.

Effective date In this field, you specify the final date, until which interest is calculated.

Elapsed days If you select Calculate interest due, you must also select this option, to enable
analysis calculation of the days for which interest will be charged.

If the value date is available on the bank line of the payment, then the value
date is used in conjunction with the effective date, to determine the number of
days for which interest is due. The value date is the first day for which interest
should be charged. The formula for calculating the interest period using the
value date is:

Elapsed days = Effective Date – Value Date + 1

A minimum of one day’s interest is always charged.

If the value date is not available on the bank line of the payment, then the
posting date of the payment is used in place of the value date, and the formula
for determining the number of days for which interest is due is:

Elapsed days = Effective Date – Posting Date + 1

Create switch You select this option to generate letters providing instructions on the bank
letters account transfers, which result from VBA switching in the SAPScript formats
that are assigned to the funding groups in SAP JVA configuration.

Letter for each You select this option to generate a separate letter for each bank branch.
branch

SAPScript In this field, you specify the SAPScript output device to which the generated
Device letter should be sent.

Net amounts in You select this option, to net amounts shown on the bank transfer requests.
switch letters

Re-running By default, the VBA switching is run once in each period, so that transfer
Venture Bank documents, posted in the first run, are not selected in a later run. You can re-
Account run the process for a period, but, to avoid reversing the results of previous
Switching runs, you must carefully select the documents for inclusion in the process.

Override event If you select this option and you do not select Test run, the system re-runs VBA
check (re-run) switching for the period and then posts documents. You should use this option
together with one of two alternative ways to select certain documents to be
included in processing available on the JV Bank Account Switches screen.

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Read data If you select this option, the switching function processes only those entries in
from VBA table the VBA table that are marked for release to processing. Another SAP JVA
process allows you to modify this table. If you select this option, the system
ignores the period and year selections on the JV Bank Account Switches
screen. All documents released for processing on the VBA table are then
included in processing regardless of period and year.

If you do not You should enter selection criteria for the documents to be included in the
select Read selection (if not use VBA table) section of the JV Bank Account Switches
data from VBA screen. In this section, you can select documents by using the following
table option criteria:

• Document type
• Reference Document number
• JV Document number

• System date

Netting Based on Cost Objects

Netting based on cost objects is a new function, designed to increase the processing flexibility in
bank switching. To perform netting based on cost objects, you must verify cost object analysis
and one of the netting options (either net calculation or two-way netting).

Since SAP JVA allows you to differentiate between the fiscal year and the calendar year, the
bank switch program will not default processing period based on the calendar. Instead, it
determines a default processing period based on the fiscal year variant assigned to the company
code that has been entered (or the company code held in the parameter id BUK). Since the
company code in parameter BUK is not always available, it is difficult to determine a default
processing period based on fiscal year. Instead, the period field will be empty, but mandatory for
the user. After you enter the period for the first time, the period will be saved in the parameter
PER.

Creating VBA Table Entries

Prerequisites
Prior to processing international foreign currency exchange and valuation, your implementation
team must set up prerequisites in FI, CO and SAP Joint Venture Accounting (JVA). For specific
details, refer to the following topics:

• FI Prerequisites for International Currency Exchange and Valuation

Differences
• CO Prerequisites for International Currency Exchange and Valuation
Differences
• JVA Prerequisites for International Currency Exchange and Valuation

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Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
International → VBA switching → Create table entries.

The Create Table Entries for VBA Switching screen appears.

Procedure
1. Enter a Company Code on the Create Table Entries for VBA Switching screen.
2. Enter the Fiscal year.
3. Enter the Posting period.
4. Select the appropriate Blocking parameters for both cash switches and non-cash
switches.
5. Select the appropriate Execution parameter, either Test mode; do not update table
entries or Update the table entries.

The JV Bank Switch Documents Table Generation Report appears.

Modifying VBA Table Entries

Prerequisites
Prior to processing international foreign currency exchange and valuation, your implementation
team must set up prerequisites in FI, CO and SAP Joint Venture Accounting (JVA). For specific
details, refer to the following topics:

• FI Prerequisites for International Currency Exchange and Valuation

Differences
• CO Prerequisites for International Currency Exchange and Valuation
Differences
• JVA Prerequisites for International Currency Exchange and Valuation

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
International → VBA switching → Modify table entries.

The Bank Acct Switch - Maintain Data screen appears.

Procedure
1. On the Bank Acct Switch - Maintain Data screen, enter a company code in the Enter
company code dialog box.

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 2. Select the SAP JVA documents you wish to block or release from processing, by clicking
on the indicator in the far-left column of the table. An arrow appears next to the selected
row or rows.
3. To block documents, select the Blocked marked lines function. To release the
documents, select the Release marked lines function. A green indicator confirms the
document is released from blocking and a red indicator confirms the document is
blocked.

This Ind field contains a number representing a VBA indicator. For example, the number a 2
indicates the document is blocked for bank account switching, and a number 4 indicates the
document is relevant (released from blocking) for bank account switching. For a complete list of
the VBA indicators, use the pull-down menu to view the codes.

Executing House Bank Switching

Prerequisites
Prior to processing international foreign currency exchange and valuation, your implementation
team must set up prerequisites in FI, CO and SAP Joint Venture Accounting (JVA). For specific
details, refer to the following topics:

• FI Prerequisites for International Currency Exchange and Valuation

Differences
• CO Prerequisites for International Currency Exchange and Valuation
Differences
• JVA Prerequisites for International Currency Exchange and Valuation

See also:

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
International → Housebank switching.

The House Bank Switching screen appears.

Procedure
1. Enter a Company code on the House Bank Switching screen.

2. Enter a Payment date.

3. Enter a Vendor (or range of vendors).

4. Select Processing options from the following:

Include blank house bank items

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 Batch process (update)

Keep batch input

List control report

5. Choose EXECUTE. The House Bank Detail Report appears.

Processing Realized Exchange Differences

Prerequisites
Prior to processing international foreign currency exchange and valuation, your implementation
team must set up prerequisites in FI, CO and SAP Joint Venture Accounting (JVA). For specific
details, refer to the following topics:

• FI Prerequisites for International Currency Exchange and Valuation

Differences
• CO Prerequisites for International Currency Exchange and Valuation
Differences
• JVA Prerequisites for International Currency Exchange and Valuation

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
International → For. currency valu. → Realized exchg.diff.

The Transfer automatic postings to CO screen appears.

Procedure
1. Enter a Company Code on the Transfer automatic postings to CO screen.
2. Enter a Period.
3. Enter a Fiscal Year.
4. Select the appropriate options under the following headings:

Processing options

Execute options

5. Choose EXECUTE. The Transfer automatic postings to CO report appears.

Processing Unrealized Exchange Differences

Prerequisites

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Prior to processing international foreign currency exchange and valuation, your implementation
team must set up prerequisites in FI, CO and SAP Joint Venture Accounting (JVA). For specific
details, refer to the following topics:

• FI Prerequisites for International Currency Exchange and Valuation

Differences
• CO Prerequisites for International Currency Exchange and Valuation
Differences
• JVA Prerequisites for International Currency Exchange and Valuation

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
International → For. currency valu. → Unreal. exchg. diff.

The Unrealized exchange differences screen appears.

Procedure
1. Enter a Company Code on the Unrealized exchange differences screen.
2. Enter a Posting Period.
3. Enter a Fiscal posting year.
4. Enter a Reversal period.
5. Enter a Fiscal reversal posting year.
6. Choose EXECUTE. The Unrealized exchange differences report appears.

Processing Non-Open Unrealized Exchange

Differences
Prerequisites
Prior to processing international foreign currency exchange and valuation, your implementation
team must set up prerequisites in FI, CO and SAP Joint Venture Accounting (JVA). For specific
details, refer to the following topics:

• FI Prerequisites for International Currency Exchange and Valuation

Differences
• CO Prerequisites for International Currency Exchange and Valuation
Differences
• JVA Prerequisites for International Currency Exchange and Valuation

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
International → For. currency valu. → Non-open unreal. exch.

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The Valuation of foreign curr. balances of GL accounts at a posting period screen appears.

Procedure
1. Enter a Company Code on the Valuation of foreign curr. balances of GL accounts at a posting
period screen.

2. Enter the Company code currency valuation method.

3. Select EXECUTE. The Batch input session RGJNOUXD report appears.

Processing Goods Receipt Expense Orders

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
International → For. currency valu. → GR Expense orders.

The Valuation of foreign currency PO’s assigned to an account screen appears.

Procedure
1. Enter the Purchasing document (or range of documents) on the Valuation of foreign currency
PO’s assigned to an account screen.

2. Enter a Company Code on the Valuation of the G/L Accts Managed in FC at the Key Date
DD.MM.YY screen.

3. Select Batch input requested.

4. Enter the Input tax code 0%. Press F4 to view the options.

5. Choose EXECUTE. The Valuation of foreign currency PO’s assigned to an account, the LIST
OF POSTINGS CARRIED OUT IN BATCHINPUT report appears.

Processing Goods Receipt Inventory Orders

Prerequisites
Menu Path

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On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
International → For. currency valu. → GR Inventory orders.

The GR/IR Clearing Accounts and Display Acquisition Tax screen appears.

Procedure
1. Enter the G/L account (or range of accounts) on the GR/IR Clearing Accounts and
Display Acquisition Tax screen.
2. Enter the Company code.
3. Choose EXECUTE. The Analyze GR/IR Clearing Accounts and Display Acquisition Tax
screen appears.

Running an Advance Tax Report

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
International → Advance tax report.

The Advance Return for Tax on Sales/Purchases screen appears.

Procedure
1. Enter the Company code (or range of company codes) on the Advance Return for Tax on
Sales/Purchases screen.

2. Enter the Fiscal year.

3. Enter the Posting date (or range of posting dates).

4. Select the appropriate options under the following headings:

Further selections

Tax payable posting

Output control

Output lists

Postings parameters

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5. Choose EXECUTE. The Sales tax advance return report appears.

Execution of CO Allocations
Definition
SAP Joint Venture Accounting (JVA) enables you to allocate costs, which were originally booked
to CO cost objects, to other objects. The following types of allocations are available in SAP JVA:

• Assessments

When you execute an assessment, the expenses booked to various cost elements during the
period are aggregated under a special secondary cost element, specified on the assessment
segment. The aggregate amount is booked to each receiving cost object.

• Distributions

When you execute a distribution, the expenses booked to various cost elements during the period
are directly allocated, from the sending cost centers to which the expenses were originally
booked, to receiving cost objects by using the cost element of the original posting. Distributions
do not make use of the special secondary cost elements that are used by assessments.

• Settlements

A settlement consists of a final allocation of costs from orders or work breakdown structure
(WBS) elements to cost centers, projects, fixed assets, general ledger accounts, networks,
materials, sales orders, or cost objects defined in the settlement rule for the sender.

Use
Both assessments and distributions consist of allocations of costs booked to CO primary or
secondary cost elements, and cost centers from the sending cost centers to receiving cost
objects (orders, cost centers, WBS elements, or cost objects). The relationships between sending
cost centers and the receiving cost objects are defined in cycle or segment hierarchies.

Segments are groups of sending cost centers and receiving cost objects. During execution of the
assessment or distribution, the costs collected in the sending cost centers are allocated to the
receiving cost centers. The costs are allocated from all the sending cost centers according to the
assessment or distribution sender rule, and the costs are processed by all the receiving cost
centers according to the assessment or distribution receiver rule for tracing factors. The need to
use a different rule or different tracing factors for some senders or receivers, indicates that you
should set up a separate segment. During execution of the allocation, the segments are
processed sequentially.

Cycles are groups of segments. You can create different cycles for planned and actual costs. In
addition, you can define cycles to be executed repeatedly. Cycles are valid for a period of time,
and only postings made within that time period are processed by the allocation using the cycle.

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Executing CO Allocations: Prerequisites
Purpose
The configuration and processing screens in SAP Joint Venture Accounting (JVA) for CO
allocations are for joint venture expense processing. Alternatively, you may use standard CO
functions to set up and execute allocations.

Prerequisites
If you want to execute allocations in SAP JVA, you should define the related allocation methods
and customizing (assessment cycles, distribution cycles, and settlement customizing) in SAP
JVA, so that the system can interpret them properly when you execute allocations.

Before configuring allocations immediately after the client copy, you should run
the RK811XST report. This report builds the control sets for new internal
business activities used in allocations.

To process CO allocations in SAP JVA, you must first create the following prerequisites in FI and
CO:

• In FI, you create the general ledger accounts, to which joint venture expenses are
booked.
• In CO, you must first set up the cost objects that will be used as senders and receivers.
When you set these objects up, you must also assign joint venture information to them to
ensure that the expenses you book to the objects are passed through to SAP JVA.
• To enable specific types of CO allocation processing in SAP JVA, you must set up certain
special objects, particularly cost elements in CO. For assessments, you should define a
secondary cost element of type 42 in CO. You can use this to post the credit entries to
the sending cost centers and debit entries to the receiving cost objects of assessments.
For settlements, you should create a secondary cost element of type 21 internal
settlement, to be assigned in the settlement structure.

The Recovery Indicator (RI) Manipulation Rule

The RI manipulation rule allows you to indicate how to determine the RIs for the sender and
receiver records resulting from allocations. The two available screens for defining manipulation
rules for RIs for allocations are the Joint Venture: Manipulation Rules for Recovery Indicator
screen and the Manipulation Rule Detail screen.

After you define the RI manipulation rules on these two screens, you can assign them to the
allocations (assessments, distributions, and settlements) as you set them up. The rule you assign
to a particular allocation governs the determination of the RIs for the postings that result from
execution of the allocation.

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On the Joint Venture: Manipulation Rules for Recovery Indicator screen, to define different rules
for your company’s controlling area you do the following:

• Enter the CO controlling area for your company in the COAr field.

• Enter the name for the manipulation rule in the Mrul field.

• Enter the description of the rule in the Manipulation Rule Description field.

• Enter the number in the M-Derive field for the default method by which the RIs for the allocation
are derived, when the RI of the sending record is not handled by the MRULE detailed settings.
Enter one of the three numbers:

1. Transfer RI from sender to receiver record

2. Derive RI from receiver master file

3. Derive RI from cost element

• Enter the letter in the Msg-Type field for the type of message to be produced when the RI of the
sending record is not handled by the MRULE detailed settings, and the default settings are used
instead. Enter one of the three letters:

E error - no posting performed

N no message - pass through the RI from the sending record - posting was performed

W warning message - pass through the RI from the sending record - posting was
performed

Menu Path

To define RI manipulation rules (that can be assigned to allocations to govern RI determination

for postings produced by the allocation, follow this menu path in the IMG:

On the Display structure menu, choose Joint venture accounting → Processing → CO Processing
→ RI Manipulation Rule.

When you have defined a RI manipulation rule, you access the Manipulation Rule Detail screen
to define the detailed information for the rule, by selecting the newly defined rule and then
selecting Recovery Indicator Relations. You can define the detailed information for the
manipulation rule on this screen, by entering the following information:

• You enter the RI of the record from the sending cost object that is to be allocated in the Send D.
RI field

This RI screens records for application of the remainder of the manipulation rule.

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• You enter the RI to be assigned to the clearing record posted to the sending cost object by the
allocation in the SndClrRI field

• You enter the RI to be assigned to the debit record posted to the receiving cost object by the
allocation in the RecRvryInd field

• You enter the number for the method by which the RI, for the debit record posted to the
receiving cost object by the allocation, is derived in the M-Derive field, if no REcRvryInd was
specified. Enter one of the three numbers.

1. Transfer RI from sender to receiver record

2. Derive RI from receiver master file

3. Derive RI from cost element

You can enter either code in the receiver (RI) field or the master record derived
(Mder) field, but not in both fields.

Executing Assessments
Prerequisites

Executing CO Allocations: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → CO
processing → Assessment.

The Set controlling area dialog box appears.

Procedure
1. Enter the Controlling area code on the Set Controlling Area dialog box.

2. Choose Continue. The Execute JV actual assessment: Initial Screen appears.

3. Enter the Period.

4. Enter the Fiscal year.

5. Check the appropriate process indicator (Background processing, Test run, Detailed lists).

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6. Enter the Cycle by clicking on the pull-down arrow. The Start.date, and Text fields will be
completed automatically.

7. Choose the Execute function.

8. If Test run and Detailed lists are selected, choose the following functions for additional
information:

• Segments
• Senders
• Receivers
• Journals

If Background processing is selected, the Background Processing: Job Parameters screen will
appear. Enter a Job name, Planned start Date and Time. Choose Confirm. A system message
appears.

Executing Distributions
Prerequisites

Executing CO Allocations: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → CO
processing → Distribution.

The Set controlling area dialog box appears.

Procedure
To execute distributions, proceed as follows:

1. Enter the Controlling area code on the Set controlling area dialog box.

2. Choose Continue. The Execute JV actual distribution: Initial Screen appears.

3. Enter the Period.

4. Enter the Fiscal year.

5. Check the appropriate process indicator (Background processing, Test run, Detailed lists).

6. Enter the Cycle by clicking on the pull-down arrow. The Start.date and Text fields will be
completed automatically.

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7. Choose the Execute function.

8. If Test run and Detailed lists are selected. Choose the following functions for additional
information:

• Segments

• Senders

• Receivers

• Journals

If Background processing is selected, the Background Processing: Job Parameters screen

appears. Enter a Job name, Planned start Date and Time. Choose Confirm. A system message
appears.

Executing Order Settlement/Individual

Processing
Prerequisites

Executing CO Allocations: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → CO
processing → Order Settlement → Indiv. processing.

The Set controlling area dialog box appears.

Procedure
1. Enter the Controlling area code on the Set controlling area dialog box. The Actual
Settlement: Order dialog box appears.
2. Enter the Order number.
3. Enter the Settlement Period.
4. Enter the Fiscal year.

You can change the Processing type default. Processing type is important because it
determines whether settlement can be run before or after cutback. For example,
Processing type determines whether the expense is settled before cutback and the costs
to be capitalized are settled after cutback. For further discussion of the various
Processing types, press the F1 and F4 keys.

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 5. Select a Processing option.

Choose Execute. The Actual Settlement: Detailed List appears.

Executing Order Settlement/Collective

Processing
Prerequisites

Executing CO Allocations: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → CO
processing → Order settlement → Collective proc.

The Set controlling area dialog box appears.

Procedure
1. Enter the Controlling area code on the Set controlling area dialog box. The Actual
Settlement: Orders screen appears.
2. Enter the Settlement period.
3. Enter the Fiscal year.

You can change the Processing type default. Processing type is important because it
determines whether settlement can be run before or after cutback (for example, whether
the expense is settled before cutback and the costs to be capitalized are settled after
cutback). For further discussion of the various Processing types press the F1 and F4
keys.

4. Select the appropriate Processing option (Background processing, Test run, Detailed
lists, or Check trans data).
5. Choose the Execute function.
6. If the process you selected is Test run or Detailed list, the Actual Settlement: Basic List
appears.
7. If Background processing is selected, the Background Processing: Job Parameters
screen appears. Enter a Job name, Planned start Date and Time. Choose Confirm. A
system message appears.

Executing Order Settlement/Line Item

Distribution

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Prerequisites

Executing CO Allocations: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → CO
processing → Order Settlement → Line item distrbtn

The Set controlling area dialog box appears.

Procedure
1. Enter the Controlling area code on the Set controlling area dialog box.

2. Choose Continue. The Order: Line Item Apportionment for Settlement screen appears.

3. Enter the Order number.

4. Choose Enter. A Basic list appears.

To continue through final settlement choose the Final settlmt. function and complete the
appropriate fields on the Maintain Settlement Rule: List.

Executing Project Settlement/Individual

Processing
Prerequisites

Executing CO Allocations: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → CO
processing → Project Settlement → Indiv. processing.

The Set controlling area dialog box appears.

Procedure
1. Enter the Controlling area code on the Set controlling area dialog box.

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2. Choose Continue. The Actual Settlement: Project/WBS element/network screen appears.

3. Enter the Project definition, or WBS element, or Network.

4. Enter the Settlement period.

5. Enter the Fiscal year.

6. Select the appropriate Process option (Test run, Detail list, or Check trans. data).

7. Choose the Execute function. The Actual Settlement: Basic List appears.

Executing Project Settlement/Collective

Processing
Prerequisites

Executing CO Allocations: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → CO
processing → Project Settlement → Collective proc.

The Set controlling area dialog box appears.

Procedure
1. Enter the Controlling area code on the Set controlling area dialog box.

2. Choose Continue. The Actual Settlement: Projects/WBS/networks screen appears.

3. Enter the Selection variant.

4. Enter the Settlement period.

5. Enter the Fiscal year.

6. Check the appropriate Processing option (Background processing, Test run, Detail list, or
Check trans. data).

7. Choose the Execute function.

If the process you selected is Test run or Detailed list, the Actual Settlement: Basic List will be
displayed.

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If Background processing is selected, the Background Processing: Job Parameters screen
appears. Enter a Job name, Planned start Date and Time. Choose Confirm.

Executing Project Settlement/Line Item

Distribution
Prerequisites

Executing CO Allocations: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → CO
processing → Project Settlement → Line item distbtn.

The Set controlling area dialog box appears.

Procedure
1. Enter the Controlling area code on the Set controlling area dialog box.

2. Choose Continue. The Display Project Settlement Line Items screen appears.

3. Enter the work breakdown structure code in the WBS element field.

4. Choose Enter. A Basic list appears.

To continue through final settlement, choose the Final settlmt. function and complete the
appropriate fields on the Maintain Settlement Rule: List.

Cost Calculations
Purpose
Many joint venture operators apply overhead charges, some of which must be calculated, to
cover the indirect costs incurred in operating ventures. After these overhead charges are
determined by the SAP Joint Venture Accounting (JVA) Cost Calculations process, the SAP JVA
Cutback and Billing processes assign them to the appropriate venture partners.

Process Flow

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During processing, SAP JVA Cost Calculations collects costs that have a billable recovery
indicator (RI), associated with joint ventures within the company for which the process is being
executed.

The process sorts these billable costs for the joint ventures by overhead type, such as
Construction, Combined Fixed Rate Drilling, or Percentage Producing. SAP JVA Cost
Calculations then applies the rule for calculating overhead charges, specified for each overhead
type at the joint operating agreement level, to the appropriate joint venture costs.

In the final step of processing, SAP JVA Cost Calculations posts overhead costs to appropriate
SAP FI accounts and SAP CO cost objects. Different cost calculations are available in SAP JVA
for the three different regions supported by the system.

Example
The cost calculations for the United States region consist of the following:

• Payroll Burden Clearing

• Major Construction Overhead (MCO)

• Catastrophe Overhead

• Combined Fixed Rate (CFR) Drilling

• Combined Fixed Rate Producing

• Percentage Basis Overhead

Overhead is only applied to the billable costs of company-operated joint ventures for companies
in the United States region.

Calculating Parent Company Overhead

Prerequisites
SAP FI Prerequisites

The SAP JVA cost calculations process derives its source cost data from the joint venture
summary ledger. This cost data is originally booked to SAP FI accounts. Cost calculations also
posts the results of its processing to SAP FI accounts.

You should create the following list of accounts in SAP FI to support cost calculations:

• Accounts to receive the expense and offset entries that result from cost calculations

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• Sets of accounts to be used at the company, joint operating agreement (JOA), or work
breakdown structure (WBS) level to exclude expenses from cost calculations processing of
overheads

• Balance sheet accounts to receive the offset entries of cost calculations processing

• Set of accounts for payroll burden

SAP JVA Configuration Prerequisites

In addition to the SAP FI prerequisites, you should take the following configuration steps to
enable the processing of cost calculations:

• Define sets of exclusion accounts that can be excluded from overhead cost calculations

• Define accounts to which postings created by calculations of the various overhead costs will be
posted through SAP JVA configuration automatic postings

• Set up SAP JVA master objects for cost calculations

• Establish prerequisites for the SAP JVA cost calculations in CO

• Assign rules, exclusion sets, and WBS elements for cost calculations at the JOA and
joint venture level during company set-up in SAP JVA

Exclusion Accounts You can define sets of existing FI accounts in SAP JVA configuration
for Cost Calculations that can be selectively excluded from overhead calculations at the
following levels for:

• Your company
• Specific JOAs
• Specific project/WBSs

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting →

Environment → Sets → Create.

To define sets of exclusion accounts for cost calculations, on the

Create Set: Initial screen, enter the following information:

• Name for the set of exclusion accounts you are defining in the
Set ID field

• JVTO1 in the Table field (All cost calculation exclusion sets are

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 assigned to table JVTO1)

• Select Basic set or Single set in the Set Type area

When you have made these entries on the Create Set: Initial screen,
select Basic Entries. When the Create Set: Field Name dialog box
appears, enter RACCT in the Field Name field and select Continue to
display the Create Set: Basic Entries screen. On this screen, make the
following entries:

• Account number of the single account or the first account in a

series that are to be included in this set of accounts in the No.
From Value field (If only one account is to be specified for the
set, enter the account number in this field.)

Account number of the last account in a series that are to be included

in the To Value field

Accounts and SAP JVA has automatic posting processes for every overhead type.
Automatic Postings These processes specify the general ledger accounts to which
amounts are posted in FI. The account to which cost calculation
expenses are booked must be a cost element. The offset account for
an overhead type may be a cost element or a balance sheet account.

Master Objects for You must set up the following types of master objects to run SAP JVA
Cost Calculations cost calculations:

• Cost Object Types

• Cost Calculations Rules
• Special Cost Elements

Menu Path

On the Display structure menu, choose Joint venture accounting →

Master Data → Cost Object Types.

You can access all the SAP JVA cost calculations objects from the
Processing pull-down menu.

Prerequisites for SAP The following is a list of the cost objects that your implementation team
JVA Cost should set up in CO to support SAP JVA cost calculations:
Calculations in CO
• Cost elements corresponding to FI accounts to receive either
expense or offset entries resulting from Cost Calculations
processing
• Projects and WBSs for authorizations for expenditures (AFEs),
cost centers, and orders connected to joint ventures and JV
overhead types via JVA cost object types
• Hierarchy of WBSs
• Drilling statistical ratio and producing statistical ratio for each
well depth that will carry a different overhead rate

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 • Special drilling cost elements

Each cost object (set up in CO) can be connected to only one SAP JVA
cost object type and overhead type, and each can only collect
overhead costs for that single overhead type for the venture to which it
is attached.

Menu Path

To calculate parent company overhead, follow this menu path:

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → Cost
calculations →Parent company ovrhd.

The Joint Venture Cost Calculations - International screen appears.

Procedure
1. Enter the Company Code on the Joint Venture Cost Calculations - International screen.

2. Enter the Year.

3. Enter the Period.

4. Select the appropriate processing option (Update, Keep Batch Input).

5. Choose the Execute function to view the Overhead Expense Account and Overhead Offset
Account.

Calculating Overheads - General

Prerequisites
SAP FI Prerequisites

The SAP JVA cost calculations process derives its source cost data from the joint venture
summary ledger. This cost data is originally booked to SAP FI accounts. Cost calculations also
posts the results of its processing to SAP FI accounts.

You should create the following list of accounts in SAP FI to support cost calculations:

• Accounts to receive the expense and offset entries that result from cost calculations

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• Sets of accounts to be used at the company, joint operating agreement (JOA), or work
breakdown structure (WBS) level to exclude expenses from cost calculations processing of
overheads

• Balance sheet accounts to receive the offset entries of cost calculations processing

• Set of accounts for payroll burden

SAP JVA Configuration Prerequisites

In addition to the SAP FI prerequisites, you should take the following configuration steps to
enable the processing of cost calculations:

• Define sets of exclusion accounts that can be excluded from overhead cost calculations

• Define accounts to which postings created by calculations of the various overhead costs will be
posted through SAP JVA configuration automatic postings

• Set up SAP JVA master objects for cost calculations

• Establish prerequisites for the SAP JVA cost calculations in CO

• Assign rules, exclusion sets, and WBS elements for cost calculations at the JOA and
joint venture level during company set-up in SAP JVA.

Exclusion Accounts You can define sets of existing FI accounts in SAP JVA configuration
for Cost Calculations that can be selectively excluded from overhead calculations at the
following levels for:

• Your company
• Specific JOAs
• Specific project/WBSs

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting →

Environment → Sets → Create.

To define sets of exclusion accounts for cost calculations, on the

Create Set: Initial screen, enter the following information:

• Name for the set of exclusion accounts you are defining in the
Set ID field
• JVTO1 in the Table field (All cost calculation exclusion sets are
assigned to table JVTO1)
• Select Basic set or Single set in the Set Type area

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 When you have made these entries on the Create Set: Initial screen,
select Basic Entries. When the Create Set: Field Name dialog box
appears, enter RACCT in the Field Name field and select Continue to
display the Create Set: Basic Entries screen. On this screen, make the
following entries:

• Account number of the single account or the first account in a

series that are to be included in this set of accounts in the No.
From Value field (If only one account is to be specified for the
set, enter the account number in this field.)

• Account number of the last account in a series that are to be

included in the To Value field

Accounts and SAP JVA has automatic posting processes for every overhead type.
Automatic Postings These processes specify the general ledger accounts to which
amounts are posted in FI. The account to which cost calculation
expenses are booked must be a cost element. The offset account for
an overhead type may be a cost element or a balance sheet account.

Master Objects for You must set up the following types of master objects to run SAP JVA
Cost Calculations cost calculations:

• Cost Object Types

• Cost Calculations Rules
• Special Cost Elements

Menu Path

On the Display structure menu, choose Joint venture accounting →

Master Data → Cost Object Types.

You can access all the SAP JVA cost calculations objects from the
Processing pull-down menu.

Prerequisites for SAP The following is a list of the cost objects that your implementation team
JVA Cost should set up in CO to support SAP JVA cost calculations:
Calculations in CO
• Cost elements corresponding to FI accounts to receive either
expense or offset entries resulting from Cost Calculations
processing
• Projects and WBSs for authorizations for expenditures (AFEs),
cost centers, and orders connected to joint ventures and JV
overhead types via JVA cost object types
• Hierarchy of WBSs
• Drilling statistical ratio and producing statistical ratio for each
well depth that will carry a different overhead rate
• Special drilling cost elements

Each cost object (set up in CO) can be connected to only one SAP JVA

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 cost object type and overhead type, and each can only collect
overhead costs for that single overhead type for the venture to which it
is attached.

Menu Path

To calculate overheads, follow this menu path:

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → Cost
calculations →Overheads - general.

The Joint Venture Overhead Calculations screen appears.

Procedure
1. Enter the Company Code on the Joint Venture Overhead Calculations screen.

2. Enter the Year.

3. Enter the Period.

4. Select the appropriate processing option (Update, Keep Batch Input, Direct Input w/o Batch
Input).

5. Choose the Execute function to view the overhead data.

Calculating Payroll Burden

Prerequisites
SAP FI Prerequisites

The SAP Joint Venture Accounting (JVA) cost calculations process derives its source cost data
from the joint venture summary ledger. This cost data is originally booked to SAP FI accounts.
Cost calculations also posts the results of its processing to SAP FI accounts.

You should create the following list of accounts in SAP FI to support cost calculations:

• Accounts to receive the expense and offset entries that result from cost calculations

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• Sets of accounts to be used at the company, joint operating agreement (JOA), or work
breakdown structure (WBS) level to exclude expenses from cost calculations processing of
overheads

• Balance sheet accounts to receive the offset entries of cost calculations processing

• Set of accounts for payroll burden

SAP JVA Configuration Prerequisites

You should also take the following configuration steps to enable the processing of cost
calculations:

• Define sets of exclusion accounts that can be excluded from overhead cost calculations

• Define accounts to which postings created by calculations of the various overhead costs will be
posted through SAP JVA configuration automatic postings

• Set up SAP JVA master objects for cost calculations

• Establish prerequisites for the SAP JVA cost calculations in CO

• Assign rules, exclusion sets, and WBS elements for cost calculations at the JOA and
joint venture level during company set-up in SAP JVA

Exclusion Accounts You can define sets of existing FI accounts in SAP JVA configuration
for Cost Calculations that can be selectively excluded from overhead calculations at the
following levels for:

• Your company
• Specific JOAs
• Specific project/WBSs

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting →

Environment → Sets → Create.

To define sets of exclusion accounts for cost calculations, on the

Create Set: Initial screen, enter the following information:

• Name for the set of exclusion accounts you are defining in the
Set ID field
• JVTO1 in the Table field (All cost calculation exclusion sets are
assigned to table JVTO1)
• Select Basic set or Single set in the Set Type area

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 When you have made these entries on the Create Set: Initial screen,
select Basic Entries. When the Create Set: Field Name dialog box
appears, enter RACCT in the Field Name field and select Continue to
display the Create Set: Basic Entries screen. On this screen, make the
following entries:

• Account number of the single account or the first account in a

series that are to be included in this set of accounts in the No.
From Value field (If only one account is to be specified for the
set, enter the account number in this field.)

• Account number of the last account in a series that are to be

included in the To Value field

Accounts and SAP JVA has automatic posting processes for every overhead type.
Automatic Postings These processes specify the general ledger accounts to which
amounts are posted in FI. The account to which cost calculation
expenses are booked must be a cost element. The offset account for
an overhead type may be a cost element or a balance sheet account.

Master Objects for You must set up the following types of master objects to run SAP JVA
Cost Calculations cost calculations:

• Cost Object Types

• Cost Calculations Rules
• Special Cost Elements

Menu Path

On the Display structure menu, choose Joint venture accounting →

Master Data → Cost Object Types.

You can access all the SAP JVA cost calculations objects from the
Processing pull-down menu.

Prerequisites for SAP The following is a list of the cost objects that your implementation team
JVA Cost should set up in CO to support SAP JVA cost calculations:
Calculations in CO
• Cost elements corresponding to FI accounts to receive either
expense or offset entries resulting from Cost Calculations
processing
• Projects and WBSs for authorizations for expenditures (AFEs),
cost centers, and orders connected to joint ventures and JV
overhead types via JVA cost object types
• Hierarchy of WBSs
• Drilling statistical ratio and producing statistical ratio for each
well depth that will carry a different overhead rate
• Special drilling cost elements

Each cost object (set up in CO) can be connected to only one SAP JVA

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 cost object type and overhead type, and each can only collect
overhead costs for that single overhead type for the venture to which it
is attached.

Menu Path

To calculate payroll burden, follow this menu path:

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → Cost
calculations → Payroll burden.

The Joint Venture Payroll Burden Clearing screen appears.

Procedure
1. Enter the Company Code on the Joint Venture Payroll Burden Clearing screen.

2. Enter the Year.

3. Enter the Period.

4. Select the appropriate processing option (Update, Keep Batch Input, Direct Input w/o Batch
Input).

5. Choose the Execute function to view the Payroll Burden Clearing data.

Calculating Overhead Escalation/Reduction

Rate
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → Cost
calculations → Auto. o/h escalation

The Overhead Rate Escalation/Reduction Calculation screen appears.

Procedure
1. Enter the Company Code on the Overhead Rate Escalation/Reduction Calculation screen.

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2. Completing the Percentage Change field is optional.

Enter the percentage, by which the rates for the following overhead cost calculation types for a
JOA within the company, are increased or decreased:

• Combined Fixed Rate (CFR) Drilling Rate

• CFR Producing Rate

• Flat Rate

To decrease rates, enter a number with a trailing minus sign.

3. Select the processing option (Update).

4. Choose the Execute function to view the Payroll Burden Clearing data.

Processing the Overhead Detail Report

Prerequisites
SAP FI Prerequisites

The SAP JVA cost calculations process derives its source cost data from the joint venture
summary ledger. This cost data is originally booked to SAP FI accounts. Cost calculations also
posts the results of its processing to SAP FI accounts.

You should create the following list of accounts in SAP FI to support cost calculations:

• Accounts to receive the expense and offset entries that result from cost calculations

• Sets of accounts to be used at the company, joint operating agreement (JOA), or work
breakdown structure (WBS) level to exclude expenses from cost calculations processing of
overheads

• Balance sheet accounts to receive the offset entries of cost calculations processing

• Set of accounts for payroll burden

SAP JVA Configuration Prerequisites

In addition to the SAP FI prerequisites, you should take the following configuration steps to
enable the processing of cost calculations:

• Define sets of exclusion accounts that can be excluded from overhead cost calculations

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• Define accounts to which postings created by calculations of the various overhead costs will be
posted through SAP JVA configuration automatic postings

• Set up SAP JVA master objects for cost calculations

• Establish prerequisites for the SAP JVA cost calculations in CO

• Assign rules, exclusion sets, and WBS elements for cost calculations at the JOA and
joint venture level during company set-up in SAP JVA

Exclusion Accounts You can define sets of existing FI accounts in SAP JVA configuration
for Cost Calculations that can be selectively excluded from overhead calculations at the
following levels for:

• Your company
• Specific JOAs
• Specific project/WBSs

Menu Path

To define sets of accounts that can be selectively excluded from cost

calculation processing, follow this menu path:

On the SAP Easy Access menu, choose Joint venture accounting →

Environment → Sets → Create.

To define sets of exclusion accounts for cost calculations, on the

Create Set: Initial screen, enter the following information:

• Name for the set of exclusion accounts you are defining in the
Set ID field
• JVTO1 in the Table field (All cost calculation exclusion sets are
assigned to table JVTO1)
• Select Basic set or Single set in the Set Type area

When you have made these entries on the Create Set: Initial screen,
select Basic Entries. When the Create Set: Field Name dialog box
appears, enter RACCT in the Field Name field and select Continue to
display the Create Set: Basic Entries screen. On this screen, make the
following entries:

• Account number of the single account or the first account in a

series that are to be included in this set of accounts in the No.
From Value field (If only one account is to be specified for the
set, enter the account number in this field.)

• Account number of the last account in a series that are to be

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 included in the To Value field

Accounts and SAP JVA has automatic posting processes for every overhead type.
Automatic Postings These processes specify the general ledger accounts to which
amounts are posted in FI. The account to which cost calculation
expenses are booked must be a cost element. The offset account for
an overhead type may be a cost element or a balance sheet account.

Master Objects for You must set up the following types of master objects to run SAP JVA
Cost Calculations cost calculations:

• Cost Object Types

• Cost Calculations Rules
• Special Cost Elements

Menu Path

To set up the SAP JVA master data objects in the IMG to enable the
cost calculations follow this menu path:

On the Display structure menu, choose Joint venture accounting →

Master Data → Cost Object Types.

You can access all the SAP JVA cost calculations objects from the
Processing pull-down menu.

Prerequisites for SAP The following is a list of the cost objects that your implementation team
JVA Cost should set up in CO to support SAP JVA cost calculations:
Calculations in CO
• Cost elements corresponding to FI accounts to receive either
expense or offset entries resulting from Cost Calculations
processing
• Projects and WBSs for authorizations for expenditures (AFEs),
cost centers, and orders connected to joint ventures and JV
overhead types via JVA cost object types
• Hierarchy of WBSs
• Drilling statistical ratio and producing statistical ratio for each
well depth that will carry a different overhead rate
• Special drilling cost elements

Each cost object (set up in CO) can be connected to only one SAP JVA
cost object type and overhead type, and each can only collect
overhead costs for that single overhead type for the venture to which it
is attached.

Menu Path

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On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → Cost
calculations →Overhead detail rpt.

The Joint Venture Overhead Detail screen appears.

Procedure
1. Enter the Company code on the Joint Venture Overhead Detail screen.

2. Enter the Year.

3. Enter the Period.

4. Choose the Execute function to view the Joint Venture Overhead Detail data.

Cutback
Purpose
A joint venture operating partner carries all operating costs throughout the accounting period. At
the end of the accounting period, the operator‘s expenditures are shared by the non-operating
partners and the operator, according to their equity shares. This process is called cutback.

The SAP Joint Venture Accounting System (JVA) cutback process assigns expenses to partners.
Cutback accomplishes the following three tasks:

• Prepares partner expense data for the summary invoice

• Posts accounts receivable entries for each partner’s share of venture expenses (including
posting inter-company expenses directly to associated companies’ books)

• Cuts back gross to net expenditure on the operator’s own books

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Process Flow
Cutback Processing

Cutback extracts all costs with a billable recovery indicator for each joint venture and equity group
currency combination from the joint venture summary ledger. Depending on the decisions made
when SAP JVA is configured, there may be a number of different types of billable recovery
indicators (BI for normal billable and AD for billable adjustment).

Cutback Applies Posting Rules to Billable Expenses

Cutback processes these billable transactions for each joint venture, applying the posting rules
defined during configuration. As it processes these transactions and assigns costs to partners in
the joint venture, cutback posts debit entries for these assigned costs to the various receivable
accounts for the partners that are stored in SAP’s Financial Accounting System. As part of this
processing, cutback also posts offsetting entries to either user-defined cutback accounts or, in the

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absence of user-defined accounts, to the same accounts to which the original expenditures were
posted.

Cutback Provides Input Data to the SAP JVA Billing Process

When cutback has completed running for the period, the SAP JVA billing process takes the
receivable documents produced by cutback as one source of information for its processing.
Cutback also posts the operating for venture expenditures to the joint venture billing ledger, so
that all expenses associated with the venture can be included in reports to the partners.

Non-Operated On-Billing Ventures

Usually cutback is run for ventures for which the company is the operator, but cutback can also
assign expenses to partners for non-operated on-billing ventures. In a non-operated on-billing
venture, the company for which cutback is being run has sold portions of its non-operating
partnership share of the venture to others. When cutback is run for such ventures, expenses that
the venture operator assigned to the company are apportioned to these partners in the
company’s share, based on their equity holding.

Result
Cutback posts its output directly to other SAP JVA ledgers or to other system ledgers, such as
SAP FI.

Identifying Suspended Projects and Equity

Groups
Prerequisites
To process cutback in SAP, you must configure the following accounts:

• Fixed accounts and objects in SAP FI

• Posting rules for cutback
• Cutback accounts for accounts that cannot post expenses directly

You must also configure accounts and objects in SAP FI and SAP JVA, for the following
conditions, to enable cutback to post entries:

• Special Partnership Arrangements

When your implementation team configures cutback for your company to process expenditures
for typical ventures, it should also set up objects to enable cutback to process postings for the
following special partnership arrangements:

Carried Interest (CI) Partners

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 A normal working interest partner may become a CI partner by taking
one of the following actions:

o Failing to sign the joint operating agreement (JOA)

o Exercising the non-consent provisions of the JOA and declining to
participate as a working interest partner in proposed exploration,
development, and production activities

As long as one of these conditions continues, a group of working interest

partners in the venture bears the expenses and shares the revenues that
would normally accrue to the CI partner based on equity share. Payout is
achieved when the revenues exceed the sum of the expenses
accumulated since initiation of this arrangement and a designated
additional percentage of the expenses. As a result, the CI partner’s
interest reverts to a normal working interest, and that partner once again
participates as a full working interest equity owner in the venture. A
specific CI arrangement usually applies to one JOA; thus, payout is
achieved when the penalty provisions of that one JOA are met.

Net Profit Interest (NPI) Partners

A normal working interest partner becomes an NPI partner by making an

agreement with the operating partner to yield a working interest to the
operator in return for a negotiated percentage of the interest’s future
revenue. The NPI arrangement is different from the CI arrangement
because the NPI partner permanently gives up a working interest in the
venture; whereas, the CI partner temporarily yields the working interest
until the interest’s revenues exceed its expenses by a ratio. At this time,
the CI partner once again participates as a full working interest equity
owner in the venture.

Under the conditions of a typical NPI arrangement, the operator of the

venture bears the expenses and enjoys the revenues that would have
previously accrued to the NPI partner based on the interest’s equity
share. When the revenues exceed the expenses accumulated since
initiation of the arrangement, the NPI partner’s interest does not revert to
a normal working interest. Instead the NPI partner receives a percentage
of the relinquished interest’s revenues which is specified in that partner’s
agreement with the operator.

Suspended Partners, Projects, and Equity Groups

If a partner, project, or equity group is suspended, cutback postings are

not executed until the affected entity is removed from suspension. When
the entity is unsuspended, cutback processes all expenses for the
complete time of its suspense.

Suspended partners do not receive an invoice. In a subsequent period

when partners are unsuspended, they will receive an invoice that
includes expenses for the complete period of their suspense.

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 If there are any outstanding postings for the project, partner or equity
group and cutback has not been run, (and no entries exist per line in the
billing ledger) you can suspend a project, WBS or equity group.

If cutback has been run, you can not suspend a project, WBS or equity
group if you can not place the entity in suspense directly because
cutback has been run. Create a new project, WBS or equity group with
identical attributes to the former, then suspend.

• Equity Group, Partner, and Project Suspense

Your implementation team must configure special cutback posting rules to enable cutback to
process the expenses for equity groups, partners, and projects that are in suspense, but to avoid
posting these expenses to the equity groups, partners, or projects during the suspense period.

• Intercompany Ventures

To enable cutback to process expenses for intercompany ventures, your implementation team
must create the following:

Cutback objects for intercompany partners

Accounts to be used specifically by cutback to post expenses for intercompany ventures

These objects and accounts feed cutback generated postings to corresponding target objects and
accounts in the associated company’s general ledger.

Cutback does not pick up expenses from suspended projects and equity groups. When you
remove and object from suspense, cutback picks up the expenses for all the previous accounting
periods in which the project or equity group was suspended. By executing the following program
prior to running cutback, you can change the recovery indicator for identified projects and equity
groups. This transaction allows you to suspend a previously billable project or equity group, and
to remove a project or equity group from suspense and change it to billable.

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Cutback processing → Susp. project/eq.gr.

The Suspense projects and equity groups screen appears.

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Procedure
1. Enter the Company code on the Suspense projects and equity groups screen.

2. Enter the Fiscal year.

3. Enter the Period.

4. Select from the Processing options (Test run).

5. Choose the Execute function. The Project/equity group suspense run for the specified
company and period appears.

Running Pre-Cutback Equity Change

Management
Prerequisites
To process cutback in SAP, you must configure the following accounts:

• Fixed accounts and objects in SAP FI

• Posting rules for cutback
• Cutback accounts for accounts that cannot post expenses directly

You must also configure accounts and objects in SAP FI and SAP JVA, for the following
conditions, to enable cutback to post entries:

• Special Partnership Arrangements

When your implementation team configures cutback for your company to process expenditures
for typical ventures, it should also set up objects to enable cutback to process postings for the
following special partnership arrangements:

Carried Interest (CI) Partners

A normal working interest partner may become a CI partner by taking one of the
following actions:

o Failing to sign the joint operating agreement (JOA)

o Exercising the non-consent provisions of the JOA and declining to participate as
a working interest partner in proposed exploration, development, and production
activities

As long as one of these conditions continues, a group of working interest

partners in the venture bears the expenses and shares the revenues that would
normally accrue to the CI partner based on equity share. Payout is achieved
when the revenues exceed the sum of the expenses accumulated since initiation
of this arrangement and a designated additional percentage of the expenses. As

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 a result, the CI partner’s interest reverts to a normal working interest, and that
partner once again participates as a full working interest equity owner in the
venture. A specific CI arrangement usually applies to one JOA; thus, payout is
achieved when the penalty provisions of that one JOA are met.

Net Profit Interest (NPI) Partners

A normal working interest partner becomes an NPI partner by making an

agreement with the operating partner to yield a working interest to the operator in
return for a negotiated percentage of the interest’s future revenue. The NPI
arrangement is different from the CI arrangement because the NPI partner
permanently gives up a working interest in the venture; whereas, the CI partner
temporarily yields the working interest until the interest’s revenues exceed its
expenses by a ratio. At this time, the CI partner once again participates as a full
working interest equity owner in the venture.

Under the conditions of a typical NPI arrangement, the operator of the venture
bears the expenses and enjoys the revenues that would have previously accrued
to the NPI partner based on the interest’s equity share. When the revenues
exceed the expenses accumulated since initiation of the arrangement, the NPI
partner’s interest does not revert to a normal working interest. Instead the NPI
partner receives a percentage of the relinquished interest’s revenues which is
specified in that partner’s agreement with the operator.

Suspended Partners, Projects, and Equity Groups

If a partner, project, or equity group is suspended, cutback postings are not

executed until the affected entity is removed from suspension. When the entity is
unsuspended, cutback processes all expenses for the complete time of its
suspense.

Suspended partners do not receive an invoice. In a subsequent period when

partners are unsuspended, they will receive an invoice that includes expenses for
the complete period of their suspense.

If there are any outstanding postings for the project, partner or equity group and
cutback has not been run, (and no entries exist per line in the billing ledger) you
can suspend a project, WBS or equity group.

If cutback has been run, you can not suspend a project, WBS or equity group if
you can not place the entity in suspense directly because cutback has been run.
Create a new project, WBS or equity group with identical attributes to the former,
then suspend.

• Equity Group, Partner, and Project Suspense

Your implementation team must configure special cutback posting rules to enable cutback to
process the expenses for equity groups, partners, and projects that are in suspense, but to avoid
posting these expenses to the equity groups, partners, or projects during the suspense period.

• Intercompany Ventures

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To enable cutback to process expenses for intercompany ventures, your implementation team
must create the following:

Cutback objects for intercompany partners

Accounts to be used specifically by cutback to post expenses for intercompany ventures

These objects and accounts feed cutback generated postings to corresponding target objects and
accounts in the associated company’s general ledger.

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Cutback processing → Pre-cutback eq. chng.

The Pre-Cutback Equity Change Management screen appears.

You run the pre-cutback equity change management transaction prior to cutback when
there has been a change of equity group within a period for which cutback is being run.
The expenses for the former equity group are apportioned to the current equity group.

Procedure
1. Enter the Company code on the Pre-Cutback Equity Change Management screen.
2. Enter the Fiscal year.
3. Enter the Period.
4. Select from the Processing options (With recs processed by cutback, Test run).
5. Select the Recovery indicators (All billable, All non-billable, or a range of Recovery
indicators)
6. Choose the Execute function. The Equity Change Management Report appears.

Running Cutback
Prerequisites
To process cutback in SAP, you must configure the following accounts:

• Fixed accounts and objects in SAP FI

• Posting rules for cutback
• Cutback accounts for accounts that cannot post expenses directly

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You must also configure accounts and objects in SAP FI and SAP JVA, for the following
conditions, to enable cutback to post entries:

• Special Partnership Arrangements

When your implementation team configures cutback for your company to process expenditures
for typical ventures, it should also set up objects to enable cutback to process postings for the
following special partnership arrangements:

Carried Interest (CI) Partners

A normal working interest partner may become a CI partner by taking

one of the following actions:

o Failing to sign the joint operating agreement (JOA)

o Exercising the non-consent provisions of the JOA and declining to
participate as a working interest partner in proposed exploration,
development, and production activities

As long as one of these conditions continues, a group of working interest

partners in the venture bears the expenses and shares the revenues that
would normally accrue to the CI partner based on equity share. Payout is
achieved when the revenues exceed the sum of the expenses
accumulated since initiation of this arrangement and a designated
additional percentage of the expenses. As a result, the CI partner’s
interest reverts to a normal working interest, and that partner once again
participates as a full working interest equity owner in the venture. A
specific CI arrangement usually applies to one JOA; thus, payout is
achieved when the penalty provisions of that one JOA are met.

Net Profit Interest (NPI) Partners

A normal working interest partner becomes an NPI partner by making an

agreement with the operating partner to yield a working interest to the
operator in return for a negotiated percentage of the interest’s future
revenue. The NPI arrangement is different from the CI arrangement
because the NPI partner permanently gives up a working interest in the
venture; whereas, the CI partner temporarily yields the working interest
until the interest’s revenues exceed its expenses by a ratio. At this time,
the CI partner once again participates as a full working interest equity
owner in the venture.

Under the conditions of a typical NPI arrangement, the operator of the

venture bears the expenses and enjoys the revenues that would have
previously accrued to the NPI partner based on the interest’s equity
share. When the revenues exceed the expenses accumulated since
initiation of the arrangement, the NPI partner’s interest does not revert to
a normal working interest. Instead the NPI partner receives a percentage
of the relinquished interest’s revenues which is specified in that partner’s
agreement with the operator.

Suspended Partners, Projects, and Equity Groups

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 If a partner, project, or equity group is suspended, cutback postings are
not executed until the affected entity is removed from suspension. When
the entity is unsuspended, cutback processes all expenses for the
complete time of its suspense.

Suspended partners do not receive an invoice. In a subsequent period

when partners are unsuspended, they will receive an invoice that
includes expenses for the complete period of their suspense.

If there are any outstanding postings for the project, partner or equity
group and cutback has not been run, (and no entries exist per line in the
billing ledger) you can suspend a project, WBS or equity group.

If cutback has been run, you can not suspend a project, WBS or equity
group if you can not place the entity in suspense directly because
cutback has been run. Create a new project, WBS or equity group with
identical attributes to the former, then suspend.

• Equity Group, Partner, and Project Suspense

Your implementation team must configure special cutback posting rules to enable cutback to
process the expenses for equity groups, partners, and projects that are in suspense, but to avoid
posting these expenses to the equity groups, partners, or projects during the suspense period.

• Intercompany Ventures

To enable cutback to process expenses for intercompany ventures, your implementation team
must create the following:

Cutback objects for intercompany partners

Accounts to be used specifically by cutback to post expenses for intercompany ventures

These objects and accounts feed cutback generated postings to corresponding target objects and
accounts in the associated company’s general ledger.

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Cutback processing → Cutback.

The Cutback screen appears.

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Procedure
1. Enter the Company code on the Cutback screen.

2. Enter the Fiscal year.

3. Enter the Period.

4. Select from the Processing options (Testrun, Intermediate cutback run, Not completed
ventures only, or Perform asset postings).

5. Choose the Execute function. The Cutback report will appear if you selected Testrun as a
processing option. If you selected Intermediate cutback, a document number will appear.

If the Not completed ventures only field is flagged, cutback will process only the ventures that
have not been processed successfully for the current month. The first cutback run processes all
selected ventures. The second cutback run processes only the ventures that have been in error
status at the time of the first cutback run.

If the Not completed ventures only field is not flagged, cutback will process all selected ventures.

If the Perform asset postings field is flagged, cutback handles expenses posted to an asset in the
following two steps:

1. Cutback posts the expense offset to a cutback account defined in configuration

2. The cutback account is cleared to the original asset

If the Perform asset postings field is not flagged, the second part of the posting is not processed.

Clearing Partner Suspense After Cutback

Prerequisites
Introduction

To process cutback in SAP, you must configure the following accounts:

• Fixed accounts and objects in SAP FI

• Posting rules for cutback
• Cutback accounts for accounts that cannot post expenses directly

You must also configure accounts and objects in SAP FI and SAP JVA, for the following
conditions, to enable cutback to post entries:

• Special Partnership Arrangements

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When your implementation team configures cutback for your company to process expenditures
for typical ventures, it should also set up objects to enable cutback to process postings for the
following special partnership arrangements:

Carried Interest (CI) Partners

A normal working interest partner may become a CI partner by taking

one of the following actions:

o Failing to sign the joint operating agreement (JOA)

o Exercising the non-consent provisions of the JOA and declining to
participate as a working interest partner in proposed exploration,
development, and production activities

As long as one of these conditions continues, a group of working interest

partners in the venture bears the expenses and shares the revenues that
would normally accrue to the CI partner based on equity share. Payout is
achieved when the revenues exceed the sum of the expenses
accumulated since initiation of this arrangement and a designated
additional percentage of the expenses. As a result, the CI partner’s
interest reverts to a normal working interest, and that partner once again
participates as a full working interest equity owner in the venture. A
specific CI arrangement usually applies to one JOA; thus, payout is
achieved when the penalty provisions of that one JOA are met.

Net Profit Interest (NPI) Partners

A normal working interest partner becomes an NPI partner by making an

agreement with the operating partner to yield a working interest to the
operator in return for a negotiated percentage of the interest’s future
revenue. The NPI arrangement is different from the CI arrangement
because the NPI partner permanently gives up a working interest in the
venture; whereas, the CI partner temporarily yields the working interest
until the interest’s revenues exceed its expenses by a ratio. At this time,
the CI partner once again participates as a full working interest equity
owner in the venture.

Under the conditions of a typical NPI arrangement, the operator of the

venture bears the expenses and enjoys the revenues that would have
previously accrued to the NPI partner based on the interest’s equity
share. When the revenues exceed the expenses accumulated since
initiation of the arrangement, the NPI partner’s interest does not revert to
a normal working interest. Instead the NPI partner receives a percentage
of the relinquished interest’s revenues which is specified in that partner’s
agreement with the operator.

Suspended Partners, Projects, and Equity Groups

If a partner, project, or equity group is suspended, cutback postings are

not executed until the affected entity is removed from suspension. When
the entity is unsuspended, cutback processes all expenses for the
complete time of its suspense.

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 Suspended partners do not receive an invoice. In a subsequent period
when partners are unsuspended, they will receive an invoice that
includes expenses for the complete period of their suspense.

If there are any outstanding postings for the project, partner or equity
group and cutback has not been run, (and no entries exist per line in the
billing ledger) you can suspend a project, WBS or equity group.

If cutback has been run, you can not suspend a project, WBS or equity
group if you can not place the entity in suspense directly because
cutback has been run. Create a new project, WBS or equity group with
identical attributes to the former, then suspend.

• Equity Group, Partner, and Project Suspense

Your implementation team must configure special cutback posting rules to enable cutback to
process the expenses for equity groups, partners, and projects that are in suspense, but to avoid
posting these expenses to the equity groups, partners, or projects during the suspense period.

• Intercompany Ventures

To enable cutback to process expenses for intercompany ventures, your implementation team
must create the following:

Cutback objects for intercompany partners

Accounts to be used specifically by cutback to post expenses for intercompany ventures

These objects and accounts feed cutback generated postings to corresponding target objects and
accounts in the associated company’s general ledger.

Cutback does not pick up expenses for suspended partners. To book these
expenses, you must clear partner suspense by changing the billing indicator to
billable.

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Cutback processing → Partner susp.clear.

The Partner Suspense Clearance screen appears.

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Procedure
1. Enter the Company code on the Partner Suspense Clearance screen.

2. Enter the Fiscal year.

3. Enter the Period.

4. Select from the Processing options (Testrun, Keep batch input).

5. Choose the Execute function. The Partner Suspense Clearance Report - Open Items Cleared
report appears.

Payment Term Schema for Cutback

Use
You can define a payment term schema for a venture that is used by the cutback process to
determine the payment terms used in the cutback postings.

Complete Payment Term Schema for Cutback Postings

The payment term defined on the venture (that is being processed by cutback) is used in the
cutback postings, if a payment term is defined.

The payment term schema defined on the venture (that is being processed by cutback)
determines the payment term used in the cutback postings, if no payment term, but a payment
term schema, is defined on the venture.

• The payment term defined on the customer is used in the cutback postings, if no payment
term or payment term schema is defined on the venture.
• If the payment term schema is used for deriving cutback payment terms, the following
logic is applied:

You can define payment terms for each recovery indicator (RI) that can be picked up by the
cutback process. This payment term will then be used in the cutback posting.

You can define payment terms for each RI and original payment term used in the original posting.

You can call a user exit that changes the payment term assignment of the cutback postings.

Prerequisites
Menu Path

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On the Display structure menu in the IMG, choose Joint venture accounting → Processing →
Cutback Control → Payment Term Schema.

There are three maintenance levels for payment term schemas, as follows:

Level 1: Payment Term Schema

Here, you can define and describe the payment term schema.

Level 2: Cutback Payment Terms for RIs

Here, you can define cutback payment terms for each billable RI, as well as a user exit that can
be called for derivation of the payment terms. In detail, you can maintain the following fields on
this level:

• RI
Cutback processes each billable RI separately. You specify the billable RI here.

• Cutback Payment Term

This payment term is used for all cutback postings that are created based on the billable
items posted with the corresponding RI. If no payment term is defined on this level, the
next level is checked to determine the cutback payment terms.

• User Exit Function

You can enter a function here that will be called as a user exit, where the cutback
payment terms (derived by the standard process) can be modified.

• Single Item Information Required

For performance reasons, the cutback process only reads line item information when the
cutback payment terms are derived on the third level. However, if the user exit is used
and if it requires line item information, this flag should be activated. This forces the
cutback process to read the line item information.

Level 3: Cutback Payment Terms for RI and Original Payment Term

Here, you can define cutback payment terms for each billable RI and payment term assigned to
the original posting. You can maintain the following fields on this level:

• Original Payment Term

Each SAP JVA document with a customer or vendor line has payment terms assigned to
each line item of this document. Here we define what payment term of the original
document this configuration is being made for.

• Cutback Payment Term

This payment term is used for all cutback postings that are created based on the billable
items posted with the corresponding RI and original payment term.

Features

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User Exit Function
On the second level, you can enter a function that will be called as a user exit during the cutback
process. This function expects the following input parameters

I_BUKRS

This is the company code that is valid for this call of the user exit.

I_WAERS
This is the currency that is valid for this call of the user exit.

I_VNAME
This is the venture that is valid for this call of the user exit.

I_EGRUP
This is the equity group that is valid for this call of the user exit.

I_T8JV_ITEM
This table contains the SAP JVA line item information that is relevant for the cutback process of
this venture and equity group.

I_CB_RESULT
This table contains the partner lines of the cutback document as it has been calculated by the
cutback process.

The function returns a table E_CB_RESULT that contains the modified partner lines of the cutback
document. You can add or delete lines and assign new payment terms, if the total amount
charged to the partners has not been changed and if no new partners are added to the cutback
document.

Example
Master Data

All examples use the following master data.

Equity group E1 assigned to venture V1 contains the following partners:

Partner Share
Operator 60 %
Partner A 30 %
Partner B 10 %

Venture V1 is assigned to payment term schema 0001.

RIs B1 and B2 are set up as billable RIs.

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 Original postings

The following invoices were posted during one period. B1 and B2 are billable RIs:

Account PayTerm Cost obj. Venture EgGr RI Amount

Vendor A PT01 CC1 V1 E1 CP 2,000-
Material PT01 CC1 V1 E1 B1 2,000
Account PayTerm Cost obj. Venture EgGr RI Amount
Vendor A PT02 CC1 V1 E1 CP 3,000-
Material PT02 CC1 V1 E1 B1 3,000
Account PayTerm Cost obj. Venture EgGr RI Amount
Vendor A PT03 CC1 V1 E1 CP 4,000-
Material PT03 CC1 V1 E1 B2 4,000

With this, the following data is relevant for the cutback process:

Summary level:
Account Cost obj. Venture EgGr RI Amount
Material CC1 V1 E1 B1 5,000
Material CC1 V1 E1 B2 4,000
Line item level:
Account PayTerm Cost obj. Venture EgGr RI Amount
Material PT01 CC1 V1 E1 B1 2,000
Material PT02 CC1 V1 E1 B1 3,000
Material PT03 CC1 V1 E1 B2 4,000

Payment Term Schema Definition

Payment term schema 0001 is defined as follows:

PT Schema RI Cutback PT
0001 B1 CPT1
0001 B2 CPT2

Cutback Postings

Cutback creates separate postings for each RI. Based on the configuration of payment
term schema 0001, the cutback postings are made with the following payment terms:

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 o Cutback postings made for RI B1 are posted with payment term CPT1.
o Cutback postings made for RI B2 are posted with payment term CPT2.

This results in the following cutback postings:

Account PayTerm Cost obj. Venture EgGr RI Amount

Partner A CPT1 CC1 V1 E1 CB 1,500
Partner B CPT1 CC1 V1 E1 CB 500
Material CC1 V1 E1 CB 2,000-
Account PayTerm Cost obj. Venture EgGr RI Amount
Partner A CPT2 CC2 V2 E2 CB 1,200
Partner B CPT2 CC2 V2 E2 CB 400
Material CC2 V2 E2 CB 1,600-

Payment Term Schema Definition

Payment term schema 0001 is defined as follows:

PT Schema RI Cutback PT
0001 B1
0001 B2 CPT2

For RI B1, the payment term schema 0001 has the following additional configuration on
RI / payment term level:

PT Schema RI Original PT Cutback PT

0001 B1 PT01 CPT1
0001 B1 PT02 CPT3

Cutback Postings

Cutback creates separate postings for each RI. Based on the configuration of payment
term schema 0001 the cutback postings are made with the following payment terms.

Cutback postings made for RI B1 are posted with:

o Payment term CPT1 if the payment term of the original posting was PT01
o Payment term CPT3 if the payment term of the original posting was PT02

Cutback postings made for RI B2 are posted with payment term CPT2.

This results in the following cutback postings:

Account PayTerm Cost obj. Venture EgGr RI Amount

Partner A CPT1 CC1 V1 E1 CB 600

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Partner A CPT3 CC1 V1 E1 CB 900
Partner B CPT1 CC1 V1 E1 CB 200
Partner B CPT3 CC1 V1 E1 CB 300
Material CC1 V1 E1 CB 2,000-
Account PayTerm Cost obj. Venture EgGr RI Amount
Partner A CPT2 CC2 V2 E2 CB 1,200
Partner B CPT2 CC2 V2 E2 CB 400
Material CC2 V2 E2 CB 1,600-

Carried Interest (CI) and Net Profit Interest (NPI)

Definition
In North America, Joint Venture Accounting (JVA) Regions US and Canada, it is common for joint
venture partners to carry the ownership interest of another partner. The carrying partners assume
the expenses and the revenues of the carried partner. This arrangement usually results when the
carried partner takes one of the following actions:

• Fails to sign the joint operating agreement (JOA)

• Exercises the non-consent provisions of the JOA and does not participate in proposed
development and production activities
• Agrees to yield a working interest to the operator in return for a negotiated percentage of
the interest’s future revenue

CI and NPI partnerships are the two types of joint venture arrangements that address these
situations.

Use
CI Partners

A working interest partner can become a CI partner by failing to sign a JOA or by exercising the
non-consent provisions of the JOA and refusing to participate in proposed development and
production activities.

The operator can penalize the CI by defining penalty percentages (in the JOA) for the venture
development and operational costs assumed by other partners. Revenue must exceed these
costs before the CI partner can receive payment and resume participation in the venture. A CI
arrangement usually applies to one JOA.

NPI Partners

A working interest partner can becomes an NPI partner by giving a working interest to the
operator in return for a negotiated percentage of the interest’s future revenue. The NPI
arrangement is different from the CI arrangement because the NPI partner surrenders a working
interest permanently.

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In a typical NPI arrangement, the operator bears the expenses and enjoys the revenues that
would have accrued to the NPI partner. When the revenues exceed the expenses accumulated
since initiation of the arrangement, the NPI partner receives an agreed percentage of the
relinquished interest’s revenues.

Netting

Both CI and NPI partnership arrangements involve netting expenses and revenues to determine
whether or not the partner has been paid. This occurs after cutback. Processing expenses for CI
or NPI arrangements, which includes both cutback and CI or NPI netting, involves the following:

1. Cutback is executed to assign expenses that were booked to cost objects for a venture to
the equity group owners based on their ownership share
2. CI or NPI netting is executed to compare cutback-generated expenses with revenues
booked to the CI or NPI partner to determine whether payout has been achieved.
3. If payout is not achieved, CI or NPI netting does not post any entries. If payout is
achieved, CI or NPI netting posts appropriate revenues to the CI or NPI partner.

Payout for CI Partners

Before CI or NPI netting, cutback apportions the expenses for the partner’s share among the
working interest partners and the operator according to the CI arrangement for the joint venture
and equity group. When CI or NPI netting determines that the CI partner has reached payout, the
interest is converted to a normal working interest. Expenses and revenues once again accrue to
the CI partner based on the equity share.

Payout for NPI Partners

Before CI or NPI netting, cutback assigns all expenses associated with the NPI partner’s equity
share to the venture operator. The CI or NPI netting function assigns a portion of the revenues for
the interest to the NPI partner, while the remaining revenue and all expenses are booked to the
operator.

Source of Revenue

SAP JVA Cutback is the source of the expense data input to CI and NPI netting. Revenues must
be fed into SAP JVA from another system, and this data is the source of revenue data input to CI
and NPI netting.

Non-executable Processes for CI and NPI Partners

The following SAP FI and SAP JVA processes cannot be executed for CI and NPI partners:

• Placing the partner in suspense

• Posting direct charges to the partner
• Issuing cash calls to the partner

Each CI and NPI Partner May Have A Different Billing Format

A billing format is assigned to each partner or venture during configuration. If partner-based billing
has been selected, each partner can have a different billing format. If venture-based billing has
been selected, all venture partners are assigned the billing format of venture.

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Executing Group Carried Interest and Net Profit
Interest Netting
Prerequisites
Prior to running netting, configuration requirements must be completed in SAP FI, SAP CO, and
SAP Joint Venture Accounting (JVA). For more information, see:

Prerequisites in FI

Prerequisites in CO

Prerequisites in JVA

Menu Path

On the SAP Easy Access screen, choose Joint venture accounting → Periodic processing →
Netting → Grouped CI/NPI nettg.

The CI/NPI Processing screen appears.

Procedure
1. Enter the Company code on the CI/NPI Processing screen.

2. Enter the Fiscal year.

3. Enter the Posting period.

4. Select from the Processing options: Test run or Equity Group list (act/inact).

5. Choose the Execute function. The JV Billing Ledger Entries statement appears.

Carried Interest (CI) and Net Profit Interest (NPI)

Statements
Definition
The CI and NPI statements are produced by executing the SAP Joint Venture Accounting (JVA)
hard copy billing process. Previously, CI and NPI statements were produced during SAP JVA CI
or NPI netting.

Billing Configuration of CI and NPI Statements

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Use
Carried Interest (CI) and Net Profit Interest (NPI) statements are produced as part of the
execution of SAP Joint Venture Accounting (JVA) billing. As a result, you can customize these
statements by using the extensive formatting and totaling functions of SAP JVA billing. Also, you
must establish settings for CI and NPI statements in SAP JVA billing configuration. To enable
production of CI and NPI statements through SAP JVA billing, you must perform the following
configuration tasks:

1. You must assign the combination of the form type for CI and the type for NPI and the
billing program form routines for both CI and NPI to the billing structure for the SAP JVA
company
2. You must assign the SAPscript layout sets for CI and NPI to the form types for CI and
NPI for the billing structure.
3. You must map the billing indicators that are relevant to the CI and NPI statements, with
reference to subtotaling, for the CI and NPI layout sets
4. You must link the billing levels or events to text elements in the CI and NPI layout sets.
5. Finally, you must assign the combination of the CI and NPI form types and layout sets to
the SAP JVA partner‘s billing format.

Assigning CI and NPI Form Types and Form Routines to Billing Structure

A single billing structure is defined for each SAP JVA company in SAP JVA Billing configuration,
and that structure is assigned to the company on the Detailed Data screen in SAP JVA
configuration. All billing documents to be produced for the JVA company must be assigned to the
company’s billing structure. Each billing document has the following dimensions:

1. The form routine accessed from the SAP JVA Billing program RGJVBR15
2. The SAPscript layout set that controls format of the document

The form type for the billing document links the form routine and the layout, set to generate a
document during execution of SAP JVA billing. All available form types are pre-defined and
delivered with the system. There is a corresponding form type for each type of billing document.
The types are also specific to SAP JVA regions. For example, the form type for the invoice
document is IV.

The first step in assigning a new billing document to an SAP JVA company is to assign the
combination of the form type and the RGJVBR15 form routine to the billing structure. Two new
form types have been defined for CI and NPI statements: CI and NI.

Menu Path

On the Display structure menu in the IMG, choose Joint venture accounting → Billing →
Operated → Billing structure.

Procedure

1. On the Billing Structures: Overview screen, choose the billing structure for the SAP JVA
company and then choose the Form routine assignment button.
2. On the Form routines used for billing: Overview screen, choose New entries.

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 3. On the New Entries: Details of Created Entries screen, enter the code for the CI or NPI
form type (CI or NI) in the Form Type field of the Assignment section, and choose the
Assign button to automatically assign the form routine to the form type and billing
structure.

Assigning CI and NPI Layout Sets to Form Types for the Billing Structure

SAPscript layout sets are used to format SAP JVA billing documents. The next step of setting up
a new billing document for an SAP JVA company is to assign the layout set for the document to
the JVA form type for that type of document.

Two new layout sets produce standard CI and NPI billing documents:

• JV_CI_STATEMENT
• JV_NPI_STATEMENT

You can use these layout sets as delivered or create your own based on these delivered layout
sets.

Menu Path

On the Display structure menu in the IMG, choose Joint venture accounting → Billing →
Operated → Layout Sets → Layout Set Assignment.

Procedure

1. On the JV Layout sets: Overview screen, choose New entries.

2. On the New Entries: Overview of Created Entries screen, enter the name of the layout
set for the CI or NPI statement in the Form field. Enter the code for the form type for CI or
NPI (CI or NI) in the FT field, and enter the code for the SAP JVA company’s billing
structure in the BStr field.
3. Press Enter to edit the entry and select your new entry.

Map Billing Indicators for the CI and NPI Layout Sets

SAP JVA billing indicators designate specific types of billable expenses in the SAP JVA ledger.
These billing indicators are used during JVA billing to produce subtotals of certain types of
expenses, and these subtotals appear on specific billing documents that are formatted by layout
sets. The next step in defining a new billing document for an SAP JVA company is to map the
billing indicators for the document‘s layout set. This involves mapping the billing indicators that
are relevant to CI and NPI netting to produce subtotals of the expenses and the revenues, netted
against one another to determine payout.

Procedure

1. On the New Entries: Overview of Created Entries screen with the newly assigned layout
set selected, choose the Billing indicator mapping button.

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 2. On the Billing indicator mapping screen, choose New entries and enter the mapping
instructions to achieve the desired subtotal and total. You assign the mapping of billing
indicators defined here to the text elements of the billing document‘s layout set in the next
step of configuration. The subtotal and total defined here can be used as the document is
generated during SAP JVA billing.

You can enter information into five fields on the New Entries: Overview of Created Entries screen.
Four of these fields work together to indicate the mapping of billing indicators and the subtotals
and totals. The fifth field, the indicator R, shows whether an entry amount is billed to the SAP JVA
partner. Other processes, such as Lockbox, use this indicator. The four fields that work together
to determine mapping of billing indicators and summation are: FT for form total, No for number,
PT for previous total, and BI for billing indicator.

Each new form total number indicates a new subtotal. Each summary level on the billing
document should be defined as a separate form total.

Example 1

With regard to CI, if expenses for a partner under CI should be broken down on the bill,
based on expense type and penalty category, you must define a separate form total for
each billing indicator with a different expense type or penalty category combination. If
there are three CI relevant billing indicators (P0, P1, P5) with different combinations of
expense type and penalty category, then a form total would be defined for each billing
indicator as follows:

FT No PT BI

2 1 P0

3 1 P1

4 1 P5

The No field holds the sequence number of each entry to a form total. There is only a
single entry for each of the three form totals for CI expenses in the first example, so each
is assigned the sequence number 1. Since you can assign multiple sequential numbers
to the No field for separate entries to the same form total, you can combine different
types of expenses into a single form total.

Example 2

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 The following example shows an alternative to breaking down CI expenses by individual
billing indicator. The expenses assigned billing indicators P1 and P5 are combined into
form total 3.

FT No PT BI

2 1 P0

3 1 P1

3 2 P5

Using the sequence number available through No and the previous total (PT) field, you
can also produce subtotals consisting of groups of previous form totals. To display a
subtotal of all CI expenses on the statement, you must define this subtotal as a separate
form total. In Example1 0there were three lines of different types of expenses. The sum
of these three lines forms a subtotal of all CI relevant expenses. There will be three
entries to the summing form total, each with a different sequence number. Since each of
these entries references a previous form total, the number of that previous form total will
appear in the entry as well.

FT No PT BI

9 1 2

9 2 3

9 3 4

Form total 9 is a summary of all CI relevant expenses. Three entries are necessary to
gather all expenses under the form total, so the sequence in No runs from 1 to 3. Each
entry to form total 9 accesses a previous form total (shown in the first example above).

Link Billing Levels or Events to Text Elements in the CI and NPI Layout Sets

The data extracts used to produce the various SAP JVA billing documents are stored in special
structures. The next step of setting up a new billing document for an SAP JVA company is to link
the billing levels of the appropriate structure to the text elements in the layout set that formats the
billing document.

Procedure

1. On the Billing indicator mapping screen for the selected layout set, choose the Events
button.
2. On the JV Billing events: Overview screen, choose New entries.

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 3. On the New Entries: Overview of Created Entries screen, enter the billing events and the
corresponding text elements in the layout sets and, when appropriate, the form totals that
go with them.

There are six fields on the New Entries: Overview of Created Entries screen, but you should only
use the billing level (BiLev), text element (Element), and form total (FT) fields to define the links
between billing levels and text elements. The following entries should always appear in the other
three fields:

No Window +

1 MAIN 3

If you are using the delivered layout sets for CI and NPI documents, the text elements have the
same names as the corresponding billing levels or events, so for each billing level entry the
contents of the BiLev and Element fields are identical.

Assign the CI and NPI Form Types and Layout Sets to the SAP JVA Partner’s Billing Format

SAP JVA billing formats are assigned to partner records through JVA processing Master data
maintenance. An SAP JVA billing format consists of a list of billing documents. The billing format
assigned to a partner indicates which billing documents should be produced for that partner when
SAP JVA billing is executed.

You define billing formats during SAP JVA billing configuration. Documents are assigned to billing
formats by the combination of the JVA form type and the layout set for the billing document.

Menu path

On the Display structure menu in the IMG, choose Joint venture accounting → Billing →
Operated → Billing Formats.

Procedure

1. On the Billing formats:Overview screen, choose the billing format and billing structure
combination to which you intend to assign a new billing document.
2. With the billing format and billing structure selected, choose the Format type assignment
button.
3. On the entry screen, choose New entries
4. On the New Entries: Overview of Created Entries screen, enter the form type for the new
billing document in the FT field. Enter the sequence number of the document for the form
type within the billing structure in the No field (usually 1), and the name of the layout set
for the document in the Form field.

Executing Hard Copy Billing for CI and NPI

Statements

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Use
Carried Interest (CI) and Net Profit Interest (NPI) statements are produced in two steps, each
controlled by a different SAP Joint Venture Accounting (JVA) process:

1. CI/NPI Netting produces a data extract with all relevant data for CI and NPI statements.
2. Hard Copy Billing produces a formatted printout of the CI and NPI statements.

To enable this second step, CI statement and NPI statement indicators have been added to the
Printout selection section of the Hard Copy Billing selection screen.

As a result of integrating the CI and NPI statements with Hard Copy Billing, you can customize
the CI and NPI statements. Depending on how the statements are defined in JVA Billing
Configuration, you can set them up to show detail at the following levels:

• Venture or equity group

• Venture or equity type
• Venture
• CI or NPI group

Billing configuration determines the amounts shown on the CI and NPI statements, how those
amounts are subtotaled, and the order of the amounts and subtotals on the statements. You can
even present all amounts and subtotals on a single line.

Partner Netting and Convenience Netting

Use
SAP Joint Venture Accounting (JVA) offers the processes partner netting and convenience
netting to facilitate the period-end closing of customer accounts by performing reconciliation and
by preparing for the SAP JVA billing process.

You can use these SAP JVA processes to clear open items and consolidate them into a single
new open item. Because they clear postings produced by other SAP JVA processes, the netting
programs are run at the end of the period after cutback.

The main difference between partner netting and convenience netting is the range of items
included in the clearing. Partner netting only includes expense items in clearing, but convenience
netting includes revenues, as well as expenses in clearing. Also, partner netting is executed for
an operation month, while convenience netting is executed for a billing month.

Partner Netting

Partner netting is available for operated and non-operated joint ventures. When partner netting is
executed for operated joint ventures, the following items are included in netting for the partner,
joint venture, and equity group:

• Cash calls

• Reclassifications of cash call payments

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 • Cutback expenditures

When partner netting is executed for non-operated joint ventures, the following items are included
in netting for the joint venture and equity group:

• Cash calls due to the operator

• Cutback expenditures for non-operated joint ventures

Partner netting is a two-step process:

1. All selected items for the partner within the equity group and joint venture cleared.
2. A single new open expense item, summarizing the previously outstanding cleared
expense items, is posted to the partner's customer account in SAP FI accounts
receivable.

Partner netting creates a new clearing entry for each unique combination of partner, equity group,
and venture. To be included in a single clearing entry booked by partner netting, SAP FI accounts
receivable entries must be booked to the same equity group and venture, as well as to the same
partner. All three elements (partner, equity group, and venture) must be the same for multiple
entries to be selected for clearing by a single entry posted by partner netting.

Convenience Netting

Usually convenience netting is used only by US and Canadian region companies. Convenience
netting is a three-step process.

1. All open expense items for a partner for a specified period are summarized.

2. All open revenue entries for the partner for the period are summarized.

3. If the summarized revenues exceed the expenses, a single credit entry is posted to the
partner’s vendor account in SAP FI accounts payable.

Convenience netting posts this credit entry to the partner’s account only if there is a credit
balance. If not, the netting program does not perform any processing.

The convenience netting process nets the following items for a partner for a specified (usually the
current) billing month:

• Revenues

• Expenses

• Cash calls

• Reclassified cash payments

Open items can be netted for a partner across all ventures, in which case convenience netting
creates a single open item per partner. Alternatively, open items can be netted per venture but
across equity groups, in which case convenience netting creates one open item per partner per
venture. You specify the netting level when you execute convenience netting.

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Partner netting summarizes all the entries related to a billing month, clearing the following:

Cash Calls

Cash calls are requests from joint venture operating partners to non-operating partners
requesting payment for anticipated future capital and operating expenditures. Cash call
functionality is completely integrated with accounts receivable in SAP’s FI application.
Cash call requests and receipts are carried forward to the SAP JVA billing process.

Reclassified Cash Call Payments

Reclassification is an SAP JVA process that enables you to:

o Create an accounting record of cash call payments in the month when they are
received
o Apply cash call payments in the month when expenditures are incurred
o Match payments and expenditures even though they occur in different
accounting periods and the payment actually precedes the expenditure

Expenditure (Cutback )

The operating partner of a joint venture carries all of the operating costs of that venture
throughout the accounting period. At the end of the accounting period, the expenditures
made by the operating partner are apportioned to the non-operating partners as well as
to the operator of the venture according to their equity shares. This process is referred to
as cutback.

The transactions on the partner account are summed by venture, equity group, and (in North
America) billing month. If a balance exists, all the original transactions are cleared, and a new
open item is posted for the remaining balance.

Partner netting may be run for the current or the previous operations month.

Billing and Operations Month

Billing Month

The billing month is the month in which a cash call request appears on a partner’s bill.
The billing month value is stored in the baseline date field. The value is derived from the
baseline date default on the payment terms assigned to the accounts receivable
customer record. The billing month appears in the FB01 Standard Expense Posting
document Ref. 2 field. In addition to playing a key role in reclassifying cash call
payments, billing month and operations month also affect other processes, such as
netting and billing.

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 Operations Month

The operations month is the future month in which a cash call payment is matched
against the actual expenditures and reported on the customer’s bill. All cash call
payments not already reclassified with an operations month equal to or less than the
current month are included in the reclassification process. The value is derived from user
input on the cash call screen. The operations month appears in the FB01 Standard
Expense Posting document Ref. 1 field.

In addition to playing a key role in reclassifying cash call payments, billing month and
operations month also affect follow-on processes, such as netting and billing.

Billing month and operations month make it possible to create an accounting record of cash call
payments in the month they are received, yet apply these payments during the month (usually
later) the expenditures, for which the cash call was issued, are incurred. SAP JVA accomplishes
these two tasks by recording payments in the billing month when they were submitted and
applying these payments to expenditures in the operations month, when the expenditure is
incurred. By retaining these two dates for the life of the cash call record, SAP JVA can perform
the appropriate process at the proper time.

In addition to playing a key role in reclassifying cash call payments, billing month and operations
month also affect follow-on processes, especially netting. All related transactions (cash calls,
cash call payments, and cash call reclassifications) are assigned the same billing and operations
months, so the transactions can be grouped together for billing, convenience netting, and partner
netting. In this way, the billing and operations months identify:

• Cash calls and payments for the current billing month that should be included in convenience
netting

• Open cash call items that should be cleared in the operations month by partner netting

You can decide to use both the operational month and billing month. The
operational month and billing month in clearing documents is then transferred
from the original open item to the clearing document. This means those fields
split the clearing lines. In FI, the fields are stored in XREF1 (operational month)
and XREF2 (billing month).

SAP FI can be customized to do the split by those fields. It is important to note

that this customizing is company independent. If the operational month and
billing month are to be used in JVA, use the following menu paths in the IMG:

On the Display structure menu, choose Financial Accounting -> General Ledger
Accounting -> Business Transactions -> Open Item Clearing -> Define Clearing
Rules.

On the Display structure menu, choose Financial Accounting -> General Ledger
Accounting -> Business Transactions -> Open Item Clearing -> Assign Clearing
Rules to Account Types.

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Partner and Convenience Netting: Prerequisites
Purpose
The SAP FI elements used by partner and convenience netting can be divided into two
categories, customary SAP FI configuration and clearing-related configuration.

Customary SAP FI Configuration

To enable SAP Joint Venture Accounting (JVA) to process netting clearances of actual
expenditures, you must configure the following objects and accounts in SAP FI:

• Field status groups

• Posting keys

• Special general entry indicators (SEIs)

• Partner reconciliation accounts

• Document type

The SAP client that contains JVA is preconfigured with the SAP FI objects and accounts as well
as with the SAP JVA objects needed to execute cash calls.

Field Status Groups

SAP FI field status groups control the number of fields available for entry (either Required,
Optional, or Suppressed) during SAP FI postings when they are assigned to general ledger
accounts and posting keys. The field status groups assigned to accounts used for SAP JVA
partner and convenience netting should make the SAP JVA fields available for entry. Either
optional or required must be selected.

Posting Keys

You must configure the posting keys for SAP JVA partner and convenience netting to allow the
use of SEIs, so that postings, created by netting, can be matched and cleared within the general
ledger accounts.

SEIs

SEIs are assigned to posting keys. The SEIs identify alternative reconciliation accounts used to
post special transactions (such as cash calls or partner and convenience netting). The SEIs used
to post cash call requests and follow-on processes like netting to partner accounts, whether in
A/R or A/P, must be configured so that transactions are booked with the baseline date field. The
baseline date is used to track the billing month for the cash call and distinguish it from the
operations month. The SEIs used for cash call transactions and follow-on processes like netting
should require that the baseline date be entered on the entry screen. These same SEIs must also

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be identified during SAP FI payment program configuration as used in capturing special general
ledger transaction payments for the company.

SAP FI Account for the Partner

To support processing of SAP JVA posted entries within SAP FI, you must create either a
customer account in SAP FI Accounts Receivable (A/R) or a vendor account in FI Accounts
Payable (A/P) for each SAP JVA partner. Whether you should set up only an A/R account or both
an A/R and an A/P account for an SAP JVA partner is determined by how the partner participates
in joint ventures and the type of postings that will be made to the partner.

Customer Account in SAP FI A/R

To allow you to post amounts due for monthly billing, cash calls, or partner netting to SAP JVA
partners, every SAP JVA partner must have a customer account in A/R. This A/R customer
account must access a reconciliation account that is assigned a field status group, which allows
the input of the field groups Joint Venture Account Assignment and Joint Venture Billing Indicator.

Vendor Account in SAP FI A/P

If the partner is also an operator in non-operated ventures or the partner is subject to

convenience netting, used in the United States and Canadian regions, you must create a vendor
account for the partner in A/P in addition to the A/R customer account. In this case, the field
Vendor must contain the name assigned to the partner in SAP JVA.

Clearing-Related Configuration

To enable both partner and convenience netting to post clearing entries to SAP FI, and to enable
convenience netting to post credit amounts to partners in SAP FI, your implementation team must
set up the following types of procedures for clearing and for posting credit balances for SAP JVA
postings in SAP FI:

• Clearing posting keys

• Payment program configuration

Clearing Posting Keys

SAP FI clearing procedures are sets of posting keys used for various types of clearing postings.
SAP JVA posting rules refer to SAP FI clearing procedures and the posting keys specified in
these clearing procedures. The posting keys used for these clearing procedures must be
configured with the correct SEIs and field status groups, as described above.

Each clearing procedure includes a specification for both debit and credit posting keys to be used
for postings to A/R, A/P, and general ledger accounts. The specification for A/R and A/P postings
includes debit and credit posting keys for the three types of postings: clearing entry; residual item;
and special general ledger transaction.

Since SAP JVA makes use of special general ledger entry indicators, the posting keys specified
in the clearing procedure for special general ledger transactions are used for SAP JVA postings.

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The SAP JVA posting rules identify the SAP FI clearing procedure that applies to a particular type
of SAP JVA posting. Partner netting makes use of the clearing procedure called JVACLEAR to
post a single summary entry to the partner’s A/R account. Convenience netting uses the clearing
procedure called JVAPAYMT to post a residual credit balance to the partner’s A/P account.

Payment Program Configuration

SAP FI payment program configuration involves identifying the SEIs to be used in capturing
special general ledger transaction payments for the company.

These SEIs must be identified with the company’s payment program to enable the SAP JVA
posting rules for partner and convenience netting to be booked to the partner account with the
baseline date field. The baseline date provides the billing month in which a cash call is issued. In
cash call transactions and all follow-on processes, such as partner and convenience netting, this
field distinguishes the billing and operations months.

The system requires the baseline date field for all payment transactions. Therefore, the SEIs
determine the availability of the baseline date on the screen, and the usage of the billing month in
cash call processing.

SAP JVA Master Data Prerequisites

As part of the company set-up within SAP JVA, you activate the following:

• Operational and billing month

Activating operational and billing month processing is part of specifying the company global
parameters in SAP JVA configuration (United States and Canadian regions only). You can
activate operational and billing month processing for your company by selecting the field entitled
Op. and Bill M. Act.

• The partner in SAP JVA

In addition to setting up a customer account in SAP FI A/R and a vendor account in SAP FI A/P, if
the partner’s account is subject to convenience netting, you have to activate the customer and
vendor in SAP JVA by maintaining the SAP JVA partner table.

• Partner for convenience netting if appropriate

In addition to setting up the partner record in SAP JVA, select the convenience netting indicator C
for the partner, if the partner will be subject to convenience netting. The partner must also have a
vendor record to be used in the accounts payable transaction produced by convenience netting.

Menu Path

To access the global parameters screen for your company to activate operations and billing
month processing, follow these steps:

1. On the Display structure menu in the IMG, choose Joint venture accounting →
Environment → JVA Company Configuration → Global Data.

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 2. On the JV Global Company Parameters: Overview screen, place the cursor in the
company code field for your company and choose Detail, to access the JV Global
Company Parameters: Details screen for your company. On this screen, you should
activate the Op. & Bill M. Act flag to initiate operations and billing month processing.

To access the partner master record screen to activate partners for convenience netting, follow
this menu path:

1. On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Business partners → JV partners → Change.

The Enter company code dialog box appears.

2. Enter the Company code.

On the Change View "Partner": Overview screen, enter the information required for the partner

To access the partner master record screen to activate partners for convenience netting, follow
this menu path:

1. On the SAP Easy Access menu, choose Joint venture accounting → Master data →
Business partners → JV partners → Change.
2. On the Change View Partner: Overview screen, enter the information required for the
partner.

Executing Partner Netting

Prerequisites

Partner and Convenience Netting Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Netting → Partner netting.

The Partner Netting screen appears.

Procedure
1. Enter the Company code on the Partner Netting screen.

2. Enter the Operations month (MMYYYY) only if you want to change the defaulted date.

3. Enter the Fiscal year.

4. Enter the Period.

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5. Select from the Processing options (Batch process update, Keep batch input).

6. Choose the Execute function. The Partner-Netting - Open Items Clearing Report appears.

Executing Convenience Netting

Prerequisites

Partner and Convenience Netting Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Netting → Convenience netting.

The Convenience Netting screen appears.

Procedure
1. Enter the Company code on the Convenience Netting screen.

2. Enter either a P for partner or a V for venture in the joint venture invoice Level field. This
determines whether an invoice is generated for a partner for all the ventures or whether one is
created for each venture.

3. Enter the Billing month (MMYYYY) only if you want to change the defaulted date.

4. Enter the Fiscal year.

5. Enter the Period.

6. Select from the Processing options (Batch process update, Keep batch input).

7. Choose the Execute function. The Convenience -Netting - Applicable Open Items statement
appears.

Executing Billing
Definition
At the end of an accounting period, the joint venture operator recovers venture costs from the
non-operating partners. The SAP Joint Venture Accounting (JVA) Billing program is designed to
extract relevant billing information from the SAP JVA databases, and to issue invoices and
supporting documents to non-operating venture partners.

The documents may include some or all of the following:

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 • Invoice for expenses either at the partner or venture level
• Operating expense statement
• Expenditure report
• Supplemental detail

When executed for the period, the billing program uses the SAP JVA billing indicator, assigned to
the entries at posting, to extract the information for the invoice and billing statement. The recovery
indicator assigned to entries at posting is used to extract information for the expenditure detail.

JVA Ledgers

Billing Information JVA Ledger

Invoice and billing statement data Billing Ledger
Expenditure detail Summary Ledger

You can configure the billing program to produce paper or EDI invoices. The layouts are
controlled by SAPscript.

Current Period/Year to Date/Inception-to-Date

International region companies can execute billing either for current period, year to date, or from
inception-to-date amounts. International region companies are also required to provide partners
with billing or cash statements along with invoices. Canadian and US region companies have the
same functions with the exception of inception to date billing.

Billing and Other Month End JVA Processes

The billing program is run at the end of the accounting period, after the other month end
processes, such as cutback and partner netting or convenience netting.

Executing Billing: Prerequisites

Purpose
Prerequisites in FI

To process SAP Joint Venture Accounting (JVA) posted entries within SAP FI and to facilitate
SAP JVA Billing, you must create at least the following two accounts:

• Customer account for partners in SAP FI Accounts Receivable (A/R)

• Vendor account for the operator in SAP FI Accounts Payable (A/P)

Company Set up Decisions in SAP JVA

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To enable SAP JVA Billing, your implementation team must assign a billing structure for your
company in the company detailed data screen of SAP JVA configuration. You can assign only
one billing structure to each company.

The billing structure contains the definition for the different possible types of billing documents,
such as invoice, statement, expenditure detail, and supplemental detail. You define the billing
structure and the billing documents as you configure billing.

Setting up JVA Master Data Objects

Your implementation team must configure recovery indicators and billing indicators in SAP JVA.

Recovery Indicators

Recovery indicators are SAP objects with an attribute indicating whether or not an expense is
billable. If an SAP FI expense posting should be forwarded to SAP JVA, a recovery indicator is
attached to the posting at entry. When a posting that will be forwarded to SAP FI is generated in
SAP JVA, it is also assigned a recovery indicator.

To facilitate this transfer of expense postings between SAP FI and SAP JVA, you must set up
appropriate recovery indicators in both SAP JVA and SAP FI. Recovery indicators are company
specific.

Billing Indicators

Billing indicators are defined as part of SAP JVA configuration. Billing indicators can be assigned
to partner related postings and identify the type of posting involved, such as cash call, normal
expenditure, or audit adjustment. You use billing indicators to assign different types of billable
expenditures on the invoice.

Billing indicators are client specific, so any user of any company in the same SAP client can use
any billing indicator set up within that client.

Recovery and Billing Indicators are Master Data Objects in SAP JVA

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Configuration Requirement for SAP JVA Billing

For the invoice, the statement, and the expenditure detail, you should execute the following steps:

1. Define the billing structure for your company

2. Maintain the layout sets for billing documents
3. Assign the layout sets to your company’s billing structure
4. Map expenditures to the invoice and statement by billing indicator
5. Define the sequence of formatting events to be used in generating billing documents
6. Assign the billing structure to your company

Configuring Supplemental Detail

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In addition to defining the configuration settings for the invoice and the expenditure detail report,
you must configure supplemental detail reports for either the invoice or the expenditure detail
report. The supplemental detail report supplies additional detailed billing expense information for
these two billing documents.

You must complete the following steps to configure supplemental detail:

1. Assign the supplemental detail to the billing structure

2. Define the billing levels and supplemental detail sets (SDS) required for the supplemental
detail report
3. Add text elements for the supplemental detail to the layout set for the invoice or
expenditure detail
4. Link the supplemental detail text elements to the billing levels through Layout Set
Assignment.
5. Define the drivers that trigger the supplemental detail for the invoice or expenditure

Menu Paths

To Assign Billing Structure

1. On the Display structure menu in the IMG, choose Joint venture accounting →
Environment → JVA Company Configuration → Environment → Detailed Data.
2. Enter your company code in the dialog box that appears and press ENTER. The Change
View Company Code: Details screen appears.

To Define Billing Indicators

On the Display structure menu in the IMG, choose Joint venture accounting → Master Data →
Billing Indicator → Master Data.

To Define Billing Structure

On the Display structure menu in the IMG, choose Joint venture accounting → Billing →
Operated → Billing Structure.

To Maintain Layout Sets

On the Display structure menu in the IMG, choose Joint venture accounting → Billing →
Operated → Layout Sets → Layout Set Maintenance.

To Assign Layout Sets

On the Display structure menu in the IMG, choose Joint venture accounting → Billing →
Operated → Layout Sets → Layout Set Assignment.

To Assign Billing Levels to an SDS

Choose the SDS, to which billing levels are to be assigned, on the Change View SDS for Billing:
Overview screen and choose Goto → Details.

To Assign Drivers to SDSs

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On the Display structure menu in the IMG, choose Joint venture accounting → Joint Venture →
Environment → Configuration → Billing → Operated → Supplemental Detail → Supplemental
Driver.

To Define Billing Formats

On the Display structure menu in the IMG, choose Joint venture accounting → Billing →
Operated → Billing Formats.

If partner based billing has been selected, each partner can have a different billing
format. If venture based billing is selected, all partners sharing the venture will have the
billing format assigned to that venture. Define the Invoice Level by following this menu
path:

On the Display structure menu in the IMG, choose Joint venture accounting → Billing →
Operated → Billing structures.

Drill down on a billing structure. Use the pull-down menu to select Partner or Venture.

To Assign the Billing Format:

On the SAP Easy Access menu, choose Joint venture accounting → Master Data → Business
partners → JV partners → Maintain.

The BFor is the Billing format field.

To Assign a Layout Set to a New Billing Format

1. On the Display structure menu in the IMG, choose Joint venture accounting → Billing →
Operated → Billing formats.

On the Billing formats: Overview screen, choose the new billing format and choose format type
assignment.

Extracting an Invoice/Statement
Prerequisites

Executing Billing: Prerequisites

Menu Path

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On the SAP Easy Access screen, choose Joint venture accounting → Periodic processing →
Billing → Extract inv./statem.

The Billing data selection: Invoice/Statement screen appears.

Procedure
1. Enter the Company code on the Billing data selection: Invoice/Statement screen.

2. Enter the Joint venture and Partner information (both fields are optional).

3. Enter the Fiscal year.

4. Enter the Accounting period.

5. Choose the Execute function. The Billing extract (invoice/statement) appears.

Extracting Expenditure/Supplemental Detail

Prerequisites

Executing Billing: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Billing →. Extract exp. detail.

The Billing data selection: Expenditure detail/supplemental detail screen appears.

Procedure
1. Enter the Company code on the Billing data selection:Expenditure detail/supplemental detail
screen.

2. Enter the Joint venture and Partner information (both fields are optional).

3. Enter the Fiscal year.

4. Enter the Accounting period.

5. Choose the Execute function. A screen copy of the Billing extract (expenditure detail) appears.

Executing Hard Copy Billing

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Prerequisites

Executing Billing: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Billing → Hard copy billing.

The Billing output: Hard copy billing screen appears.

Procedure
1. Enter the Company code on the Billing output: Hard copy billing screen.
2. Enter the Joint venture and Partner information (both fields are optional).
3. Enter the Fiscal year.
4. Enter the Accounting period.
5. Change the Invoice date only if it differs from the default date.

Currency rate conversions are also based on the rate at the date entered in the Invoice
date field. If the rate is based on a date different than the default date, that date should
be specified in this field.

6. Choose the Execute function. The Billing extract (expenditure detail) appears.
7. Choose an appropriate Printout selection.
8. Choose the appropriate Form generation parameters for your printout.

Executing EDI Billing-Creating Outbound IDoc

Prerequisites

Executing Billing: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Billing →. EDI billing → Create outbound IDoc.

The JV EDI Billing screen appears.

Procedure

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 1. Enter the Company code on the JV EDI Billing screen.
2. Enter the Fiscal year.
3. Enter the Accounting period.
4. Choose the Execute function. The JV EDI Billing - Control Report appears.

Executing EDI Billing-Release Outbound IDoc

Prerequisites

Executing Billing: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Billing → EDI billing → Release outbnd IDoc.

The Process all selected IDocs (EDI) screen appears.

Procedure
1. Enter the IDoc number or range of numbers.

2. Enter the Output mode.

3. Choose EXECUTE.

To view an IDoc status report follow this menu path:

SAP Easy Access menu → Tools → Administration → Management → Process

technology → IDoc → Monitoring → IDoc lists

Choose EXECUTE.

Executing EDI Billing-Partners Processed

Prerequisites

Executing Billing: Prerequisites

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Billing → EDI billing → Partners processed.

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The Enter company code dialog box appears.

Procedure
1. Enter the Company code on the Enter company code dialog box.

2. Choose ENTER. The Change View "JV EDI Processed Partners/Ventures" Overview screen
appears.

Executing Dunning
Use
You can specify the summary level at which dunning should be applied as part of SAP JVA
configuration in the IMG.

Menu Path

On the Display structure menu in the IMG, choose Joint venture accounting → Billing → Dunning.

The Dunning Customizing: Overview screen appears.

Procedure
1. In the Sum. Field, enter one of the following settings to indicate the level at which
dunning should be applied:

Level Description

VNAME Joint Venture

EGROUP Equity Group

BTYPE Billing Indicator

XREF1 Operations Month

XREF2 Billing Month

2. Select the Summarize indicator, if information should be summarized at this level for
dunning.
3. Select the Subtotal indicator if you need a subtotal of information at this level for dunning.

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Executing Dunning
Use
You can specify the summary level at which dunning should be applied as part of SAP JVA
configuration in the IMG.

Menu Path

On the Display structure menu in the IMG, choose Joint venture accounting → Billing → Dunning.

The Dunning Customizing: Overview screen appears.

Procedure
1. In the Sum. Field, enter one of the following settings to indicate the level at which
dunning should be applied:

Level Description

VNAME Joint Venture

EGROUP Equity Group

BTYPE Billing Indicator

XREF1 Operations Month

XREF2 Billing Month

2. Select the Summarize indicator, if information should be summarized at this level for
dunning.
3. Select the Subtotal indicator if you need a subtotal of information at this level for dunning.

Lockbox Processing of SAP JVA Partner Bills

Use
You can process SAP Joint Venture Accounting (JVA) billing generated invoices for partners with
lockbox functions. The lockbox file for SAP JVA invoices should contain one line item, consisting
of the invoice number for the partner used by SAP JVA billing. SAP JVA billing generated invoice
numbers are composed in the following way:

• MMYYYYCCCC, where MM is the month, YYYY is the year, and C is a single character
of the SAP JVA partner's code.

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Lockbock uses the SAP JVA invoice number to derive additional billing information in the
following manner:

1. Lockbox identifies all recovery indicators (RI) for which the billing indicator is set to active
in SAP JVA master data configuration. The partner's portion of all expense lines posted
with one of these RIs are included in calculating the partner's total bill.
2. Lockbox then uses the SAP JVA invoice number to derive the accounting period, fiscal
year, and partner number.

3. Finally, the RIs identified in Step 1 are used to select all open items posted to the partner
for the accounting period and fiscal year for further lockbox processing.

Equity Change Management

Definition

Equity adjustment covers several business processes that require the creation of new
equity groups (or movements from one or more equity groups to another) and different
handling for historical cost.
Every posting to the SAP Joint Venture Accounting (JVA) ledger is assigned to a
combination of a joint venture and an equity group. The equity group contains all the
partners‘ percentage ownership shares. When an expense is booked in FI to a cost object
(such as a cost center or a work breakdown structure), that expense is also booked in the
SAP JVA ledger as well as in CO. In the SAP JVA ledger, the expense is assigned to the
joint venture identified on the cost object and to the equity group that owns the venture.

Use

The document date is used together with the equity type on the cost object to identify the
equity group that owns the joint venture when the expense document is recorded. The
expense is then assigned to this equity group in the SAP JVA ledger.
During a single accounting period, multiple equity groups might have ownership of the
same joint venture for a specific equity type. Depending on the changes in equity group
during the accounting period, records posted to the same joint venture with different
document dates can be assigned to different equity groups in the SAP JVA ledger.
For cutback and billing purposes, all records posted to a joint venture during an
accounting period should be assigned to the equity group that owns the venture at the end
of the period. If you run the SAP JVA month end processes (especially cutback and
billing) without reconciling any ownership changes, you could incorrectly charge a
former owner for expenses.
The SAP JVA month end process, equity change management, reconciles ownership
changes, by reassigning records to the equity group that owns the venture at the end of
the period. Depending on whether or not you choose to run equity change management
before or after final cutback, you can execute one of the following processes to handle
equity group changes during an accounting period:
• Pre-cutback equity change management

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 • Prior period equity adjustment
SAP JVA enhanced its equity adjustment capabilities to provide additional functions that
cover farm-in and farm-out, and redetermination business processes.

Structure
Equity Change Management

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Managing Equity Changes

Prerequisites

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Menu Path

On the SAP Easy Access menu, choose Accounting → Joint Venture Accounting →
Periodic processing → Prior equity adjstmt.
The Prior period equity adjustment screen appears.

Procedure
...

1. Enter the Company Code on the Prior period equity adjustment screen.
2. Enter the Venture.
3. Enter the Old Equity Group.
4. Enter the New Equity Group.
5. Enter the Adjustment Period.
6. Enter the Posting Period.
7. Choose the Processing Option.
8. Choose EXECUTE. The Equity Adjustment Detail Report appears.

Farm-in/Farm-out/Redetermination

Use

Enhancements to the SAP Joint Venture Accounting (JVA) equity adjustment capabilities
include the following five transactions:
1. • Process Description (GJFARM_0)
Allows you to define the farm-in, farm-out, and redetermination process
2. • Equity Change for posting Ledger and Cutback (GJFARM_1)
Allows you to adjust the summary ledger entries and carry out cutback
3. • Cutback Correction (GJFARM_2)
Allows you to carry out a cash call correction
4. • Change for Billing Ledger (GJFARM_3)
Allows you to adjust the billing ledger entries
5. • Cash Call Correction (GJFARM_4)
Allows you to carry out a cutback correction (for intercompany ventures)

Menu Path
On the SAP Easy Access menu, choose Accounting → Joint Venture Accounting → Periodic
processing → Farm in/out & Re-determination.

Farm-in and Farm-out

The farm-in and farm-out process is usually a deal between two partners in the joint
venture, where payment or earn-in takes place directly between the buyer and seller, and
the license is not involved. The operator must present a statement reflecting the new

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situation, as one partner has taken over the financial values (total expenditure and total
cash paid).
Redetermination
Redetermination is a process that takes place when new technical information reveals that the
original unitization of the block or licenses needs to be redistributed among the equity holders.
This redetermination process results in a new set of owner percentages, based on the rules in the
joint operating agreement, which require an inception-to-date (ITD) equity adjustment.

Updating Company Codes Periodically

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing →
Company periodic upd.

The Enter Company code dialog box appears.

Procedure
1. Enter the company code on the Enter Company code dialog box.

2. Choose ENTER. The Periodic updates for company code screen appears.

3. Enter data in the following fields if you need to change the default data:

From year

From period

To year

To period

Standard payment rate

4. Choose EXECUTE. A system message confirms that the periodic values for the company code
are updated.

Carrying Year End Balances Forward

Prerequisites
Menu Path

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On the SAP Easy Access menu, choose Joint venture accounting → Periodic processing → YE
balnce carry fwrd.

The JVA GL-X Carry Forward Program-RGJVCF00 (JVA GL-X ledgers only) screen appears.

Procedure
1. Enter the company code on the JVA GL-X Carry Forward Program-RGJVCF00 (JVA GL-X
ledgers only) screen.

2. Enter the Past Fiscal Year.

3. Choose EXECUTE. The JVA GL-X Carry Forward Program - RGJVCF00 (JVA GL-X ledgers
only) summary, appears.

Reporting - Information System

The following section provides information about:

• SAP Joint Venture Accounting (JVA) Reports

• Master Data Reports
• Displaying and Comparing Company Documents
• Supporting JVA Audits
• Displaying SAP JVA Process History
• Printing Allocations
• Executing EDI Reports

Joint Venture Accounting (JVA) Reports

Definition
SAP JVA reports are organized into seven areas:

• Master data

• Documents

• Line items

• Summary ledger

• Billing ledger

• Controlling (CO module)

• Billing extracts

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From these primary areas, you can access additional reporting options.

Master Data Reports

Use
You can run the following five master data reports:

• Joint Operating Agreement (JOA) Master Data Catalog Report

• JOA Detailed Information Report

• Joint Venture Master Data Catalog Report

• Joint Venture Detailed Information Report

• List Venture/Equity Groups Report

Displaying the JOA Master Data Catalog Report

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Master data → JOA catalog.

The Joint Operating Agreement master data catalog screen appears.

Procedure
1. Enter the Company code on the Joint Operating Agreement master data catalog screen.

2. Choose EXECUTE.

Displaying the JOA Detailed Information Report

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Master data → JOA catalog.

The Joint Operating Agreement master data catalog screen appears.

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Procedure
1. Enter the Company code on the Joint Operating Agreement master data catalog screen.

2. Choose EXECUTE.

Displaying the Joint Venture Master Data Catalog

Report
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Master data → JOA catalog.

The Joint Operating Agreement master data catalog screen appears.

Procedure
1. Enter the Company code on the Joint Venture master data catalog screen.

2. Choose EXECUTE.

Displaying the Joint Venture Detailed Information

Report
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Master data → JOA details.

The Joint Venture Detailed Information screen appears.

Procedure
1. Enter the Company code on the Joint Venture Detailed Information screen.

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2. Choose EXECUTE.

Displaying the List Venture/Equity Groups

Report
Procedure
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Master data → List venture equity groups.

The OPER Venture-EG List screen appears.

Procedure
1. Enter the company code on the OPER Venture-EG List screen.

2. Enter the Joint Venture.

3. Choose EXECUTE.

Document Reports
Use
You can display the following two document reports:

• Reporting Account Documents for Local Ledgers

• Comparing SAP FI and Joint Venture Documents

Reporting Account Documents for Local

Ledgers
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Documents → Display documents.

The Display Local Actual Documents: Selection screen appears.

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Procedure
1. Enter the Document number range

2. Enter the Fiscal year

3. Enter the Ledger.

4. Enter the Company code

5. Enter the Document cat.

6. Choose EXECUTE.

Comparing SAP FI and Joint Venture

Documents
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Documents → Compare documents.

The Compare FI/CO/MM document and JV document screen, appears.

Procedure
1. Enter the Company code.

2. Enter the Document year.

3. Enter the document number ranges in the appropriate fields:

FI document number

CO document number

MM document number

4. Select the appropriate Processing options.

5. Choose EXECUTE.

Line Items Reports

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Use
You can display the following two line items reports:

• Summary Ledger Line Items

• Billing Ledger Line Items

Reporting Summary Ledger Line Items

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → Line
items → Summary ledger line items.

The Summary ledger line items screen appears.

Procedure
1. Enter the List variant.

2. Enter the Ledger.

3. Enter the Fiscal year.

4. Enter the Posting period.

5. Enter the Company code.

6. Choose EXECUTE.

Billing Ledger Reports: Display

Use
You can display the following three billing ledger reports:

• Venture/Equity Group/Billing Indicator

• Partner/Billing Indicator

• Display Billing Ledger Totals

Summary Ledger Reports

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Use
You can display the following six summary ledger reports:

• Gross Billable/All by Venture/Account

• Gross Billable/All by Cost Object

• Gross Billable/Partner Net by Cost Object

• Gross Billable/All by Cost Object Funding Currency

• Gross Billable/Partner Net for JIB

• Remaining Cutback by Cost Object

Reporting Gross Billable/All by Venture/Account

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Summary ledger → Gross bill./all by venture/account.

The Gross bill./all by venture/account: Selection screen appears.

Procedure
1. Enter the Company code.
2. Enter the Year.
3. Enter the Period.
4. Choose one of the following options:
5. Accept the defaults in the Recovery indicator and Venture fields

• Delete both the defaults in the Recovery indicator and Venture fields.
• Enter a two digit RI code in the Or value(s) fields.

Choose EXECUTE.

Reporting Gross Billable/All by Cost Object

Prerequisites
Menu Path

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On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Summary ledger → Gross billable / all by cost object.

The Gross billable / all by cost object: Selection screen appears.

Procedure
1. Enter the Company code.

2. Enter the Year.

3. Enter the Period.

4. Choose one of the following options:

• Accept the defaults in the Venture, Accounts, Cost center, Internal order, WBS elements,
Network, and Recovery indicator fields.
• Delete the defaults. Enter code in the Or value(s) fields. For example, you can enter a
two digit Recovery indicator code, such as BI.

5. Choose EXECUTE.

Reporting Gross Billable/Partner Net by Cost

Object
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Summary ledger → Gross bill/partner net by cost obj.

The Gross bill/partner net by cost obj.: Selection screen appears.

Procedure
1. Enter the Company code.

2. Enter the Year.

3. Enter the period.

4. Choose one of the following options:

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 • Accept the defaults in the Venture, Accounts, Cost center, Internal order, WBS elements,
Network, and Recovery indicator fields.
• Delete the defaults. Enter a code in the Or value(s) field. For example, you can enter a
two digit Recovery indicator code, such as BI.

Choose EXECUTE.

Reporting Gross Billable/All by Cost Object

Funding Currency
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Summary ledger → Gross bill./all by cost obj. F. Curr.

The Gross bill./all by cost obj. F. Curr: Selection screen appears.

Procedure
1. Enter the Company code.

2. Enter the Year.

3. Enter the Period.

4. Choose one of the following options:

• Accept the defaults in the Venture, Accounts, Cost center, Internal order, WBS elements,
Network, and Recovery indicator fields.
• Delete the defaults. Enter code in the Or value(s) field. For example, you can enter a two
digit RI code, such as BI.

5. Choose EXECUTE.

Reporting Gross Billable/Partner Net for JIB

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Summary ledger → Gross billable/partner net for JIB.

The Gross billable/partner net for JIB: Selection screen appears.

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Procedure
1. Enter the Company code.

2. Enter the Year.

3. Enter the Period.

4. Enter the JIB/JIBE Class.

5. Choose one of the following options:

• Accept the defaults in the Venture, Accounts, Cost center, Internal order, WBS elements,
Network, and Recovery indicator fields.
• Delete the defaults. Enter code in the Or value(s) field. For example, you can enter a two
digit RI code, such as BI.

6. Choose EXECUTE.

Reporting the Remaining Cutback by Cost

Object
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Summary ledger → Remaining cutback by cost object.

The Remaining cutback by cost object: Selection screen appears.

Procedure
1. Enter the Company code.

2. Enter the Year.

3. Enter the Period.

4. Choose one of the following options:

• Accept the defaults in the Venture, Recovery indicator, Cost center, Accounts, Internal
order, WBS elements, and Network fields.

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 • Delete the defaults. Enter code in the Or value(s) field. For example, you can enter a two
digit RI code, such as BI.

5. Choose EXECUTE.

Reporting Billing Ledger Line Items

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → Line
items → Billing ledger line items.

The Billing ledger line items screen appears.

Procedure
1. Enter the List variant.

2. Enter the Fiscal year.

3. Enter the Posting period.

4. Enter the Company code.

5. Choose EXECUTE.

Displaying the Venture/Equity Group/Billing

Indicator Report
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → Billing
ledger → Venture/EG/Billing indicator.

The Venture/EG/Billing indicator: Selection screen appears.

Procedure
1. Enter the Company code.

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 2. Enter the Year.
3. Enter the Period.
4. Choose one of the following options:

• Accept the defaults in the Venture, Partner, and Billing indicator fields
• Delete the defaults. Enter code in the Or value(s) field. For example, you can enter a two
digit billing indicator code, such as 01.

1. Choose EXECUTE.

Displaying the Partner/Billing Indicator Report

Prerequisites
Menu Path

On the SAP Easy Access screen, choose Joint venture accounting → Information system →
Billing ledger → Partner/Billing indicator.

The Partner/Billing indicator: Selection screen appears.

Procedure
1. Enter the Company code.
2. Enter the Year.
3. Enter the Period.
4. Choose one of the following options:

• Accept the defaults in the Venture and Billing indicator fields

• Delete the defaults. Enter a code in the Or value(s) field. For example, you can enter a
two digit billing indicator code, such as 01.

1. Choose EXECUTE.

Displaying Billing Ledger Totals

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → Billing
ledger → Display billing ledger totals.

The Summary Records from Table JVT02 screen appears.

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Procedure
1. Enter the Fiscal year.
2. Enter the Company code.
3. You can limit your search by completing the following optional fields:

Joint venture

Equity group

Partner

Billing indicator

WBS element

PP diff-OM

Delta invoice month

Transaction currency

Debit/credit ind.

4. Select Transaction currency, Local currency, or Ledger currency.

5. Choose EXECUTE.

Running Billing Extracts

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → JVA
audit support → Billing extracts.

The Billing extracts screen appears.

Procedure
1. Enter the Company code on the Billing extracts screen.

2. Enter the Fiscal year.

3. Enter the Posting period.

4. Choose the Type of billing extract (Hard copy billing extracts or EDI billing extracts).

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5. Choose EXECUTE.

Master Data Reports

Use
The following reports help you analyze SAP Joint Venture Accounting (JVA) master data:

• JOA catalog
• JOA details
• Venture catalog
• Venture details
• List venture equity groups

Running the Joint Operating Agreement (JOA)

Catalog Report
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Master data → JOA catalog.

The Joint Operating Agreement master data catalog screen appears.

Running the Joint Operating Agreement (JOA)

Details Report
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture → Information system → Master data →
Venture details

The Joint Operating Agreement Detailed Information screen appears.

Procedure
1. Enter the Company code on the Joint Operating Agreement Detailed Information screen.

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You can specify additional selection parameters by completing the optional fields.

2. Choose EXECUTE. The Joint Operating Agreement Detailed Information report appears.

Running the Venture Catalog Report

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Master data → Venture catalog.

The Joint Venture master data catalog screen appears.

Procedure
1. Enter the company code on the Joint Venture master data catalog screen.

You can specify additional selection parameters by completing the optional fields.

2. Choose EXECUTE. The Joint Venture master data catalog report appears.

Running the Venture Details Report

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Master data → Venture details.

The Joint Venture Detailed Information screen appears.

Procedure
1. Enter the company code on the Joint Venture Detailed Information screen.

You can specify additional selection parameters by completing the optional fields.

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2. Choose EXECUTE. The Joint Venture Detailed Information Report appears.

Running the Venture Equity Groups Report

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Master data → List Venture EqtGrps.

The OPER Venture-EG List screen appears.

Procedure
1. Enter the company code on the OPER Venture-EG List screen.

2. Enter the Joint Venture.

3. Choose EXECUTE. The Venture Equity Group List report appears.

Displaying Documents
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Documents → Display documents.

The Display Local Actual Documents: Selection screen appears.

Procedure
1. Enter the document number range in the Doc. number fr. and Doc. number to fields.
2. Enter the Fiscal year.
3. Enter a Ledger.
4. Enter the Company code.
5. Choose Execute.

Comparing Documents
Prerequisites

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Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system
→ Documents → Compare documents.

The Compare FI/CO/MM document and JV document screen appears.

Procedure
1. Enter the company code on the Compare FI/CO/MM document and JV document screen.

2. Enter the Document year.

3. Enter the document number ranges in the appropriate fields:

FI document number

CO document number

MM document number

4. Select the appropriate Processing options.

5. Choose EXECUTE.

Creating JADE Audit Files

Use

In joint venture projects, certain countries require a full audit report that breaks down the
expenditure and working capital, based on the originating invoice. This report must also
correspond to the payment document.
SAP Joint Venture Accounting (JVA) allows you to display the original invoice,
outstanding (unpaid) working capital and actual payments, and reconcile these to billing.
The Joint Audit Data Exchange (JADE) report provides a detailed breakdown and
includes the following data:
1. • Employee number, work date, and hours
2. • Goods receipt document number (imported from MM)
3. • Goods receipt reference document number (imported from FI) if one exists, or
the controlling document
4. • Indicator for multiple invoice receipts for one goods receipt
5. • Vendor and customer number
6. • Vendor and customer name
7. • FI document header text

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8. • Clearing document number
9. • Quantity from the goods movement document
10. • General ledger account, cost center, order number, work breakdown schedule
(WBS) element, and cost element text
11. • Material description
12. • Short text of the cost object
13. • Purchase order
14. • Invoice receipt
15. • Cost object number and cost object text

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Accounting → Joint Venture Accounting →
Information system → JV audit support → Create JADE audit file.
The Jade File Generation for Auditing screen appears.

Procedure
...

1. Enter the Company code on the Jade File Generation for Auditing screen. To further
define your search, you can enter codes into the Venture and Equity Group fields.
2. Change the default Billing Period fields if your desired parameters are different from
those that appear in the fields From year and From period.

1. • In the JADE file parameters section of the screen, you can specify a Minimum
threshold amount. Any files with values less than the specified threshold amount will
not be included in the report. If you are exporting the report to your PC, designate a
name in the Filename field.
2. • In the Documents listed option section of the screen, you can accept the default
Non-zero balance period docs,which will retrieve all the posted documents from table
JS01 that do not summarize to a zero balance. Otherwise, you can select
All posting documents,which will retrieve all the posted documents from table JVS01
that meet the Main selection and Billing period criteria.
3. • To include non-billable amounts in the JADE report, select the non-billable items
checkbox.
3. You can enter Additional selection criteria data to further define your search.
4. Choose EXECUTE to display the JADE File report online. You can drill down on each
listing to view additional information.

Viewing Billing Extracts

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Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → JV
audit support → Billing extracts.

The Billing extracts screen appears.

Procedure
1. Enter the Company code on the Billing extracts screen.
2. Enter the Fiscal year.
3. Enter the Posting period.
4. Enter the Joint venture.
5. Select the Type of billing extract.
6. Choose EXECUTE to view the billing extracts. You can drill down on each listing to view
the expenditure detail.

Displaying Joint Venture Accounting (JVA)

Process History
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system →
Process history.

The Display event table screen appears.

Procedure
1. Enter the Company code on the Display event table screen.

2. You can accept the Period/year defaults or you can enter a different Period/year range.

3. Choose EXECUTE. The Display event table appears.

Printing Allocations for Joint Venture Accounting

(JVA)
Prerequisites

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Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → Print
allocation.

The Print of all Cycle Information for Joint Venture Accounting screen appears.

Procedure
1. Enter the Controlling Area on the Print of all Cycle Information for Joint Venture Accounting
screen.

2. Choose EXECUTE. The Print Parameters dialog box appears.

3. Enter the Output device.

4. Choose PRINT. The following system message appears: printing is carried out.

Electronic Data Interchange (EDI) Reports

Use
You can execute four types of SAP Joint Venture Accounting (JVA) EDI report:

• Reviewing intermediate documents (IDocs)

• IDoc statistics

• Displaying file status

• Inbound reports

The following EDI Inbound report options exist:

• The IDoc Status report lists all IDocs and their status messages.

• The Invoice report (810 transaction set) generates a hardcopy invoice from the data transmitted
on the sender's 810 invoice transaction set. It is used as supporting documentation for audit and
user inquiries about processing and payment of the sender's invoices.

• The Joint Interest Operating Statement report (819 transaction set) generates a hardcopy
expenditure detail from the data transmitted on the sender's 819 operating statement transaction
set.

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• The Unusual Expenditures report identifies unusual charges such as audit, retroactive, or prior
adjustments which may require additional review.

• The Memo AFE Projects Report monitors authorization for expenditures (AFE) in comparison to
the receiver‘s AFE threshold amount.

• The Expenditure Comparison Report identifies expenditure variances by service code. This
report compares current month activity (current operations month) to an average of the previous
month's operations month.

• The EDI Inbound Report (Cost Objects/Account Mappings) lists the 810 Invoice (Cost Object
Mapping/ Account Mapping), the 819 Expenditure detail (Cost Object Mapping/Account Mapping)
per company and the JIBE/PASC number.

• The 810 to 819 Property IDoc Comparison Report lists all properties for which an 819 is to be
send. It highlights the properties where no 810 and 819 exists.

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ Review IDoc

The IDoc lists screen appears.

Procedure
1. You can specify the parameters for your list on the IDoc Lists screen or continue directly
to step 2.
2. Choose EXECUTE. The IDoc list appears.

Displaying Intermediate Document (IDoc)

Statistics
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ IDoc statistics.

The IDoc Statistics screen appears.

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Procedure
1. Specify Program selection parameters on the IDoc Statistics screen.
2. Choose EXECUTE.

Displaying File Status

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ Display file status.

The Maintain Table Views: Initial Screen appears.

Procedure
1. Choose Enter.
2. The path name appears on the Display View "File Status": Overview screen.
3. Choose the Var. list function to proceed to the Print Format screen.
4. Choose Proceed.

Displaying the Intermediate Document (IDoc)

Status Report
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ Inbound Reports → IDOC Status Report.

The JV EDI Inbound: IDOC Status Report screen appears.

Procedure
1. Verify the Process and Sort Sequence settings on the JV EDI Inbound: IDOC Status
Report screen. You can change the defaults.

You can specify additional parameters on this screen to further define your search.

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 2. Choose EXECUTE.

Displaying the Invoice/Expenditure Statement

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ Inbound Reports → Invoice/Expend.Stmt.

The JV EDI Inbound: Invoice and Operating Statement screen appears.

Procedure
1. Verify the Process settings on the JV EDI Inbound: Invoice and Operating Statement
screen. You can change the defaults.

You can specify additional parameters on this screen to further define your search.

2. Choose EXECUTE.

Displaying the Unusual Expenditure Report

(819)
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ Inbound Reports → Unusual Expenditure.

The JV EDI Inbound: Unusual Expenditure Report (819) screen appears.

Procedure
1. Verify the Process settings on the JV EDI Inbound: Unusual Expenditure Report (819)
screen. You can change the defaults.

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 You can specify additional parameters on this screen to further define your search.

2. Choose EXECUTE.

Displaying the Memo Authorization for

Expenditure (AFE) Report
Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ Inbound Reports → Memo AFE Report.

The JV EDI Inbound: Memo AFE Projects screen appears.

Procedure
1. Verify the default settings on the JV EDI Inbound: Memo AFE Projects screen. You can
change the default settings.

You can specify additional parameters on this screen to further define your search.

2. Choose EXECUTE.

Displaying the Expenditure Comparison Report

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ Inbound Reports → Expend. Comparison.

The JV EDI Inbound: Expenditure Comparison Report screen appears.

Procedure
1. Verify the default settings on JV EDI Inbound: Expenditure Comparison Report screen.
You can change the default settings.

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 You can specify additional parameters on this screen to further define your search.

2. Choose EXECUTE.

Displaying the 810/819 Mapping Report

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ Inbound Reports → 810/819 Mapping Rpt.

The EDI Inbound Reports (Cost Objects/Account Mappings) screen appears.

Procedure
1. Check the default settings on EDI Inbound Reports (Cost Objects/Account Mappings)
screen. You can change the default settings.

You can specify additional parameters on this screen to further define your search.

2. Choose EXECUTE.

Displaying the 810/819 Property Error Report

Prerequisites
To display the 810/819 property error report, follow this menu path:

On the SAP Easy Access menu, choose Joint venture accounting → Information system → EDI
→ Inbound Reports → 810/819 Prop. Error.

The 810 to 819 Property IDoc Comparison Report screen appears.

Procedure
1. Verify the default settings on the 810 to 819 Property IDoc Comparison Report screen.
You can change the default settings.

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 You can specify additional parameters on this screen to further delineate your search.

2. Choose EXECUTE.

Controlling (CO) Planned Data

Use
You can use different plan versions within the special purpose ledger. Version numbers are used
to manage different plans. The plan integration from SAP CO into SAP Joint Venture Accounting
(JVA) is possible if the fiscal year variant in CO is identical to the fiscal year variant in SAP JVA.

Transferring SAP CO Planned Data into SAP

JVA
Prerequisites
You must configure two activities before you can transfer planned data from SAP Controlling
(CO) into SAP Joint Venture Accounting (JVA):

• Activate the plan integration in CO

• Activate plan version in SAP JVA

Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Environment → Data
Transfer → CO Plandata into JVA.

The Transfer CO Plan Documents to FI-SL screen appears.

Procedure
1. Enter the Controlling area.
2. Define your search by completing the following parameters:

Document Number

Fiscal year

Version

CO Activity

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 Posting date

Created on

Cost element

3. Select the appropriate Processing options.

4. Choose EXECUTE. The Re-post Plandata by Document Number list appears.

Archiving
Use
You can find background information about archiving features in the following chapters:

• Archiving JVA Bank Account Switching Data

• Archiving JVA Process Event Data
• Creating Joint Venture Data Archives
• Deleting Archived Data
• Reloading Data Archives
• Creating Billing Archives
• Deleting Archived Billing Data
• Reloading Billing Archives

Archiving JVA Bank Account Switching Data

Use
You archive data from table T8JVBA by using the archiving object JV_BANK_SW.

The tools include:

• An archiving program
• A deleting program for archived data
• A reloading program

Archiving Joint Venture Accounting (JVA)

Process Event Data
Use
You archive data from tables T8JEV, T8JEVP and T8JEVS by using archiving object JV_EVENT.

The tools include:

• an archiving program
• a deleting program for archived data

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 • a reloading program

Creating Joint Venture Data Archives

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Environment →Archiving →
JV Data → Create archive.

The Archive Administration: Create Archive Files screen appears.

Procedure
1. If you are going to use a variant, complete the Variant field on the Archive Administration:
Create Archives Files screen.

2. Choose the Start date function. The Start Time dialog box appears.

3. Choose the appropriate function to define the start time parameters from the following options:
Immediate
Date/Time
After job
After event
At operation mode

4. Complete the required fields on the parameter screens.

If you want to create archives periodically, follow these steps:

i. Choose the Immediate function on the Start Time dialog box.

ii. Select Periodic job.
iii. Choose the Period values function.
iv. Select the appropriate period:

Hourly
Daily
Weekly
Monthly
Other period

v. Choose SAVE.

5. Choose SAVE.

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6. Select the Spool params. function, only if you want to change the print parameters. Change
and SAVE.

7. Check the indicators on the initial Archive Management: Create Archive Files screen.
Indicators that were red (indicating not maintained) are now displayed in green (indicating
maintained).

8. Choose EXECUTE.

Deleting Archived Data

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Environment → Archiving →
JV Data → Delete archived data.

The Archive Administration: Execute Delete Program screen appears.

Procedure
1. Select Test session, to do a test run before executing the delete program.

2. Choose the Archive selection function to choose the files to delete.

3. Choose the Start date function. The Start Time dialog box appears.

4. Select the appropriate function to define the start time parameters from the following options:
Immediate
Date/Time
After job
After event
At operation mode

5. Complete the required fields on the parameter screens.

If you want to delete archives on a periodic basis, follow these steps:

i. Choose Immediate
ii. Select Periodic job.
iii. Choose the Period values function.
iv. Select the appropriate period:

Hourly
Daily

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 Weekly
Monthly
Other period

v. Choose SAVE.

6. Choose SAVE.

7. Select the Spool params. function if you want to change the print parameters. Change and
SAVE.

8. Check the indicators on the initial Archive Management: Create Archive Files screen.
Indicators that were red (indicating not maintained) will now be displayed in green (indicating
maintained).

9. Choose EXECUTE.

Reloading Data Archives

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Environment → Archiving →
JV Data → Reload archives.

The Archive Administration: Reload Archive screen appears.

Procedure
1. If you want to use a variant, complete the Variant field on the Archive Management: Reload
Archive screen.

2. Choose the Archive selection function. The Archive Management: Choose Files to Reload
dialog box appears.

3. Choose the files you want to reload.

4. Choose SAVE.

5. Choose the Start date function. The Start Time dialog box appears.

6. Choose the appropriate function to define the start time parameters from the following options:
Immediate
Date/Time
After job
After event
At operation mode

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7. Complete the required fields on the parameter screens.

If you want to reload archives periodically, follow these steps:

i. Choose the Immediate function.

ii. Select Periodic Job.
iii. Choose the Period values function.
iv. Select the appropriate period:

Hourly
Daily
Weekly
Monthly
Other period

v. Choose SAVE.

8. Choose SAVE.

9. Select the Spool params. function, if you want to change the print parameters. Change and
SAVE.

10. Check the indicators on the initial Archive Management: Create Archive Files screen.
Indicators that were red (indicating not maintained) are now displayed in green (indicating
maintained).

11. Choose EXECUTE.

Creating Billing Archives

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Environment → Archiving →
JV Billing → Create archive.

The Archive Administration: Create Archive Files screen appears.

Procedure
1. If you are going to use a variant, complete the Variant field on the Archive Administration:
Create Archives Files screen.

2. Choose the Start date function. The Start Time dialog box appears.

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3. Choose the appropriate function to define the start time parameters from the following options:
Immediate
Date/Time
After job
After event
At operation mode

4. Complete the required fields on the parameter screens.

If you want to create archives periodically, follow these steps:

i. Choose the Immediate function.

ii. Select Periodic Job.
iii. Choose the Period values function.
iv. Select the appropriate period:

Hourly
Daily
Weekly
Monthly
Other period

v. Choose SAVE.

5. Choose SAVE.

6. Select the Spool params. function, if you want to change the print parameters. Change and
SAVE.

7. Check the indicators on the initial Archive Management: Create Archive Files screen.
Indicators that were red (indicating not maintained) are now displayed in green (indicating
maintained).

8. Choose EXECUTE.

Deleting Archived Billing Data

Prerequisites
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Environment → Archiving →
JV Billing → Delete archived data.

The Archive Administration: Execute Delete Program screen appears.

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Procedure
1. If you want to do a test run prior to deleting archived billing data, select Test session, on the
Archive Administration: Execute Delete Program screen.

2. Select the Archive selection function to choose the files to delete.

3. Select the Start date function. The Start Time dialog box appears.

4. Select the appropriate function to define the start time parameters from the following options:
Immediate
Date/Time
After job
After event
At operation mode

5. Complete the required fields on the parameter screens.

If you want to delete archives periodically, follow these steps:

i. Choose the Immediate function.

ii. Select Periodic Job.
iii. Choose the Period values function.
iv. Select the appropriate period:

Hourly
Daily
Weekly
Monthly
Other period

v. Choose SAVE.

6. Choose SAVE.

7. Select the Spool params. function, only if you want to change the print parameters. Change
and SAVE.

8. Check the indicators on the initial Archive Administration: Create Archive Files screen.
Indicators that were red (indicating not maintained) are now displayed in green (indicating
maintained).

9. Choose EXECUTE.

Reloading Billing Archives

Prerequisites

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Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Environment → Archiving →
JV Billing → Reload archives.

The Archive Administration: Reload Archive screen appears.

Procedure
1. If you want to use a variant, complete the Variant field on the Archive Administration: Reload
Archive screen.

2. Choose the Archive selection function. The Archive Management: Choose Files to Reload
screen appears.

3. Choose the files you want to reload.

4. Choose SAVE.

5. Choose the Start date function. The Start Time dialog box appears.

6. Choose the appropriate function to define the start time parameters from the following
options:
Immediate
Date/Time
After job
After event
At operation mode

7. Complete the required fields on the parameter screens.

If you want to reload archives periodically, follow these steps:

i. Choose the Immediate function.

ii. Select Periodic Job.
iii. Choose the Period values function.
iv. Select the appropriate period:

Hourly
Daily
Weekly
Monthly
Other period

v. Choose SAVE.

8. Choose SAVE.

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9. Select the Spool params. function, if you want to change the print parameters. Change and
SAVE.

10. Check the indicators on the initial Archive Administration: Create Archive Files screen. Those
that were red (indicating not maintained) are now displayed in green (indicating maintained).

11. Choose EXECUTE.

Managing Billing Archives

Procedure
Menu Path

On the SAP Easy Access menu, choose Joint venture accounting → Environment → Archiving →
JV Billing → Archive administr.

The Archive Management: Archiving session overview screen appears.

Configuration Considerations
Definition
For comprehensive SAP Joint Venture Accounting (JVA) configuration information, you must refer
to the Implementation Guide (IMG).

Configuration for Equity Change Management

Use
To configure equity change management, you must first create recovery indicators (RIs) in SAP
Joint Venture Accounting (JVA).

Menu Path

To create RIs for SAP JVA, follow this menu path:

On the Display structure menu in the IMG, choose Joint venture accounting → Master Data →
Recovery Indicators.

On the dialog box, enter the SAP JVA company code and press ENTER. The Recovery Indicator
maintenance screen appears.

The cutback indicator selects the RI as relevant to the SAP JVA month end process called
cutback. All records in the SAP JVA ledger that are assigned an RI, for which the cutback
indicator is selected, are processed by cutback. The indicator Billing selects the RI as relevant to

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the SAP JVA month end billing process. All records assigned an RI, for which the billing indicator
is selected, are processed by Billing and are available for the partner’s expenditure detail
statement.

All RIs for your SAP JVA company, defined as billable in previous releases, should be converted
to cutback and billing relevant during installation of SAP JVA. To support processing of Prior
Period Equity Adjustment, you should create the following additional RIs. For each regular RI that
is selected with the indicators cutback and billing, you should create two additional equity
adjustment RIs. One of the pair is used to post the reversal of the original record booked to the
old equity group, and the other is used to re-post the record to the new equity group. To support
Prior Period Equity Adjustment processing, you should select both the cutback and the billing
indicators for these new RIs.

If, for example, there are two regular RIs (BI and AD) selected with the indicators cutback and
billing for your SAP JVA company, then you should define two new RIs for each of these two
regular RIs. Your configuration settings for RIs could look like this:

RI Cutback Billing Susp.RI Corp.pay Description

A1 X X E.Adj. Rvrs. AD Rec. to Old EG

A2 X X E.Adj. Rebook AD Rec. to New EG

A3 X X E.Adj. Rvrs. BI Rec.to Old EG

A4 X X E.Adj. Rebook. BI Rec. to New EG

The next step is to assign these new RIs to the posting rule details for the function that controls
posting for Prior Period Equity Adjustment.

Posting Rule Details

Menu Path

On the Display structure menu in the IMG, choose Joint venture accounting → Processing →
Posting → Posting Rules.

On the dialog box, enter the SAP JVA company code and press ENTER. The Posting Rules:
Overview screen appears.

The SAP JVA function EQAD is used to provide the posting rules for Prior Period Equity
Adjustment. There are also two new function items for the function EQAD. Function item E1 holds
the posting rule details (posting key and RI) used to reverse the original records that were posted

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to the old equity group. Function item E2 holds the posting rule details (posting key and RI) used
to re-post the records to the new equity group.

Both function item E1 and E2 post one line documents to the SAP JVA ledger using transaction
GB01, a transaction reserved for updating Special Ledger module ledgers. This is possible
because the SAP JVA ledgers are in fact Special Ledger ledgers. When special unbalanced
entries are posted to the SAP JVA ledger with GB01, a Special Ledger posting to a local ledger is
also produced. For this reason, you must maintain a document type for Special Ledger postings
under the DT heading for function EQAD.

The second major task of Prior Period Equity Adjustment processing is running cutback on the
record that was re-posted to the new equity group. This processing posts to the partner’s
accounts receivable (A/R) account and updates the balance in SAP FI on the A/R reconciliation
account assigned to the partner’s customer account. For this reason, you must also maintain a
document type for SAP FI postings under the DB heading for function EQAD.

For the same function item, you can assign multiple posting rule details, each one used to
process postings with a specific RI. To ensure complete and proper processing, for each regular
RI that is selected with the indicators cutback and billing, you should define a set of posting rule
details for each EQAD function item. You should establish a rule for E1 for each of these RIs and
a rule for E2 for each RI.

Prior Period Equity Adjustment uses the posting rule details assigned to function types E1 and E2
to make simple reversals and re-posts, so posting key 40 is appropriate for the debit side and 50
for the credit side of all details assigned to both function items. You should, however, assign a
different equity adjustment RI to the details of each unique function item and regular RI
combination.

In the previous example AD and BI were the only two RIs selected with the cutback and billing
indicators for the SAP JVA company. You should define two posting rule details for each EQAD
function item. For E1, you should establish a rule for AD and one for BI. For function item E2, you
should also establish a rule for AD and another for BI. Using the equity adjustment RIs defined in
the example above, you should assign the following posting rule details for the two EQAD
function items:

Function RI Deb Post Key Recovery Cre Post Key Recovery

Item Indicator Indicator

E1 AD 40 A1 50 A1

E1 BI 40 A3 50 A3

E2 AD 40 A2 50 A2

E2 BI 40 A4 50 A4

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As a result, the reversal of the original posting to the old equity group, controlled by function item
E1, is assigned the RI A1, if the RI on the original record is AD, and the reversal is assigned RI
A3 if the RI on the original record is BI. The re-posting of the record to the new equity group,
controlled by function item E2, is assigned the RI A3, if the RI on the original record is AD, and
the re-posting is assigned RI A4, if the RI on the original record is BI.

The reversal of the records in the original document posted to the old equity group is posted
using the SAP JVA activity JVE1. JVE1 formulates the reversal by using the posting rule details
for posting key and RI specified under function item E1 for the SAP JVA function EQAD. The re-
posting of these records to the new equity group is controlled by the SAP JVA activity JVE2.
JVE2 composes the re-posting to the new equity group by using the posting rule details for
posting key and RI specified under function item E2 for EQAD.

User Exit for Intercompany Lines in SAP FI

Documents
Use
When you post an SAP FI document in an SAP Joint Venture Accounting (JVA) company, the
SAP JVA integration manager creates the corresponding SAP JVA document. The SAP JVA
integration manager determines the joint venture information needed to formulate the SAP JVA
document. It derives the joint venture, the equity group, and the recovery indicator (RI) for each
line in the SAP FI document.

In addition, the integration manager determines whether or not each SAP FI line should be the
basis for splitting the other lines in the SAP JVA version document, or whether the SAP FI line
should itself be split in the SAP JVA document. The integration manager handles splitting
differently, depending on whether the line belongs to a clearing or a non-clearing document, and
depending on what joint venture information is available for the line.

SAP JVA Handling with User Exit

The enhancement JVA-IM-1 with function module exit EXIT_SAPLGJVI_001 for intercompany
lines enables you to handle intercompany lines differently, than the standard handling, when
assigning recovery indicators (RIs) and determining splitting. This exit is only called when SAP
JVA is active for the SAP FI company. If an SAP FI document contains intercompany lines, SAP
JVA calls this exit to determine the handling of those lines. The user exit can determine the
following, when formulating the SAP JVA line for an SAP FI intercompany line:

• RI to be assigned to the line

• Whether the line should be the basis for splitting other lines in the document, or if the line
itself should be split

To enable the SAP JVA integration manager to determine these two issues, the user exit uses
information on the intercompany lines taken from a table (Refer to Table 1). An ABAP program
can provide the necessary RI and splitting information for intercompany lines.

User Exit Table

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To determine handling for intercompany lines, the user exit refers to a table with document
information. This table contains one line for each company in the intercompany document, as
shown in the following example:

Table 1

Field Contents

AWTYP Type of the document (usually RFBU)

AWREF Reference document number (This field will be empty)

AWORG Reference organizational unit (This field will be empty)

BUKRS Company code

BELNR Preliminary document number

GJAHR Fiscal year

APPL Application (SAP FI, SAP CO, SAP MM, SAP SD)

CLEAR Flag the document if it is a clearing document

CLEAR_LN Number of clearing lines for this company (A clearing document usually has
clearing lines only in a single company.

VENDOR Number of vendor lines for the company

CUSTOM Number of customer lines for the company

GLACCT Number of general ledger account lines for the company

EXCHGE Number of exchange difference lines for the company

TAX Number of tax lines for the company

ASSET Number of asset lines for the company

DISCNT Number of discount lines for the company

INTCOM Number of intercompany lines for the company (This should always be 1 – If it is
greater than 1, the user exit is not called)

SPLIT Value set to one of the following by the user-created program:

BLANK Standard handling of split determination.

1. The intercompany line is taken as the basis for splitting other lines in the

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 SAP JVA document
2. The intercompany line is split on the bases of the joint venture
information available from other lines in the document

RECID Value for RI supplied by the user exit program

SAP JVA Integration Manager Handling of User Exit Table Entries

The RI entered in the table field RECID by the user exit program is set on the intercompany line
for the company in the document.

When splitting the intercompany line, the integration manager checks the split flag in the table,
which should be set by the user exit program. If there is no value in the SPLIT field, the SAP JVA
integration manager applies default splitting to the intercompany line.

If the value in the SPLIT field is 1, no splitting takes place. If joint venture information is available
on the intercompany line, then the line is the basis for splitting other lines in the SAP JVA
document. If no joint venture information is provided on the intercompany line, the corporate joint
venture information for the company is assigned to the line.

If the value in the SPLIT field is 2, the document is a clearing document, and open items for the
company are selected. The intercompany line is split, according to the joint venture information
on the open items. If there are no open items for the company, the value in the SPLIT field is
changed to 1 and no split takes place, because there is no basis available.

Creating the User Exit Program

The first step in creating a user exit program for handling intercompany lines in SAP JVA
documents is to create a user project and copy the delivered SAP JVA objects into the project.

Menu Path

On the SAP Easy Access menu, choose Tools → ABAP Workbench → Utilities → Enhancements
→ Project management.

The Project Management of SAP Enhancements screen appears.

You must create an ABAP program to fill the RECID and SPLIT fields of the SAP JVA
intercompany user exit table.

Changes to IDoc Types and IDoc Segments

Use

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The IDoc types JV_INV01 and JV_EXP01 are used for electronic data interchange (EDI) billing in
joint venture. Due to changes in the ANSI X12 standard, some segments within these IDoc types
and the IDoc type JV_EXP01 have been changed, as follows:

• IDoc type JV_EXP01 has been replaced by IDoc type JV_EXP02. It contains the
additional segment: E1JVTDS for the Total Monetary Value Summary. This segment is
included in the 819 document of the ANSI X12 standard.
• The IDoc segment E1JVBIG used in type JV_INV01 contains two new fields. INVDT2
contains the invoice date in the format YYYYMMDD (element BIG01 in ANSI standard). It
replaces the old segment INVDT. ORDDT2 contains the purchase order date in the
format YYYYMMDD (element BIG03 in ANSI standard). It replaces the old segment
ORDDT.
• The IDoc segment E1JVDTM used in types JV_INV01 and JV_EXP02 includes the new
STMDT2 field, which contains date information in the format YYYYMMDD (element
DTM02 in ANSI standard). It replaces the old segment STMDT.
• The IDoc segment E1JVBOS used in type JV_EXP02 contains two new fields. STMDT2
contains date information in the format YYYYMMDD (element BOS02 in ANSI standard).
It replaces the old segment STMDT. INVDT contains the invoice date in the format
YYYYMMDD (element BOS06 in ANSI standard).
• The IDoc segment E1JVN4 used in types JV_INV01 and JV_EXP02 includes the
PSTCD2 field, which contains the postal code with 15 characters (element N403 in ANSI
standard). It replaces he old segment PSTCD.
• The IDoc segment E1JVJIL used in type JV_EXP02 contains two new fields. STMDT2
contains date information in the format YYYYMMDD (element JIL06 in ANSI standard). It
replaces the old segment STMDT. AMTQU contains an amount qualifier (element JIL07
in ANSI standard).
• The IDoc segment E1JVPSA used in type JV_EXP02 includes the AMTQU field, which
contains an amount qualifier (element PSA05 in ANSI standard).

FI/CO Intercompany Reconciliation in SAP JVA

Use
SAP FI postings are recorded by company, business area, and functional area. SAP CO postings
occur within a CO area. Multiple SAP FI companies and business areas may be included in a
single CO area. Also, SAP CO postings are assigned to cost objects, which are themselves
assigned to SAP FI companies and business areas.

Usually during posting in an accounting period, expenses are posted from one cost object to
another. For example, when SAP CO allocations are made from a cost center in one SAP FI
company or business area to a cost center in a different SAP FI company or business area, this
creates a different balance by company, business area, or functional area in SAP CO than in SAP
FI.

The FI/CO Reconciliation Ledger process is executed in SAP CO during period end processing to
reconcile SAP CO and SAP FI at the company, business area, and functional area levels.
Essentially, this process posts the results of SAP CO postings back into SAP FI at the
appropriate level so that SAP FI and SAP CO agree.

Default Handling of FI/CO Reconciliation in SAP JVA

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The SAP JVA ledger is organized by company (like the SAP FI company) and joint venture.
Therefore, SAP JVA must maintain agreement with SAP FI at the company and account levels.
Since SAP CO postings are also entered in SAP JVA, the default handling in SAP JVA of
intercompany SAP CO postings causes a lack of synchronization at the company level between
SAP FI and SAP JVA just as SAP CO and SAP FI are at the end of the period.

With default SAP JVA configuration settings for SAP CO processing, the results of the FI/CO
Reconciliation Ledger process are not posted in SAP JVA, because these postings would
produce duplicate entries of the original SAP CO postings. As a result, after the FI/CO
Reconciliation Ledger process, SAP JVA is not synchronized with SAP FI at the company level.
Moreover, if BBbyV is active for the SAP JVA company, there will be a balance in SAP JVA for
the company in the interventure suspense (I/S) account.

SAP JVA Configuration Settings for FI/CO Intercompany Reconciliation

Two tables in JVA configuration allow you to customize SAP CO processing to address the
following requirements:

• Ensure period-end synchronization between SAP JVA and SAP FI at the company level
• Eliminate the balance on the I/S account created by intercompany SAP CO postings

• Enable posting of the results of FI/CO Reconciliation

Processing FI/CO Intercompany Reconciliation in

SAP JVA
Prerequisites
To ensure complete and accurate results, you should make initial settings for these SAP CO
processing configuration tables at the beginning of an accounting period, before any postings.

Two configuration tables allow you to customize handling of intercompany SAP CO postings in
SAP Joint Venture Accounting (JVA). You can define settings for these tables that:

1. Specify whether or not the results of FI/CO Reconciliation Ledger processing should be
posted in SAP JVA for the selected company
2. Determine whether or not intercompany SAP CO postings between the selected
company and another specified company should be offset by automatic postings in SAP
JVA, and the accounts that should be used

These two decisions are independent of one another. You enter the settings for each on two
different screens. You can specify whether or not the results of FI/CO Reconciliation Ledger
processing should be posted in SAP JVA for the selected company on the JV/CO/FI
Reconciliation: Overview screen. You can then determine whether or not intercompany SAP CO
postings between the selected SAP JVA company and another specified company should be
offset by automatic postings in SAP JVA on the CO/JV cross company reconciliation:Overview
screen.

Menu Path

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On the Display structure menu in the IMG, choose Joint venture accounting → Processing→ CO
Processing→ CO/FI reconciliation.

The JV/CO/FI Reconciliation: Overview screen appears.

Procedure
You can stipulate that the results of FI/CO Reconciliation Ledger processing should be posted in
SAP JVA for the selected SAP JVA company on the JV/CO/FI Reconciliation: Overview screen.
You can make the following settings:

1. In the CFRC field, enter the code for the SAP JVA company
2. In the XCP (cross- or intercompany posting) field, make one of the following entries:

Blank for do not post the results of FI/CO Reconciliation Ledger processing in SAP JVA
for the company specified in the CFRC field (default)

X for do post the results of FI/CO Reconciliation Ledger processing in SAP JVA for the
company specified in the CFRC field

Unless there is a compelling reason (such as special reporting requirements) for posting
the results of FI/CO Reconciliation Ledger processing in SAP JVA, you should retain the
default setting (do not post the results). If you choose to post FI/CO Reconciliation
Ledger results in SAP JVA, you should take particular care in the next step, when you
select the settings for handling offsets to intercompany SAP CO postings. If you decide to
post FI/CO Reconciliation Ledger results in SAP JVA, but you do not define settings so
that intercompany SAP CO postings will be offset, the reconciliation ledger postings will
duplicate the original allocation lines

After FI/CO Reconciliation Ledger processing, you cannot edit to ensure consistency with
the SAP JVA configuration settings. If you post FI/CO Reconciliation Ledger results in
SAP JVA, when executing that process in SAP CO, you must set the run time options so
that they are compatible with the SAP CO processing settings for intercompany
reconciliation in SAP JVA configuration.

3. After you have entered the SAP JVA company code in the CFRC field and stipulated
whether or not FI/CO Reconciliation Ledger results should be posted in SAP JVA for that
company, you can configure handling of intercompany SAP CO postings in SAP JVA.
Press ENTER to edit the new entry, then select that entry, and select the CO/JV cross
company reconciliation button.

You do not need to stipulate that the FI/CO Reconciliation Ledger results should be
posted in SAP JVA for the company, to be able to choose automatic offsets to

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 intercompany SAP CO postings in SAP JVA for the company. You must, however,
specify the SAP JVA company for which automatic offsets to intercompany SAP CO
postings are posted in the CFRC field on this screen, and select that entry before
accessing the CO/JV cross company reconciliation:Overview screen.

Automatic Offset Lines in JVA for Intercompany CO Allocations

You can determine whether or not intercompany JVA CO postings between the selected SAP
JVA company and another company should be offset by automatic postings in SAP JVA. You can
also specify the accounts that should be used for those postings on the CO/JV cross company
reconciliation:Overview screen. The following settings are possible:

1. In the XCPC (cross- or intercompany posting company) field, enter the code for the
company with which the SAP JVA company, selected on the previous screen, shares
intercompany postings.
2. On the JV/CO/FI Reconciliation: Overview screen, you selected a JVA company listed in
the CFRC field. This is the selected SAP JVA company for which SAP JVA configuration
settings are made. In the XCPC field, you enter the code of the company with which the
selected SAP JVA company shares intercompany SAP CO postings. The setting
specified in the XCA field is applied to postings made in SAP JVA to the selected SAP
JVA company when intercompany postings between these two companies are posted in
SAP CO.
3. In the XCA field, make one of the following entries:

• Blank for do not post offsets for intercompany SAP CO postings (default)
• 1 for post offsets for intercompany SAP CO postings using the original SAP CO cost
elements
• 2 for post offsets for intercompany SAP CO postings using special account specified on
this table

1. If you enter setting 2 in the XCA field, in the Credit acct and Debit acct fields you must
specify the special accounts to which the offsets to intercompany SAP CO postings will
be posted in SAP JVA.

There are two possible settings for the XCP field on the JV/CO/FI Reconciliation:
Overview screen. These two settings can be combined with the three possible settings
for the XCA field on CO/JV cross company reconciliation:Overview screen to make six
possible settings for handling intercompany SAP CO postings and FI/CO Reconciliation
postings in SAP JVA. Some of the possible settings may produce undesirable results in
the SAP JVA ledger.

The following two possible combinations of settings for the XCP and XCA fields are likely to
produce the most desirable results in the SAP JVA ledger, from an accounting point of view:

XCP XCA Debit acct

Blank 2 190500

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X 1

You may choose not to post FI/CO Reconciliation Ledger results, but to have intercompany SAP
CO postings offset with lines to special accounts in SAP JVA (XCP = Blank and XCA = 2). With
these configurations, intercompany lines produced by SAP CO are offset by automatically
produced lines to special accounts in SAP JVA. The original lines are posted in both SAP CO and
SAP JVA, yet these lines are offset by automatic lines in SAP JVA. This eliminates the need for
the FI/CO Reconciliation postings in the SAP JVA ledger.

Example

Example 1

Assume an intercompany posting for $50, posted in SAP CO from company JVU1 and cost
center CC1 (to which JV1 is assigned) to company JVU2. BBbyV is not active for JVU1, and the
SAP CO processing configuration is: XCP = Blank and XCA = 2. The following two-line document
would be posted to JVU1 in JVA for the intercompany SAP CO posting:

Joint Venture Cost Account Amount

Center

JV1 CC1 900010 50- Line posted from SAP CO for cost
center CC1 and venture JV1 in
company JVU1

CPV 190500 50 Automatically produced line using

special account posted to corporate
venture in JVU1

According to the SAP JVA configuration settings, automatic offset lines are posted (XCA = 2) to
special accounts (Credit acct = 190500). As a result, the meaning of these lines can be easily
determined during reporting. The partner company’s code (in this case, JVU2) is assigned to the
text field (SGTXT) of all offset lines that are automatically produced for intercompany postings.
Since FI/CO Reconciliation Ledger results are not included in the SAP JVA ledger, there will be
no balances on the special account for FI/CO Reconciliation Ledger postings and in the
intercompany receivables and payables account, as there will be in SAP FI at the end of the
period.

You can establish settings that:

• Do not post FI/CO Reconciliation Ledger results in SAP JVA

• But do post offsets to the intercompany lines using the same accounts to which the
original postings were made in CO (XCP = Blank and XCA = 1)

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You should opt to post offsets of intercompany SAP CO lines to original accounts (XCA = 1)
should only when FI/CO Reconciliation Ledger results are also posted in SAP JVA (XCP = X).

If BBbyV is active for JVU1 but the SAP CO processing configurations remain the same, the I/S
account balance for the company in SAP JVA is also eliminated by automatic posting lines in the
SAP JVA document.

Joint Venture Cost Account Amount

Center

JV1 CC1 900010 50- Line posted from CO for cost center
CC1 and venture JVU1 JV1

CPV 190500 50 Automatically produced line using

special account posted to corporate
venture in JVU1

JV1 730000 50 Automatically produced line to JV1

using I/S account to balance by
venture

CPV 730000 50- Automatically produced line to

corporate venture using I/S account to
offset special intercompany line

The first line of this SAP JVA document represents the line of an intercompany posting for
company JVU1 posted in SAP CO. The second line is automatically produced by the SAP JVA
configuration for reconciliation of intercompany SAP CO postings (XCA = 2). This line uses the
special account specified in the Debit acct field of the CO/JV cross company
reconciliation:Overview screen (Credit acct = 190500), because the XCA field of that screen has
been set to 2. The third line is automatically produced by BBbyV to ensure that, with regard to the
first line, the document balances by venture (venture= JV1). The last line is also produced by
BBbyV. This line offsets the second line, which was produced by SAP CO intercompany
processing settings in SAP JVA. Like line 2, it is assigned to the corporate venture (CPV) for
company JVU1. The last line eliminates the balance in the I/S account in SAP JVA, that is
created by the offset to the intercompany SAP CO line that is automatically produced in
companies for which BBbyV is active.

You can choose to have FI/CO Reconciliation Ledger results posted in SAP JVA. You can also
choose to have intercompany SAP CO lines offset in SAP JVA with lines posted to the same
accounts used in the original lines: XCP = X and XCA = 1. With these SAP JVA configuration
settings, the results of SAP CO intercompany postings are reversed by automatic postings to the
cost elements used to post the original lines. Also, since FI/CO Reconciliation Ledger results are
included in the SAP JVA ledger, there will be balances on the special account for FI/CO
Reconciliation Ledger postings and on the intercompany receivables/payables account just as
there will be in SAP FI.

With these configuration settings and by using the same example described above, if BBbyV is
not active for JVU1, the following documents would result from intercompany and FI/CO
reconciliation postings:

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CO Posting

Joint Venture Cost Account Amount

Center

JV1 CC1 900010 50- Line posted from SAP CO

for cost center CC! and
venture JV1 in company
JVU1

CPV 900010 50 Automatically produced

offset line using SAP CO
account posted to corporate
venture in JVU1

FI/CO Reconciliation

Joint Venture Cost Account Amount

Center

CPV 615200 50- Posting of SAP CO results to

special FI/CO reconciliation
account in company JVU1

CPV 160500 50 Posting of intercompany

receivable for JVU2 in JVU1

In SAP JVA, FI/CO Reconciliation postings are assigned to the corporate venture (CPV). If
BBbyV is active for JVU1, the same example would result in these lines:

Allocation

Joint Venture Cost Account Amount

Center

JV1 CC1 900010 50- Line posted from SAP CO for cost
center CC1 and venture JV1 in
company JVU1

CPV 900010 50 Automatically produced line using

SAP CO account posted to

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 corporate venture in JVU1

JV1 730000 50 Automatically produced line to JV1

using I/S account to balance by
venture

CPV 730000 50- Automatically produced line to

corporate venture using I/S
account

FI/CO Reconciliation

Joint Venture Cost Account Amount

Center

CPV 615200 50- Posting of SAP CO results

to special FI/CO
reconciliation account in
company JVU1

CPV 160500 50 Posting of intercompany

receivable for JVU2 in
JVU1

Terminology
Definition
The SAP Joint Venture Accounting (JVA) help documentation presents many new functions,
objects, procedures, and processes. The following information objects:

• Clarify many of the more complex SAP JVA concepts

• Explain functions, objects, procedures, and processes that have been mentioned already

Creating Recovery Indicators

Prerequisites
Menu Path

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On the Display structure menu, choose Joint venture accounting → Master Data → Recovery
Indicators.

Procedure
On the dialog box, enter the SAP Joint Venture Accounting (JVA) company code. The Recovery
Indicator maintenance screen appears.

AM/MM Master Data Configuration

Use

For complete configuration details, refer to the IMG.

Assign Asset to Venture

The venture number is derived from a CO element on the Asset Master Record. The venture can
be from a cost center, internal order number, investment order number, or investment work
breakdown structure (WBS) element.

Book Depreciation

To control billable and non-billable postings to an asset master record, the AM/MM module links
recovery indicators (RIs) to depreciation areas. Standard Asset Accounting designates 01 as the
book depreciation area.

Billable Cost Area

A depreciation area must be specified as the area for billable values.

Non-Billable Cost

A depreciation area must be specified for non-billable values.

Table Name and Field Name

Each AM transfer screen has a Selection field. You link the Selection field to an asset master
record field to further specify the type of asset. The ANLA-ORD41 example represents the EVAL
1 field on every asset master record.

Current Replacement Price (CRP) Calculation

You must select this button to invoke the CRP calculation.

Chart of Depreciation

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You specify the corresponding chart of depreciation for this company code.

Index Series

The index series used for calculating estimated book cost is configured within the joint venture
configuration menus and is referenced on this detailed data screen.

Message for Budget Impact

This specifies the type of system message produced when the asset receiving value does not
have a CO element for budget tracking. The company's budget policy dictates this selection.

AM/MM Method

The number 8 (denoting the United States) is the only permitted selection.

Corp RI for AM

You use this with the Asset Sale transaction to change the entire entry to a non-billable entry. If
the entry is to be non-billable, the RI entry in the Corporate Detail screen is used instead of an RI
derived from the corresponding CO element.

Posting Rules
Prerequisites
To access the posting rule details for an SAP JVA process like Prior Period Equity Adjustment,
you must first access the function items to which those details are assigned. To access the
function items for an SAP JVA process, you must first access the posting rule or function for that
process. The function items are assigned to the function.

Procedure
1. On the Display structure menu in the IMG, choose Joint venture accounting →
Processing → Posting → Posting Rules.
2. On the dialog box, enter the SAP JVA company code. The Posting Rules: Overview
screen appears.

The function for Prior Period Equity Adjustment is EQAD. To access the function items for an
SAP JVA function like EQAD, choose the function and then choose the radio button for Posting
rule details. The Posting rule details:Overview screen appears, listing all items assigned to that
function.

To access the Posting Rule Details screen that contains the posting details such as posting key
and RI for a specific function item, double click the function item on the Posting rule
details:Overview screen. The Posting Rule Details maintenance screen for that function item
appears.

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Assigning a Venture Bank Account (VBA)
Use
The VBA selection function updates invoice lines, so that they are paid from the appropriate bank
account. When you post an invoice, the invoice expenditure is reviewed to determine the venture
that incurs the largest expenditure. This venture is used to determine the house bank from which
the invoice will be paid. The system inserts the code for that house bank onto the invoice line.
You can change the house bank after the invoice has been posted.

House banks are identified by company code, venture, and funding currency, so you can select a
house bank based on the funding currency of the invoice. The payment program selects an
appropriate bank account from the house bank, depending on the payment currency of the
invoice and the funds available.

When venture bank accounts are managed using a central disbursement account (CDA),
ventures are configured so that payments are made from the CDA. You can use the bank
switching program to reimburse the CDA for payments from the appropriate VBAs.

Rules, Exclusion Sets, and WBS Elements for

Cost Calculations
Use
You can specify objects, such as rates, exclusion sets, rules and work breakdown structures
(WBSs) in SAP Joint Venture Accounting (JVA). These are used to calculate overhead costs for
companies in the United States region at the following three levels:

• Company

• Joint operating agreement (JOA)

• Joint venture

Hierarchy of Cost Calculation Specifications

The cost calculation information, specified at the joint venture level, takes precedence over what
you specify at the JOA level, and the specifications at the JOA level take precedence over what
you specify at the company level.

Specifying Cost Calculations Objects on the Company Level

At the company level within SAP JVA configuration, you can specify the following cost
calculations objects:

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• Sets of accounts to be excluded from overhead calculations by overhead type

• Standard rate that can be applied to payroll costs to calculate the burden for payroll

Specifying Cost Calculations Objects on the JOA Level

At the JOA level, you can specify the following cost calculations objects for companies in the
United States region:

• Rules for stepped rate major construction overhead (MCO) and catastrophe overhead
calculations

• Rates for percentage producing, percentage development, and payroll burden calculations

• Sets of accounts to be excluded for overhead calculations by overhead type

• Drilling and producing statistical ratios

• Order of execution of project elements or WBSs for cost calculations processing

MCO and Catastrophe Overhead Rules and Sets of Excluded Accounts

At the JOA level, you can specify both the rules to be used to calculate MCO and catastrophe
overhead costs and sets of accounts to be excluded from these calculations. The rule you specify
for an overhead type is applied in calculating overhead costs for expenditures booked to CO-
based cost objects (cost centers, work orders, or WBSs with that overhead type). The cost object
is connected with a joint venture, and the cost calculations rules specified for the JOA is applied
to expenses booked to the cost objects belonging to the joint venture.

You must set up the rules, and the sets of accounts to be excluded from overhead calculations in
SAP JVA configuration, in advance. You must also set up the cost objects, and connect them with
the appropriate joint venture overhead type in CO, in advance.

Specifying Cost Calculations Rules and Rates on the Joint Venture Level

You may assign rates for payroll overhead at the joint venture level, which will be used to
calculate the payroll overhead costs for the venture.

Bank Transfer Accounts

Definition
The bank switching program posts fund transfers between venture bank accounts (VBAs) to
these accounts. You should specify a bank transfer account for each house bank used by the

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venture. You must define one transfer account for each venture funding group. These accounts
should also be managed on an open item basis.

Billing Indicator
Definition
You define billing indicators during SAP Joint Venture Accounting (JVA) configuration. Billing
indicators are assigned to billable postings and identify the type of posting involved (cash call,
normal expenditure, or audit adjustment). Billing indicators are client specific rather than company
specific, so any user of any company in the same SAP client can use any billing indicator set up
within that client.

Calculation Key
Definition
The Calculation Key includes all the designations to determine the method of depreciation, the
depreciation start date rules, and the treatment at the end of the life of the asset. For joint venture
asset management, this explanation centers on the significant elements necessary for unit-of-
production depreciation methods.

Depreciation Type and Class

The depreciation type denotes whether the depreciation process is a special process or whether
the run will be processed every month.

• Dep. Type - "N" Ordinary depreciation (a normal monthly process).

• Dep. Class - "3" Other designates that the key is not for a standard method (i.e. straight-line).

Depreciation Method

The depreciation method defines what unit-of-production method will be used. You can select one
of the following methods:

• Method - "T" Number of units produced divided by remaining units in the reserve

• Method - "S" Number of units produced divided by total units in the reserve

Base Value

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Base value is determined by company policy. Most companies use Net Book Value as noted by a
"24" in the SAP configuration screen.

Carried Interest and Net Profit Interest Netting CO

Prerequisites
Use
To post expenses for a venture, you must first associate a cost object (either a cost center, an
order, or a project) with that venture in CO. While setting up cost objects for ventures in CO, you
must also assign joint venture information to them, including the SAP Joint Venture Accounting
(JVA) cost object types that correspond to the carried interest (CI) penalty categories.

When you post expenses to the venture, you will associate those expenses with a cost object,
and the SAP JVA cost object type associated with that cost object will ensure that the expenses
are identified with a CI penalty category, if appropriate. With regard to posting costs to ventures
covered by CI arrangements, costs related to the carried interest (CI) may be booked to several
cost objects associated with the affected venture.

Carried Interest and Net Profit Interest Netting FI

Prerequisites
Use
The FI elements used by partner and convenience netting can be divided into two categories:

• Customary FI configuration

• Clearing-related configuration

Customary FI Configuration

To enable SAP Joint Venture Accounting (JVA) to process netting clearances of actual
expenditures properly, certain objects and accounts must be configured in standard FI. These
items include the following:

• Field status groups

• Posting keys

• Special general ledger entry indicators (SEIs)

• Partner reconciliation accounts

• Document type

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The SAP client that contains SAP JVA is preconfigured with the FI objects and accounts as well
as with the SAP JVA objects needed to execute carried interest (CI) and net profit interest (NPI)
netting.

Field Status Groups

When they are assigned to general ledger accounts and posting keys, FI field status groups
control whether a number of fields are available for entry (either Required, Optional, or
Suppressed) during FI postings. The field status groups assigned to accounts used for SAP JVA
partner and convenience netting should make the SAP JVA fields available for entry.

These field status groups should be assigned to the posting keys and the general ledger
reconciliation accounts for the customers and vendors who are joint venture partners. These SAP
JVA fields must be either optional or required in the field status group to enable SAP JVA netting
to clear entries.

Posting Keys

The posting keys used for SAP JVA partner and convenience netting must be configured to allow
the use of Special G/L Entry Indicators so that postings created by netting can be matched and
cleared within the general ledger accounts.

Special G/L Entry Indicators (SEIs)

SEIs are assigned to posting keys. The SEIs identify alternative reconciliation accounts that are
used to post special transactions such as convenience netting. The SEIs that are used to post
follow-on processes like netting to partner accounts, whether in accounts receivable or accounts
payable, must be configured so that transactions are booked with the baseline date field.

FI Account for the Partner

To support processing of SAP JVA posted entries within FI, you must create at least one of the
following two types of reconciliation accounts in FI for each SAP JVA partner.

• Customer account in FI Accounts Receivable (A/R)

• Vendor account in FI Accounts Payable (A/P)

Whether you should set up only an A/R account or both an A/R and an A/P account for an SAP
JVA partner is determined by how the partner participates in joint ventures and the types of
postings that will be made to the partner.

Customer Account in FI (A/R)

To post amounts due for monthly billing, cash calls, or partner netting, to SAP JVA partners,
every SAP JVA partner must have a customer account in A/R. This A/R customer account must
access a reconciliation account that is assigned a field status group which allows the input of the
field groups Joint Venture Account Assignment and Joint Venture Billing Indicator.

Carried Interest (CI) and Net Profit Interest (NPI) FI A/R Account Requirements

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An FI A/R account must be set up for all working interest partners of a venture and equity group
who are carrying partners in a CI arrangement so that the CI partner’s expenses can be booked
to these carrying partners. At payout (when revenues exceed expenses plus a penalty
percentage), the carried partner will revert to a normal working partner, at which time the
expenses associated with the interest will be posted to the carried partner’s FI A/R account.

The operating company should also have an FI A/R account to receive postings of CI partner
expenses and postings of all expenses from NPI partners.

Vendor Account in FI Accounts Payable (A/P)

If the partner is also an operator in non-operated ventures or the partner is subject to

convenience netting (which is only used in the United States and Canadian regions), you must
create a vendor account for the partner in A/P in addition to the A/R customer account. In this
case, the field Vendor must contain the name assigned to the partner in SAP JVA.

CI and NPI A/P Account Requirements

An FI A/P account must be set up for CI or NPI partners so that revenues can be posted to the
partners after payout is achieved.

General Ledger Accounts for Automatic SAP JVA Posting

You should set up balance sheet accounts for the operator to receive netting payout postings
from each of the following automatic JVA posting procedures:

• Miscellaneous income for NPI

• Net expense for NPI

• Miscellaneous income holding for NPI

Miscellaneous Income for NPI

When an NPI partner reaches payout, the revenue which exceeds the amount paid out to the NPI
partner should be posted to this operator account.

Net Expense for NPI

When an NPI partner reaches payout in a venture for which there is a net expense balance, this
operator account should be credited for expenses that the operator carried for the NPI partner.

Miscellaneous Income Holding for NPI

At payout revenue for the current period that has already been assigned to the operator is
redirected to the CI or NPI partner. The debit entry to revenue for this reallocation to the CI or NPI
partner should be made to this operator account.

Document Type

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The person responsible for configuration should set up a document type specifically to receive
postings from CI/NPI netting. This document type should accept postings with the following
account types:

• Customer

• Vendor

• General ledger

Carried Interest and Net Profit Interest Netting

JVA Prerequisites
Purpose
To enable SAP Joint Venture Accounting (JVA) to process carried interest (CI) and net profit
interest (NPI) netting for your company, you must establish the following pre-conditions within
SAP JVA:

• Activate the partners in SAP JVA

• Select CI postings in gross amounts by venture or net by partner

Process Flow
In addition to setting up customer accounts in FI accounts receivable (A/R) and vendor accounts
in FI accounts payable (A/P), you also have to activate the partners in SAP JVA, so that they
become joint venture partners. The person responsible for configuration must maintain an entry
for each partner in the SAP JVA partner table.

Select CI Postings in Gross by Venture or Net by Partner

Net by partner is the default for expense and revenue CI postings. The person responsible for
configuration can indicate that expense and revenue CI postings should be executed in gross
amounts by venture by selecting the Gross CI postings field under Cutback and Billing on the
Change View "Company code (detailed) data": Details screen.

If CI postings are posted gross by venture for the company, Cutback will post expenses and
expense offsets gross by venture rather than net by partner. Revenues will also be posted gross
by venture. The statements issued to the CI partners will also be presented in gross amounts by
venture.

Setting up SAP JVA Master Data Objects

As part of configuration for CI/NPI processing, your implementation team must set up certain
master objects that will be used to ascribe attributes to the expense and revenue postings you
make for ventures. The following steps must be completed:

• Define the CI penalty categories for the company.

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• Assign CI penalty categories to SAP JVA cost object types.

• Define billing indicators for CI and NPI postings from cutback.

• Define billing indicators for posting different types of revenues in CI processing.

• Set up CI and NPI groups.

Partner Set Up

To access the partner master record screen in the IMG to set up partners for your company,
follow these steps:

1. On the Display structure menu, choose Joint venture accounting → Master data →
Partner groups → CI Groups or NPI Groups.
2. On the Change View "JV Net profit interest group": Overview screen or "Change View of
CI Group Description": Overview screen, enter the information required for the partner.
3. On the Change View Company code (detailed data):Details screen, choose the Gross CI
postings field under Cutback and Billing, to indicate that expense and revenue CI
postings should be executed in gross amounts by venture, rather than in net by partner,
which is the default method.

Menu Path

1. On the Display structure menu, choose Joint venture accounting → Environment → JV

Company Configuration → Detailed data.
2. On the Change View "Company code (detailed data)":Details screen, enter the
information required for the partner.

CI Postings in Gross Amounts by Venture

To access the JVA Global Company Parameters screen, on which you can choose to have CI
postings for your company posted in gross amounts by venture rather than net by partner, follow
these steps:

1. On the Display structure menu, choose Joint venture accounting → Environment → JVA
Company Configuration → Global Data.
2. A dialog box prompts you for your company code. When you enter the company code
and press ENTER, the JVA Global Company Parameters screen appears.

CI Penalty Categories

To access the Penalty Category: Overview screen for your company to activate CI penalty
categories for your company, follow this menu path:

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 1. On the Display structure menu, choose Joint venture accounting → Master Data → CI
Penalty Categories.
2. On the screen, choose New entries.

Cash Calls
Definition
Cash calls are requests from joint venture operating partners to non-operating partners
requesting payment for anticipated future capital and operating expenditures. Cash call
functionality is completely integrated with accounts receivable in SAP’s FI application. Cash call
requests and receipts are carried forward to the JVA billing process.

Clearing Bank Account

Definition
Invoice payments for the venture are posted to clearing bank accounts. These accounts should
be managed on an open item basis. The minimum is one clearing account in the local currency
for each venture. Alternatively, you may choose to define a clearing account for each currency or
for different payment methods.

Cost Calculations Rules

Use
The rules you specify for SAP Joint Venture Accounting (JVA) cost calculations constitute the
formulas for computing overhead costs that are applied when you execute cost calculations
processing in SAP JVA. For United States region companies, there are three types of cost
calculation rules you can create for your company from the Cost Calculations pull-down menu:

• Stepped rate overhead rules

• Drilling statistical ratios

• Producing statistical ratios

The cost calculations rules are set up at the company level. But to be applied to actual
expenditure amounts for joint ventures during cost calculations processing, the rules must be
associated with specific overhead types at the joint operating agreement (JOA) level.

Stepped Rate Overhead Rules

Cost calculations rules are associated with particular types of overheads (Construction,
Percentage Drilling, CFR Producing). Companies operating in different regions apply different
overhead types. For United States region companies, stepped rate overhead rules are available
to compute the overhead amounts for major construction overhead (MCO) and catastrophe.

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To set up stepped rate overhead rules for calculating costs for MCO or catastrophe, you use the
following process:

1. Name the rule and associate it with the company you are configuring for cost
calculations.
2. Specify the threshold amounts for expenditures that trigger different percentages and
specify the percentages to be applied at different thresholds, the actual contents of the
rule.

In addition, you must assign the cost calculations rules that you set up during
configuration to specific overhead types at the JOA level within SAP JVA. When
you execute cost calculations, the rules specified at the JOA level will be applied
to expenditures booked to ventures belonging to the JOA and to cost objects
associated with the particular overhead type.

Menu Path to Access Stepped Rate Overhead Rules

1. On the Display structure menu in the IMG, choose Joint venture accounting →Processing
→ Cost calculations → Stepped rate rules.
2. On the JV Stepped Rate Rules: Overview screen that appears, select New Entries.

Statistical Ratios

Statistical ratios are cost objects that are created in CO. You must set up the statistical ratios in
CO before you set them up in JVA. Before they can be used to calculate overhead costs for joint
venture expenditures, these statistical ratios must be designated for the company in JVA and
connected with a JOA as well as assigned rates on the JOA level.

The following types of statistical ratio rules are available for United States region companies:

Overhead Type Statistical Ratio Type

Combined Fixed Rate (CFR) Drilling Statistical Ratio
CFR Producing Producing Statistical Ratio

Drilling Statistical Ratios

Before you can designate a drilling statistical ratio for your company, you must set it up as an
object in CO. You will book actual amounts in drilling days for an accounting period to this
statistical ratio object in CO. As a result of the connection between this object and your company
established during configuration, these actuals will be associated with your company.

In addition to connecting the CO statistical ratio to your company in JVA configuration, you must
assign the ratio to a specific overhead at the JOA level. At the same time that you assign the
drilling statistical ratio to a specific JOA in your company, you also assign rates and depth
thresholds that will trigger these rates at the JOA level.

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During execution of the cost calculations process, the actuals posted to the drilling statistical ratio
object in CO will be accumulated and compared with the thresholds assigned for the ratio at the
JOA level in JVA. Then the amount by which actuals exceed the threshold will be multiplied by
the rate designated at the JOA level to produce the overhead expense for CFR Drilling for the
joint ventures within the JOA.

Menu Path to Access Drilling Statistical Ratios

To set up drilling statistical ratios for United States region companies in the IMG, follow this menu
path:

On the Display structure menu, choose Joint venture accounting →Processing → Cost
calculations → Drilling key figures.

On the JV Drilling Statistical Ratios: Overview screen that appears, to set up a new drilling
statistical ratio for your company select New Entries.

The New Entries screen appears.

Producing Statistical Ratios

As with drilling statistical ratios, you set up producing statistical ratios as objects in CO before you
can designate them for your company in SAP JVA. You will book actual amounts in producing
wells for an accounting period to these statistical ratio objects in CO.

The connection between this object and your company, which you establish during configuration,
will associate these actuals with your company. In addition to connecting the CO statistical ratio
to your company in SAP JVA configuration, you must assign the ratio to a specific overhead at
the JOA level. At the same time that you assign the producing statistical ratio to a specific JOA in
your company, you also assign thresholds and rates that are triggered by the thresholds.

During execution of the Cost Calculations process, the actuals posted to the producing statistical
ratio object in CO will be accumulated and compared with the thresholds assigned for the ratio at
the JOA level in SAP JVA. Then the amount by which actuals exceed the threshold will be
multiplied by the rate designated at the JOA level to produce the overhead expense for CFR
Producing for the joint ventures within the JOA.

Menu Path to Access Producing Statistical Ratios

To set up producing statistical ratios in the IMG, to be used to calculate CFR Producing overhead
costs for United States region companies, follow this menu path:

On the Display structure menu, choose Joint venture accounting →Processing → Cost
calculations → Producing key figures.

The JV Producing Statistical Ratios: Overview screen appears.

To set up a new producing statistical ratio for your company select New Entries.

The New Entries screen appears.

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Setting Up Cost Object Types
Prerequisites
When you first book an expenditure in FI, you assign it to the appropriate joint venture and cost
object. The cost objects must set up in CO, and connected to the overhead types and the data
structures of the joint operating agreement (JOA) and joint venture in SAP Joint Venture
Accounting (JVA). This connection enables FI postings to be associated with the proper JOA and
joint venture as well as with the proper overhead type. The cost object types that you set up by
company in SAP JVA configuration make this connection between the CO-based cost object and
the overhead type of the expenditure in SAP JVA.

You should set up a different cost object type for every type of overhead that will apply to a
particular cost category in your company, such as authorization for expenditure (AFE), cost
center, and work order. You can set up cost object types for your company for the following
categories of cost objects:

• Projects and WBSs - This includes AFEs

• Cost centers

• Orders

For United States and Canadian region companies, the following overhead types are available for
the various cost objects:

Project/WBS

Code JV Overhead Type

Blank No Overhead Type
01 % Producing (US)
02 % Development (US)
03 CFR Producing (US)
04 CFR Drilling (US)
05 Operations and Maintenance (Canada)
06 Construction Overhead (MCO in the US, Construction in Canada)
07 Exploration (Canada)
08 Capital Drilling (Canada)
09 Catastrophe Overhead (US)

Cost Centers

Code JV Overhead Type

Blank No Overhead Type
01 % Producing (US)
02 % Development (US)
03 CFR Producing (US)
04 CFR Drilling (US)
05 Operations and Maintenance (Canada)

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Work Orders

Code JV Overhead Type

Blank No Overhead Type
01 % Producing (US)
02 % Development (US)
03 CFR Producing (US)
04 CFR Drilling (US)
05 Operations and Maintenance (Canada)

Menu Path

On the Display structure menu in the IMG, choose Joint venture accounting → Master Data →
Cost object types.

Select either Projects, Cost Centers, or Orders. The JV Overview screen that appears displays
the cost object types that have already been set up for each company. To set up a new cost
object for your company, select New Entries.

Procedure
1. Enter the company code for which the cost object type is being set up in the Company code
field.

2. Enter the name you are assigning to this cost object type in the JV Project (Cost Center or
Order) Type field.

3. Enter a description in the Description field.

4. Select the indicator for the cost object type category being set up from the following type of
data: Capital, AFE Indicator Catastrophic, or Drilling under Control (Not all of these selections are
available for all cost object type categories).

5. Enter the overhead type of the cost object in the JV Overhead Type field.

Cycles
Definition
Cycles consist of one or more segments. You can create different cycles for planned and actual
costs. You can also define cycles to be executed repeatedly. Cycles are valid for a period of time,
and only postings made within that time period will be processed by the allocation using the cycle.

Segments

Segments contain information about how costs are to be allocated between sending cost centers
and receiving cost objects. At execution of the assessment or distribution, the costs collected in
the sending cost centers are allocated to the receiving cost objects. The costs are allocated from

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the sending cost centers using the same allocation sender rule, and the costs are processed by
the receiving cost objects using the same rule for tracing factors. The need to use a different
allocation sender rule or different tracing factor for some senders or receivers indicates that you
should set up a separate segment. At execution of the allocation, the segments are processed
sequentially.

Default Billing Currency

Definition
In SAP joint venture accounting (JVA) the currencies in which the partners can be billed are
defined at configuration. These currencies are called funding currencies. All expenses must be
charged to the partners in one of the funding currencies. Expenses held in a currency other than
one of the funding currencies are converted into one of the funding currencies and consequently
are charged to the partners. SAP functionality uses the first local currency (currency type 10) as
the funding currency that will be used for charges originating in all currencies including non-
funding currencies unless a default billing currency is defined.

In North America, funding currencies cannot be maintained. Thus, the default billing
currency is always the currency in which the bill is created.

Prerequisites Before Defining a Default Billing Currency:

• Only currencies that are defined as a local currency in FI and that are held on ledger 4A
or ledger 4C are allowed to be used as a default billing currency.
• The default billing currency must be set up as a funding currency.

Options for Configuring Default Billing Currency:

• Defined at the Company Code Level

A default billing currency can be assigned to each company code (in table T8JZ). When
configured in this manner, it is automatically added as a funding currency to each equity
group.
• Defined at the Venture/Equity Group Level
The default billing currency can be assigned on the venture/equity group level (in table
T8JG). When configured in this manner, the value from the company code level will be
suggested as a default, but can be overwritten manually. In the joint venture master data
the default billing currency must be defined whenever an equity group is assigned to an
equity type.

Changing the Default Billing Currency

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The default billing currency can only be changed if no postings have been made to this
venture/equity group combination.

• International Region

When the default billing currency is changed, a dialog box will appear asking if the old default
billing currency should be deleted from the funding currencies. The new default billing currency
will be added automatically as a funding currency.

• North America

When the default billing currency is changed, the old default billing currency will be deleted as a
funding currency and the new default billing currency will be added as a funding currency. Since
funding currencies cannot be maintained in North America it is guaranteed that the partner will
always be invoiced in the default billing currency.

Depreciation Areas and Depreciation Keys

Configuration
Procedure

You should refer to the implementation guide (IMG) for complete configuration
details.

To accurately track joint venture billable and nonbillable costs for assets, three depreciation areas
must be created in every chart of depreciation representing a joint venture company code.

1. Define the depreciation areas.

2. Ensure that the proper switches are selected for the joint venture depreciation areas.
3. Map the new joint venture depreciation areas to the recovery indicators (RIs) on the
Global Data Detailed Data screen.

Configuration requirements include:

Depreciation Areas for Joint Venture Billable and Nonbillable Valuation

Derived Depreciation Areas for Joint Venture Tracks Gross Value of the
Asset

Asset Values Accumulated in Depreciation Areas Based on RIs

In standard SAP Asset Accounting (AA), it must be clarified which depreciation area provides
values to another depreciation area.

In SAP Joint Venture Accounting (JVA), the asset values accumulated in the depreciation areas
are based on the recovery indicators on the individual postings and are not direct copies of the
General Ledger Book 01 area as in standard SAP AA.

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However, a 01 Value Transfer must be entered in the ValTr field as it is the posting to Book 01
which is accompanied by a RI and then reflected in the depreciation area as Billable or
Nonbillable.

Group Depreciation Area Configuration Prerequisites

Depreciation can be calculated on a group level by selecting the depreciation areas as group
depreciation areas, each time a link is made from an asset record to a group asset.

The screen layout for depreciation areas can be maintained by Main Asset or Sub Asset. This
option is very important because it is the sole configuration that permits the user to assign an
individual asset record to a group asset.

Configuration requirements include:

Group Depreciation Area Configuration

Condition Code - Configuration Prerequisites

The configuration for Supplemental Detail for billing requires the input of the company’s Condition
Codes into one SAP Asset Management (AM) Table. To access the above table, follow the
outlined steps below:

1. Follow the following menu path to the Table Maintenance screen: SAP Easy Access menu →
System → Services → Table maintenance

2. Enter table T8JX in the Table field.

3. Select View Maintenance.

3. Enter the appropriate company code.

4. Enter the rates as specified by company policy.

Depreciation Configuration Prerequisites

To configure depreciation calculation properly, you should consult the SAP AM documentation.

Only if unit-of-production depreciation calculations are to be used for a joint venture company for
the US region, you must maintain:

1. Depreciation keys

2. Calculation keys

3. Unit of production / actual production values

Transaction Types - SAP JVA Configuration Prerequisites

The Transaction Type definition for SAP AM Transfers is a 2.0C delivered table. The SAP AM
Transfer programs reference this table using the Transaction Type Groups as the key. SAP

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delivers the Transaction Types to ensure that either these exact transaction types are used or
copies of these transaction types are made with different descriptions for reporting purposes.

Transaction Types/Equity Change

The equity change management functionality in JVA does not automatically recalculate partner
share for the asset management transfers. This to designed to give the users exposure to which
asset records were effected by an equity change during the month. The asset transaction types
will appear on a report after the equity change program runs. At this time, it will be the company’s
responsibility to record the changes.

Transaction Types/Cutback

The SAP JVA cutback program is fully automated. Transaction Type 20A processes SAP AM
cutback of retirement properly.

The 290 transaction mapping is for the depreciation accumulation portion of a material asset
transfer and should not be altered.

The SAP JVA cutback program reverses actual transactions by the amount of billable partner
share. The cutback program will access or change certain fields during the reversal of the original
billable transaction. For example, an RI will be changed from billable to cutback; therefore it is
necessary for the fields to be open or optional so that the program change can occur. The fields
needed are located within the asset acquisition account and the asset cutback account.

Depreciation Areas for Joint Venture Billable and

Nonbillable
Definition
Configure as follows:

• Real Depreciation Area Activation

This enables you to update at every posting, which allows you to report and analyze the values
by depreciation area.

• Posting in General Ledger

For the joint venture depreciation areas, this selection will be "0-No values posted to the general
ledger". Only the Book 01 area will directly correspond to a general ledger reconciliation account.
The joint venture areas are for value tracking and reporting only.

• Management of Values

Acquisition and Production Costs must be activated in order to capture all postings affecting each
asset record.

Positive Net Book Value will be allowable for joint venture assets.

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Negative Net Book Value will also be allowable for joint venture assets in order to properly
process month end cutback activity.

Derived Depreciation Areas for Joint Venture

Definition
Derived depreciation areas track gross value of the asset. You configure as follows:

• Real Depreciation Area

Disable this depreciation area since it is simply an addition of the Billable area and the
Nonbillable area.

• Posting in General Ledger

For the joint venture depreciation areas, this selection will be "0-No values posted to the general
ledger". Only the Book 01 area will directly correspond to a general ledger reconciliation account.
The joint venture areas are for value tracking and reporting only.

• Management of Values

Acquisition and Production Costs must be activated in order to capture all postings affecting each
asset record.

Positive Net Book Value will be allowable for joint venture assets.

Negative Net Book Value will also be permissible for joint venture assets to process month end
cutback activity.

• Entries for Derived Depreciation Areas

You enter the two areas (+) whose sum represents the gross value of the asset(s). Note the
proportional selection is 1, designating a summary of the full value of both areas.

Drilling Pay
Definition
In the Drilling Pay field, you enter the number indicating the percentage to be applied to drilling
costs for the venture, to calculate drilling payroll burden. This only applies to the US region.

Estimated Book Cost (EBC)

Definition
EBC for asset valuation, is based on the current value and the asset acquisition year or vintage
year. Asset Accounting within the SAP Joint Venture Accounting (JVA) application requires

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automated EBC, because most companies will not have one asset record for each asset, and in
turn will not have historical cost for each asset. For example, one asset master record will
represent 1,000 valves.

For joint venture asset transfers, you must compare the historical cost against the current
replacement price to remove the asset from the operator’s books and to bill the partners at a
current price. The historical price will be an EBC and is calculated based on published pricing
indexes.

Estimated Book Cost (EBC) Configuration

Procedure

You should refer to the IMG for complete configuration details.

The EBC is calculated when a material transfer involves an asset record which is not maintained
individually with an historical book price. EBC calculation applies a replacement value index
against a current price for the material involved. Most companies use a published replacement
value index.

The configuration for EBC requires three steps:

1. Define the Index Series.

2. Enter the published replacement value index as the index figures for each year
necessary (index figures represent the details behind the index series).
3. Enter the Index Series in the Global Parameters-Detailed Data screen for the joint
venture Company Codes (such as Index Series 100000).

Equity Group
Definition
An equity group represents a specific association of venture partners and their interests. An
equity group can consist of all or some of the partners participating in the venture.

External Code
Definition
An external code refers to a code that you are required to specify. The system checks the
specified code, to confirm whether or not the code falls within the interval of the number range
designated at configuration.

Firm Bank Account

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Definition
You must set up one firm bank account for each bank account held at the house bank. These
accounts should be managed on a non-open item basis in the currency of the bank account.

Foreign Currency Exchange and Valuation

Differences CO Prerequisites
Definition
To support venture bank account (VBA) processing, in which transfers are associated with cost
objects, your implementation team should configure cost objects for general ledger sub-accounts
in CO.

Cost Objects

Transfers of funds between VBAs and between a VBA and a central disbursement account (CDA)
can be booked to cost objects that are associated with the general ledger sub-accounts. To make
this possible, you must associate a cost object with the general ledger sub-accounts for the VBA.

Foreign Currency Exchange and Valuation

Differences JVA Prerequisites
Use
Company Set-Up Decisions in SAP Joint Venture Accounting (JVA)

All companies can use venture bank accounts (VBAs). To make it possible for SAP JVA to
process transfers between VBAs or between a VBA and a central disbursement account (CDA)
for your company, you must activate VBAs for your company in the global parameters for the
company, which is accessed from SAP JVA configuration. You can activate venture bank
accounts (VBAs) by checking the Venture Bank Acc. flag on the Global Company Parameters
Details screen.

Defining SAP JVA Processes that Govern VBAs

A set of objects created in configuration are delivered with SAP JVA to control execution of major
JVA processes such as cash calls. As a group, the following objects provide a protocol for
processing major joint venture accounting processes:

• Function

• Function item

• Posting rules and details

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Function and function item are fixed in the program and cannot be changed. SAP JVA venture
bank account processing is preconfigured for international companies with one function and one
function item:

• Function BNKS

• Function Item XX

Posting Rules and Posting Rule Details

SAP JVA posting rules and posting rule details work in tandem to define the characteristics of the
FI posting that result from execution of the accounting transaction controlled by the SAP JVA
function. Posting rules specify the document header information for the FI document posted from
SAP JVA. Posting rule details specify the posting keys, subledger (or special entry indicator), and
billing indicator for both debit and credit FI postings.

The preconfigured VBA switching function that generates postings to FI is delivered with posting
rule details. These posting rule details define the posting key for debit and credit entries of
postings that are initiated by SAP JVA.

Preconfigured Rules for Processing VBA Switches

Function Function Item Description Posting Keys

BNKS XX Venture Bank Account Switching DB CR
40 50

Setting up SAP JVA Master Data Objects

As part of configuration for VBA processing, you must set up certain SAP JVA master objects that
will be used to organize the bank accounts and define their relationship to the ventures to which
they are assigned. The house banks and bank accounts must have been previously set up in FI.
These objects are:

• Funding groups

• VBAs

• Venture house banks

Menu Path

To set up master data objects that are used in for VBA switches, follow this menu path in the
IMG:

On the Display structure menu, choose → Joint venture accounting → Master Data → Banks,
Exchanges, Currencies →

• Funding Groups
• Bank Accounts

• Funding Group Assignment

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Setting up Funding Groups in SAP JVA

At least one bank account must be set up for each venture to disburse funds to pay for venture
expenditures. These VBAs must in turn be assigned to funding groups, which consist of groups of
VBAs. Funding groups are in turn assigned to ventures.

Assigning Funding Groups to VBAs in SAP JVA

When you have set up the funding group on the JV Funding Group screen, you can proceed to
assign the funding group to a general ledger bank sub-account for a company on the JV Bank
Accounts screen.

Effect on Clearing

It is important to configure the JV Bank Accounts screen in SAP JVA configuration to ensure that
clearing occurs properly. Establishing the relationship between funding group and general ledger
bank sub-account on this screen indicates that the general ledger account is being used as a
bank. If the general ledger account is not associated with the funding group on this table, a
payment will be interpreted as an additional general ledger line rather than as a payment line.

It is also important to configure the JV Bank Accounts screen to ensure that the integration
manager will assign the proper recovery indicator to payments. To support working capital,
payments from bank accounts are usually assigned a corporate recovery indicator (RI). If the
general ledger account that is being used as a bank is not associated with a funding group on the
JV Bank Accounts screen, the integration manager will not assign a corporate RI to postings from
the account.

Assigning Venture House Banks to Funding Groups in SAP JVA

On the JV Funding Group Assignment screen, you can assign a venture house bank and its
physical bank account to a funding group and a company. You must set up both the house bank
and the physical bank account in FI before assigning them to a funding group in SAP JVA.

Assigning VBA Objects to Joint Ventures

To make it possible to execute VBA switching for individual joint ventures, you must connect the
following two master data objects from SAP JVA configuration to joint ventures:

• House banks

• Funding groups

You must ensure that the same account that you assign to the venture is also assigned to both
the funding group (on the JV Bank Accounts screen) and the house bank (venture on the JV
Funding Group Assignment screen). That is, the funding group and house bank assigned to the
venture must themselves both be connected to the same general ledger bank sub-account that is
assigned to the venture.

Because the central disbursement account (CDA) is used to fund all the company’s ventures, the
CDA should not be assigned to a single particular venture.

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Assigning House Banks to Joint Ventures

You may assign a house bank to a joint venture for a specific currency on the Change Joint
Venture Master: Funding Currencies screen by entering the code for the house bank to be
assigned to the venture in the House bank field.

Menu Path

To assign a house bank to a joint venture, follow this menu path:

On the SAP Easy Access menu, choose Joint venture accounting → Master data → Joint
Venture → Maintenance.

On the Joint Venture Master: Initial Screen, enter the Company code and the Joint venture code.

Assigning Funding Group to Joint Ventures

You may assign a funding group to a joint venture on the Change Joint Venture Master: Bank
Account Switching screen by entering the funding group in the FundGp field.

Menu Path

To assign a funding group to a joint venture follow this menu path:

On the SAP Easy Access menu, choose Joint venture accounting → Master data → Joint
Venture → Maintenance.

On the Joint Venture Master: Initial Screen, enter the Company code and the Joint venture code.

Group Area Depreciation

Definition
• Field Group 14

Screen Selection: In order to assign asset records to a group asset, the screen selection for Field
14 Group Asset must be optional or required, depending on the policy of your company.

Maint. Level: - This determines the maintenance level of the group asset assignment.

MainNo Level: - You select MainNo if your company policy is to ensure that the main asset
records represent the same group asset assignment as the corresponding sub-assets.

SubNo. Level: - You select SubNo to enable you to assign all individual asset records to different
group assets.

AM Transfer mandatory configuration

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 Reference: - When the AM Transfer transaction program creates a new
asset record, the "Copy" option must be active to allow the Group Asset
number to be copied from the asset being used as a reference in the
asset create screen.

• Field Group 17

Negative Values: - The negative value option must be optional for joint venture depreciation areas
in SAP Joint Joint Venture Accounting (JVA), due to asset value cutback.

Internal Code
Definition
An internal code refers to a code that is system generated from a number range designated
during configuration. The system determines the next free number in the range and assigns a
code when you save the record. The system does not allow you to specify the code.

Joint Interest Billing (JIB) and Joint Interest

Billing Exchange (JIBE)
Definition
JIB codes are used to classify international region accounts and JIBE codes are used to classify
US region accounts.

JRIU Segment Reverse Actual Assessment

Definition
JRIU is used only as a reference activity.

JRIV Segment Reverse Actual Distribution

Definition
JRIV is used only as a reference activity.

JRPU Segment Reverse Plan Assessment

Definition
JRPU is used only as a reference activity.

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JRPV Segment Reverse Plan Distribution
Definition
JRPV is used only as a reference activity.

JVIU Joint Venture Actual Assessment

Definition
JVIU is used only as a reference activity.

JVIV Joint Venture Actual Distribution

Definition
JVIV is used only as a reference activity

JVPL Joint Venture Plan Data

Definition
JVPL is not used as an activity. Plan data will keep the original activity assigned at the point of
origin.

JVU1 Joint Venture Actual Primary Cost

Transfer
Definition
JVU1 is not used as an activity. This is a reference activity originating from another application.

Master Objects for Cost Calculations

Use
You must set up the following types of master objects to run SAP Joint Venture Accounting (JVA)
cost calculations:

• Cost object types

• Cost calculations rules

• Special cost elements

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Menu Path

On the Display structure menu in the IMG, choose Joint venture accounting → Processing.

Multiple Venture Invoices

Definition
An invoice can only be paid from a single bank account. When expenditures covered in an
invoice apply to more than one venture, payment is made from the venture bank account (VBA)
for the venture that owes the highest amount for the invoice. At a later date, the VBAs for the
other ventures, whose charges are included in the invoice, reimburse this bank account through a
transfer of funds. As with payment from a central disbursement account (CDA), this transfer is
known as a cash switch.

Netting - Carried Interest (CI) and Net Profit

Interest (NPI)
Definition
CI and NPI partnership arrangements involve netting expenses and revenues for the partner to
determine whether or not payout has been achieved. This occurs after cutback. Processing
expenses for ventures that involve CI/NPI arrangements, which includes cutback and CI/NPI
netting, consists of the following steps:

1. Cutback is executed to assign expenses, which were booked to cost objects for a venture, to
the equity group owners, based on their ownership share.

2. CI/NPI netting is then compares expenses generated by cutback with revenues booked to the
CI/NPI partner, to determine whether or not payout has been achieved. For this, the CI/NPI
partner’s revenue must exceed expenses, plus a penalty percentage.

3. If payout is not achieved, CI/NPI netting does not post entries. If payout is achieved, CI/NPI
netting posts appropriate revenues to the CI/NPI partner.

Non-Drilling Pay
Definition
In the Non-Drill. Pay. field, you enter the number indicating the percentage to be applied to non-
drilling costs for the venture, to calculate non-drilling payroll burden. This only applies to the US
region.

Non-Open Item Valuation

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Use
Period-end reconciliation of exchange differences (gains or losses) involves reconciling balance
sheet accounts that are managed in a foreign currency, but are valued in the local currency. The
period transactions against the accounts may balance in the foreign currency, yet leave an
outstanding difference (gain or loss) in the local currency.

To establish the value of the balance of a foreign currency balance sheet account in terms of the
local currency at a certain date, and to assign this local currency balance to SAP Joint Venture
Accounting (JVA) cost objects in CO, you should execute the report program RGJNOUXD. If
execution of the program detects a difference between the foreign currency balance in an
account and the local currency value of that balance (according to a rate specified at the
processing date) the program generates adjustment postings to the venture cost objects of the
company in a batch session.

Establishing the Value of Foreign Currency Account Balance

The local currency value (in terms of the balance of an account managed in a foreign currency) is
established at a specific key date by:

Subtracting the local currency balance, multiplied by the exchange rate for the date, from the
foreign currency balance (converted to local currency using the same exchange rate)

Example
Scenario:

• Given an account managed in US dollars (USD) with a $1000 balance at the beginning of
the period
• Funded and valued in the local currency of Deutsch marks (DM) using a 1.5 USD/DM
exchange rate
• Reduced during the period by a $1000 payment for an invoice at a 1.6 USD/DM
exchange rate
• Leaving a zero US dollar and a 100 DM balance at the end of the period
• Applying the formula the program uses to determine valuation differences results in a
100- DM difference.

The value in terms of local currency of the balance of an account managed in a foreign
currency

Time Acct. Managed in US $ Exchange Rate - Value in Local Currency

DM
Day 1 of $1000 1.5 USD/DM 1500 DM
Period
Invoice Paid $1000- 1.6 USD/DM 1600- DM
during
Period
Balance at 0 1.5 USD/DM 100- DM
end of
Period

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The formula is:

($0 * 1.5 USD/DM) - 100DM = -100DM

Posting Differences to JVA Cost Objects

If the program determines that there is a difference between the foreign currency balance of the
account and the local currency value of the account, it creates a posting.

The difference is prorated among the JVA cost objects (cost centers, orders, WBSs) included by
the program selection criteria (chart of accounts, GL accounts, company) based on the
outstanding balances of those cost objects.

Valuation Formula

Balance for the Cost Object X Exchange Difference = Posting

Sum of Balances for All Cost Objects

Whether the valuation step reveals a gain or a loss resulting from currency exchange against the
account balance, the balance of the cost objects along with the difference determines the specific
valuation posting characteristics produced in the second step of the process.

Valuation Posting Characteristics

If the valuation step reveals:

• A gain has resulted from currency exchange and a positive balance for the cost object,
then the difference is posted as a debit to the currency valuations expense account and a
credit to the foreign currency balance sheet account
• A gain from currency exchange but a negative balance for the cost object, then the
difference is posted as a debit to the foreign currency balance sheet account and a credit
to the currency valuations revenue account
• A loss from currency exchange and a positive balance for the cost object, then the
difference is posted as a debit to the foreign currency balance sheet account and a credit
to the currency valuations revenue account
• A loss from currency exchange and a negative balance for the cost object, then the
difference is posted as a debit is to the currency valuations expense account and a credit
to the foreign currency balance sheet account

Valuation Table

Local Curr. Cost Object Amount to be Foreign Curr. Valuations Valuations

Value of For. Balance Posted Balance Sheet Revenue Expense

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Curr. Balance Acct. Acct Acct.
Sheet Acct.
1. + + + DB CR
2. + - - CR DB
3. - + - CR DB
4. - - + DB CR

Non-Operated Cash Calls

Definition
Non-operated cash calls are requests for payment of prospective expenses, received from an
operator of a venture, in which the company running SAP Joint Venture Accounting (JVA) is a
non-operating partner. You post the transactions as two open items to an operator vendor
account. Like operated cash calls, you post the items with two different special general ledger
entry indicators SEIs, which update the same partner account, but different general ledger
accounts. One open item is cleared with a cash payment to the operator. You clear the other item
manually in the non-operating company’s system, with actual expenditures received in a non-
operated bill from the operator.

Operated Cash Calls

Definition
Operated cash calls are requests to the non-operating partners of joint ventures for payment of
expenses before they are incurred. You post the transactions as two equal and opposite open
items to a partner account. You post the items with two different special general ledger entry
indicators (SEIs). Although the items update the same partner account, they update different
general ledger accounts, which are identified through the SEI. The open item is cleared when
cash is received from the partner.

As an operator, you can also post a cash call to yourself. You post the entries produced by this
type of cash call as memo entries (representing both cash requested and cash received) directly
to the billing ledger. The cash received is posted on the assumption that an appropriate transfer
will be made from the operator bank account to the joint venture bank.

Origin Structure
Definition
The origin structure defines the sending cost elements, to which you originally posted the costs to
be settled.

Partner Netting
Purpose

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Partner netting creates a new clearing entry for each unique combination of partner, equity group,
and venture. To be selected for inclusion in a single clearing entry booked by partner netting, you
must have booked FI accounts receivable entries to the same equity group and venture, as well
as the same partner. All three elements (partner, equity group, and venture) must be the same for
multiple entries, to be selected for clearing by a single entry posted by partner netting.

Process Flow
Partner netting is a two-step process:

1. All open expense items for a partner within an equity group and venture are cleared.
2. A new open expense item, summarizing the previously outstanding cleared expense
items, is posted to the partner’s customer account in FI accounts receivable.

Partner/Venture/Equity Group Cash Call

Definition
Partn/VE CC Threshold is the minimum amount for which you can issue a cash call to a partner in
a Partner/Venture/Equity/Group/Operations Month combination. Any cash calls below this amount
are not posted.

Reclassification
Definition
Reclassification is an SAP Joint Venture Accounting (JVA) process that makes it possible to:

• Create an accounting record of cash call payments, during the month they are received

• Apply cash call payments, during the month expenditures are incurred

• Match payments and expenditures, even though they occur in different accounting periods and
the payment actually precedes the expenditure

Recovery Manipulation Rule

Definition
The recovery indicator manipulation rule allows you to define rules that indicate how the recovery
indicators for the sender and receiver records, resulting from allocations, should be determined.
You assign this rule during configuration.

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Segments
Definition
Segments contain information about how costs are to be allocated between sending cost centers
and receiving cost objects. During execution of the assessment or distribution, the costs collected
in the sending cost centers are allocated to the receiving cost objects. The costs are allocated
from the sending cost centers using the same allocation sender rule, and the costs are processed
by the receiving cost objects using the same rule for tracing factors. Because you need to use a
different allocation sender rule or different tracing factor for some senders or receivers, you
should set up a separate segment. During execution of the allocation, the segments are
processed sequentially.

Service Agreement
Definition
A service agreement exists when a company running SAP Joint Venture Accounting (JVA)
operates a venture in which it holds no ownership interest. This agreement is a special type of
operated venture.

On the Joint Operating Agreement: Equity Groups screen, you should leave the OperShare and
the NonOpShare fields blank to indicate that the company running SAP JVA does not hold an
ownership interest.

On the Joint Operating Agreement: Partner Shares screen, you should enter the percentage of
the partners’ interest. The sum of the partners’ interest must equal 100%.

Settlement Structure
Definition
The settlement structure defines the secondary cost element used to post the results of the
settlement to the receiving objects.

Special Cost Elements

Use
As part of SAP Joint Venture Accounting (JVA) cost calculations, you can set up special cost
elements to receive the FI postings that result from payroll burden costs computed in cost
calculations. Alternatively, payroll burden postings generated by SAP JVA cost calculations will
be booked to the cost elements associated with the original FI posting of expenditures.

Cost elements may be either primary or secondary.

• Primary cost elements are part of the general ledger account master.
• Secondary cost elements are used exclusively for internal cost accounting.

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Only primary cost elements can receive the FI payroll burden postings generated by SAP JVA
cost calculations. When you set up cost elements in CO to receive payroll burden postings
generated by SAP JVA cost calculations, you should ensure that they are primary cost elements.

If you enter a cost element in the Special Cost Elements table, it is identified as a Drilling cost
element for U.S. Payroll Burden. If both the cost element and the cost object (established via the
JVA cost object type) are set up for Drilling, the drilling rate is applied to the expenses booked to
this element and cost object. If either the cost element or the cost object is not set up for Drilling,
the non-drilling rate is applied.

Menu Path to Access Cost Calculations Special Cost Elements

On the Display structure menu, choose Joint venture accounting → Processing → Cost
Calculations → Risk Labor Cost Elements.

On the JV Special Cost Elements - Payroll Burden: Overview screen that appears, select New
Entries to set up a new special cost element for your company.

The New Entries screen appears.

Tax Code
Definition
Tax code represents a tax category which is taken into consideration when making a tax return to
the tax authorities.

Transaction Types
Definition
The Asset Management transfer programs reference this SAP table, by using the Transaction
Type (TTY) Groups as the key.

TTY/Transaction Types

TTY Transaction Types

100 Acquisition
200 Retirement
29A Retirement Adjustment
300 Transfer - Closing - Credit
310 Transfer - Receiving Debit
390 Transfer - Retirement
190 Cash Proceeds - Credit
191 Cash Proceeds - Debits

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Transferring Funds Between Venture Bank
Accounts (VBAs)
Definition
SAP Joint Venture Accounting (JVA) supports the following types of fund transfers between
VBAs:

• Payment from a Central Disbursement Account (CDA)

If an invoice is paid from a CDA, the appropriate VBAs or house banks must reimburse the CDA
by transferring funds from the VBAs to the CDA. This type of transfer is referred to as a cash
switch.

• Multiple Venture Invoices

An invoice can only be paid from a single bank account. When expenditures covered in an
invoice apply to more than one venture, payment is made from the VBA for the venture that owes
the highest amount for the invoice. At a later date, the VBAs for the other ventures whose
charges are included in the invoice reimburse this bank account through a transfer of funds. As
with payment from a CDA, this transfer is known as a cash switch.

• Allocations Between Ventures

This transfer is necessary when one venture pays an invoice but another is billed for the same
invoice. In this case, an expense allocation is made in CO from the venture that pays the invoice
to the venture that is billed. The VBA for the venture receiving the allocation must reimburse the
VBA for the venture that paid the invoice. This transfer is a non-cash switch, because no cash is
involved in the allocation.

Transfers of Automatic Postings to CO

Use
The standard SAP Joint Venture Accounting (JVA) Integration Manager currency posting process
provides the joint venture information for automatic postings. But automatic posting lines do not
contain cost object designations, so the CO record associated with the cost object is not updated
through automatic postings.

To reconcile the CO and SAP JVA records for automatic postings (including realized exchange
differences), your system administrator should execute the special report program RGJVRXDT at
the end of the accounting period. This program creates an FI posting that balances the RXD
account to which the original FI line of realized exchange difference was posted. The offsetting
entry is posted to the cost element defined in the special accounts table.

You can use this same program (RGJVRXDT) to transfer the results of automatic postings of
realized exchange differences or other types of transactions (such as discounts, bank charges, or
taxes) to CO.

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Τωο σετσ οφ ΣΑΠ ϑςΑ ποστινγ ρυλεσ χαν γοϖερν τρανσφερσ οφ αυτοµατιχ ποστινγσ το ΧΟ, δεπε
νδινγ ον ωηετηερ ψου αρε προχεσσινγ τηε ρεσυλτσ οφ ρεαλιζεδ χυρρενχψ εξχηανγε διφφερενχεσ
ορ οτηερ αυτοµατιχ ποστινγσ. ΣΑΠ ϑςΑ ποστινγ ρυλεσ αρε ασσιγνεδ ιν ΣΑΠ ϑςΑ χονφιγυρατιον
το γοϖερν εξεχυτιον οφ µαϕορ ΣΑΠ ϑςΑ φυνχτιονσ. Τηε ρυλεσ τηατ γοϖερν τρανσφερσ οφ αυτοµ
ατιχ ποστινγσ αρε ασσιγνεδ φορ τηε φολλοωινγ φυνχτιονσ:

• RXD Realized Exchange Difference

• COAC Other Automatic Postings

Unrealized Exchange Differences

Use
To make the results of unrealized exchange processing in FI through SAPF100 available in SAP
Joint Venture Accounting (JVA) to be billed to partners, you must forward the venture information
related to these postings to SAP JVA, by executing the following process:

1. Execute SAPF100, posting the results to a UNIX file rather than to an FI posting, by
entering a file name in the File name field of the Posting parameters area of the Open
Item Foreign Currency Valuation per DD.MM.YY screen on which the FI revaluation
process is executed.
2. Execute RGJVUXDT, the SAP JVA program for processing unrealized exchange
differences, by entering the filename of the UNIX file created in step one in the
Datasetname from SAPF100 field of the Unrealized Exchange Difference Transfer (UXD
to CO) screen on which the process is executed.

Optional Transfer of Unrealized Exchange Differences to CO

You can define the account that receives the posting from Unrealized Exchange Difference
Transfer as either a cost element or a balance sheet account.

• Defined as a cost element

The exchange difference posting will include the cost object. Posting information will be
forwarded to CO, as well as to SAP JVA.

• Defined as a balance sheet account

You must make the cost object information available when you set up the balance sheet account
in FI to enable batch processing. Posting information will only be forwarded to SAP JVA and not
to CO.

Venture Bank Account (VBA) Switching

Attributes
Definition
• VBA Switching and CO Cost Objects

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VBA switching cannot be used when CO cost objects are designated in postings because the
netting involved in this process eliminates the correspondence between expenditures and cost
objects.

• Interest Charge

A nominal interest charge may be added to the switch based on the entry made on the JV
Funding Group Assignment screen for the bank account receiving the refund. Interest is
calculated based on the difference between the value date of the document (usually the same as
the posting date) and the effective date specified for the run of the switching program.

• Batch Input Session

You can execute the program to prepare a batch input session of bank transfers. Alternatively,
the program will generate letters requesting a transfer of funds that will be sent to banks.

• Timing of Bank Switching Runs

You may execute the program any number of times during the period. Regardless of how many
times you run the bank switching program during the period, you must execute the program at the
end of each period following allocations in CO and before Cutback, if interest charges are
involved.

• Bank Switching Reports

The bank switching program generates four reports:

listing of all switches giving details of cash and non-cash switches, interest charges,
and mean effective date (where applicable)

formatted letters to the managers of venture bank accounts, requesting a transfer of

funds to other venture bank accounts

batch input summary (name of any batch input session generated and the number of
transactions included)

list of errors and warnings encountered during the program run

• VBA Switching and Exchange Differences

Transfers from the transfer account to the firm account may result in currency exchange
differences. If exchange differences are billed or booked to CO, you must execute VBA switching
with cost object analysis.

• Balanced Ventures

If your company manages joint ventures on a balanced venture basis, you should specify a
special venture bank account switching cost center, which will be used to post switches, on the
Joint Venture Master: Bank Account Switching screen for all ventures. Also, running bank
switching will calculate and post non-cash switches that clear the interventure suspense account.

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Venture Bank Account (VBA) Switching Process
Use
The VBA switching program:

• Reads all documents posted during a particular period

• Identifies documents that involve net movements of expenditures between ventures

Each identified document is used to calculate a transfer of funds between the bank accounts
associated with the unbalanced ventures. You can execute the VBA switching program so that it
summarizes switches through a netting algorithm. This procedure removes redundant switches
and reduces the total number of switches to two switches with a single link. The netting that
results minimizes correspondence with external banks.

Cash and Non-Cash Switches

A cash switch is a document requiring a payment. A non-cash switch does not require a payment.
Payments originating from the general ledger accounts that are identified as banks by being
associated with funding groups on the JV Bank Accounts screen are considered cash switches.
Cash and non-cash switches are summarized and reported separately. The effective date of the
summarized switches is calculated as a weighted average of the individual switches.

Unit of Production
Definition
The unit of production method of depreciation is specific to the:

Company code

Depreciation key

• Depreciation keys are the highest level of configuration for the depreciation formula. The
depreciation key is the element that is linked to each individual asset, usually defaulted
from the asset class.
• Depreciation keys are company code specific and are under the chart of depreciation.
• Each depreciation key must hold an Internal Calculation Key for each type of depreciation
posting to be processed. The calculation key defines all the details of the calculation
formulas.
• The Control Indicators within the depreciation key are additional switches to regulate
other depreciation postings and fiscal period control by depreciation key level. For joint
venture accounting, the only control indicator necessary is the "Acquisition only allowed
in capitalization year" switch. This function will limit incorrect joint venture asset transfers
in closed fiscal years through error messages.

The method by which your company policy defines the calculation key, determines the monthly
percentage to be applied to the asset base producing at that source.

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Period Unit

You enter the monthly production of the plant, field, or well in the Period Units column.

Total Units

When you select Depreciation Method S in the Calculation Key, the applied monthly percentage
will be the result of the period units divided by the total units for the period.

Remaining Units

When you select Depreciation Method T in the Calculation Key, the applied monthly percentage
will be the result of the period units divided by the remaining units for the period.

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