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Table of Contents
1 Activating Joint Venture Accounting..................................................................................................... 5

2 Create Operator as the Customer and the vendor ............................................................................... 7

2.1 Create Customer ........................................................................................................................... 7

2.2 Create vendor ............................................................................................................................. 10

3 JVA Global Data ................................................................................................................................... 17

4 Activate joint venture in co. code ....................................................................................................... 20

5 Master data Number range ................................................................................................................ 21

6 JOA Class ............................................................................................................................................. 35

7 Venture Class ...................................................................................................................................... 39

8 Equity Types ........................................................................................................................................ 42

9 Create Joint Operating Agreement – Corporate ................................................................................. 45

10 Create Joint venture (corporate) .................................................................................................... 47

11 Recovery Indicators......................................................................................................................... 55

12 JVA Corporate Data ......................................................................................................................... 59

13 Billing Structure............................................................................................................................... 63

14 CI Penalty Categories ...................................................................................................................... 75

15 JVA Cost center object types........................................................................................................... 77

16 Billing Indicator ............................................................................................................................... 83

17 Layout Set Assignment .................................................................................................................... 87

18 Billing Formats ................................................................................................................................ 96

19 JVA Detailed Data.......................................................................................................................... 100

20 Activate Joint Venture Accounting in Company ........................................................................... 102

21 Copy Configuration from Company .............................................................................................. 107

22 Additional Ledgers ........................................................................................................................ 108

23 Overhead Rate Types .................................................................................................................... 109

24 Projects/WBS Elements ................................................................................................................ 112

25 Clearing procedures ...................................................................................................................... 121

26 CI Groups ....................................................................................................................................... 130

27 Processes....................................................................................................................................... 133

28 Posting Methods ........................................................................................................................... 135

29 Configure the document number range to be assigned to FI document types............................ 138

30 Configure FI Document type ......................................................................................................... 140

31 Create Special GL indicator ........................................................................................................... 149

32 Change posting keys ..................................................................................................................... 165

33 Posting Rules ................................................................................................................................. 182

34 RI Manipulation Rules ................................................................................................................... 226

35 Maintain Statistical Key figures ..................................................................................................... 232

36 Distribution ................................................................................................................................... 233

37 Cutback Control ............................................................................................................................ 240

38 JV Non-Operated Billing Form....................................................................................................... 242

39 JV Non-Operated Billing Form Line Item Details........................................................................... 244

40 Classify document types for Document Splitting.......................................................................... 250

41 Creating Number range for Document type A0 ............................................................................ 253

1 Activating Joint Venture Accounting

Transaction code: SFW5 or SWF2

Click
Click

Click

Click
2 Create Operator as the Customer and the vendor

2.1 Create Customer

Transaction code: FD01

Click
2.2 Create vendor
Transaction code: FK01
Link customer to vendor
3 JVA Global Data

SAP Customizing Implementation Guide  Joint Venture Accounting  Environment  JVA Company
Configuration  Global Data

The creditor which we created just now needs to be updated in the operator field.

Click on

Update the following:-

Region – USA
Billing basis
Click on
4 Activate joint venture in co. code

IMG  Financial Accounting (New)  Financial Accounting Global Settings (New)  Global Parameters
for Company Code Enter Global Parameters

Click on
5 Master data Number range
SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  Number Range
Maintenance

In configuring JVA, we must specify the following three types of number ranges:

• Number ranges for JVA documents created by the JVA process Cutback and for documents created
by the other JVA processes

• Number ranges for the processing master data objects (joint operating agreement (JOA) and joint
venture (JV))

• Number range for the billing record number index

Select

Click
Click
Click on

Come back and select

Click
Click

Click on
Click
Click
Click on
Click back
6 JOA Class

SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  JOA Class

The joint operating agreement (JOA) is the highest level object used in expense processing in JVA. The other
processing master data objects (JV and equity group) used to capture joint venture expenses are assigned
within the JOA.
We will define 3 JOA classes:-

1) Corporate

2) Non-Operated

3) Operated
Click on
Update the following:-

Click on
7 Venture Class

SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  Venture Class

The joint venture (JV) is the property level object within JVA. JVs are defined within JOAs, and equity
groups (groups of owners with partner shares specified) within the same JOA are assigned to ownership
of these JVs.

We will create 3 Venture classes:-

1) Corporate

2) Non-Operated

3) Operated
Click on
Update the following:-

Click on
8 Equity Types
SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  Equity Types

Equity types are JVA objects that are used to connect equity groups, which are set up on the joint operating
agreement (JOA), to ownership of joint ventures (JV), which are also connected to the same JOA as the equity
group, as of a particular point in time. Essentially the equity type hooks a start date for ownership to an equity
group and a JV.

The equity type can also be used to identify the equity group that is responsible for the expenses incurred
during a particular phase or stage in the life of a venture. It is possible to assign two equity groups, each with a
different equity type, as owners of the same venture for the same period.

A JVA company might maintain three different equity types, each of which represents a specific phase in the
life of its joint ventures. For example, an equity type might be set up for the following phases: design,
development, production. This would result in the following entries on the JV Equity Types screen:

E01 Design

E02 Development

E03 Production

As equity groups are assigned to ownership of JVs in JVA processing, the equity type that represents the
appropriate phase of the JV would be selected to connect the equity group to the JV. In this way, the equity
type could be used to denote the phase of the venture during which a particular equity group owned the JV.
Click on
Update the following:-

Click on
9 Create Joint Operating Agreement – Corporate

Transaction code: GJAA

Click
Click on

10 Create Joint venture (corporate)

Transaction code: GJVV

Click
Click
Double click E01
Update valid from date to

Click
Click on
11 Recovery Indicators

SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  Recovery
Indicators

JVA recovery indicators (RI) are assigned to posting lines. The particular recovery indicator assigned to a
posting line determines whether the expense is billable to partners.

The JVA process Cutback uses billable recovery indicators to select those expenses that will be assigned to
partners based on their equity shares in ventures.

Recovery indicators can be specified at the following levels of postings:

• Document type

• Account
 • Cost object

• Manual override during posting

• JVA integration manager

Settings listed later in this list take precedence over those provided by items listed earlier. That is, a recovery
indicator entered manually during posting will override the recovery indicator provided by the cost object.

If a recovery indicator is not provided by any of the preceding sources, the JVA intergration manager will
determine the recovery indicator for the posting line based on a set of rules that reflect choices made during
company configuration. If the integration manager cannot derive joint venture and equity group designations,
the expense will be assigned to the corporate venture and equity group defined on the Corporate Data screen
for the JVA company.

In defining a recovery indicator, you should fill in the following fields when appropriate:

In the RI field, enter the code for the recovery indicator.

In the Billable field, enter an indicator if the recovery indicator being defined will be assigned to expenses that
are billable to JVA partners.

In the Susp.RI field, enter the code for the recovery indicator that will be assigned to expenses carrying the
recovery indicatory being defined if the partner or equity group is placed in suspense.

In the Corp.pay field, enter an indicator if the recovery indicator being defined will be assigned to expenses
that should be funded entirely by the company being configured in JVA.
Click on

Update the following:-

Click on

Now update the suspense recovery indicator:-

Click on
12 JVA Corporate Data

SAP Customizing Implementation Guide  Joint Venture Accounting  Environment  JVA Company
Configuration  Corporate Data

Corporate joint venture created in the earlier step needs to be assigned here.
Update the following:-
Click on

13 Billing Structure

SAP Customizing Implementation Guide  Joint Venture Accounting  Billing Operated Billing
Structure

A single billing structure should be defined for each JVA company. The billing structure can be viewed as a
billing variant used by the company.

Billing structures are defined by JVA region, which controls the way billing functionality, operates. The billing
structure determines which billing documents will be generated for the company's operated ventures or non-
operating partners.

There are two possible bases for determining capital expenditures. The JVA cost object type assigned to the
WBS's or internal orders to which expenses are booked can carry a capital indicator. The JIB/JIBE code can
determine whether the expense is capitalized. Only one of these methods can be specified for a company's
billing structure. If the indicator Capital der. fr. JIBE is selected capital expenditures will be determined by the
JIBE code. If you leave the indicator unselected, capital expenses will be determined by the JVA cost object
type assigned to the CO cost objects to which the expenses are posted.

For each JVA company, billing documents are issued by partner or by venture. This selection is made on the
billing structure. You should set the Invoice Level field to V if billing documents are to be generated for each
venture. You should set the level to P if billing documents are to be generated for each partner including
expenses for all the ventures in the company in which the partner holds a share.

The various settings for Expenditure detail determine the levels of detail of information to be included in the
paper expenditure detail document.

In the FT or form type field, you should enter a code for the type of billing document to be generated

Click on
Update the following:-
Click on

Double click

Click on
Update the following:-

Click
Double click and press enter
Click on

Click

Click on
Update the following:-

Click
Double click
Click on

Similarly Click on
14 CI Penalty Categories
SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  CI Penalty
Categories

Penalty categories are used in carried interest (CI) processing. Penalty categories identify categories of
expenses (e.g., drilling, completion).

Percentages are assigned to these categories on the JOA. These percentages will be applied to the CI
partner's share of the JV's expenses. Expenses are associated with a penalty category via the cost objects to
which the expenses are booked. This calculation constitutes a surcharge that compensates the partners who
are carrying the CI partner's expenses for the risk of the activity that the penalty category represents.

When a partner in an equity group within a JOA enters CI status, either by failing to sign the JOA or by
declining to fund JV expenses, the partner is placed in the appropriate CI status in the equity group on the JV.
One or more of the other partners in the equity group are assigned responsibility to carry the CI partner's share
of the JV's expenses.

Before this can happen, the following actions must be taken:

• Penalty categories must be defined for the company in configuration

• These penalty categories must be assigned to the cost object types that will be used to set up the cost
objects (cost centers, internal orders, WBS elements) for the JV

• Penalty percentages must be defined for the CI status and penalty categories on the JOA

Click on

Various penalty categories in Oil drilling industry can be as follows:-

Update the following:-

Click on
15 JVA Cost center object types

SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  Cost Object
Types  Cost Centers

Cost centers are separate cost objects to which expenses can be booked. When you define a cost center to
which joint venture expenses will be posted, you must assign a JVA cost center object type to that cost center.
These cost object types carry settings that are relevant to JVA processing of the expenses. The cost object
types for cost centers are defined in this step of JVA configuration.

The cost calculation and CI penalty category information provided by JVA cost object types is relevant
only to US and Canadian region companies.

In defining a JVA cost object type for cost centers, you should fill in the following fields:

In the Control Drilling field, enter an indicator if the cost object type will be assigned to cost centers that are
used to capture drilling costs. This field is used by JVA payroll burden processing to determine whether the
percentage specified for drilling on either the JOA or the JV should be applied to costs booked to cost centers
that are assigned this cost object type.

In the Control JV field selection field, enter an indicator for suppressed, optional, or mandatory. This setting
will determine whether entering the JVA information JV, equity type, and recovery indicator will be prevented,
allowed, or required on the cost centers to which the cost object type is assigned.

In the Cost Calculations JV OH Type field, enter the code for the cost calculations type for the overhead
calculation to be applied to expenses booked to cost centers that are assigned this cost object type. Overhead
types that are appropriate for both Canadian and US region companies are supported.

In the Carried Interest Control Penalty Categoy field, enter the code for the penalty category that should be
assigned to costs booked to an equity group with a CI partner via a cost center that is assigned this cost object
type

We assign the penalty category C (Operation) to cost object type CC03.

Click on
Update the following:-

Click on

Click on
Update the following:-

Click on
Click on

Update the following:-

Click on
Click on
16 Billing Indicator

SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  Billing Indicator
 Master Data

Billing indicators are assigned to postings to partners in JVA. They are used to identify specific types of billable
expenses (e.g., cash call requests, normal expenditure, suspense posting), and they can be used to identify
revenue postings to partners as well.
Billing indicators are used to organize different types of expenses on the partner's bill (invoice). That is, they
are used to selectively access data from the JVA billing ledger (4B) to generate the invoice.

JVA is pre-configured with the standard billing indicators that are necessary to execute normal processing. This
includes a complete set of indicators for the following processes:

• Cash call processing

• CI/NPI processing

• Suspense processing

It also includes billing indicators for audit and equity adjustments, tax postings, netting, and revenue postings
as well as for regular expense postings and expense postings directly to partners.

In defining billing indicators, enter information in the following fields when appropriate:

In the Taxable field, enter an indicator if expenses posted with the billing indicator being defined will be subject
to tax calculations.

In the Taxline field, enter an indicator if the billing indicator being defined will be used to post tax lines to
partners.

In the RevId field, enter an indicator if the billing indicator being defined will be used to post revenues to
partners.

In the CCPay field, enter an indicator if the billing indicator being defined will be used to post cash call
payments from partners.

Generally, you will only require one billing indicator to post cash call payments, but you should consider the
entire context of configuring your company for cash calls.

In the CNET field, enter an indicator if postings with the billing indicator being defined will be selected for
inclusion in convenience netting processing (i.e., netting of all expense and revenue postings to a partner into
one credit posting if there is a positive outstanding balance).

If you set Taxline or RevId on for the billing indicator, document lines with the billing indicator will be selected
when convenience netting is executed. But you may add lines with other billing indicators as well (i.e., lines with
expense billing indicators) to convenience netting selection by setting the CNET field on for the billing indicator.

In the ExpT field, enter the second character of the billing indicator if the billing indicator being defined will be
used to post CI costs.

Billing indicators that will be assigned to CI postings have a special structure. The first character of the billing
indicator must be a "P", and the second character must be the code for the CI penalty category defined
previously for the company during JVA configuration.

The CI billing indicator defined in this step will be used in the posting rule details for its corresponding function
item of the JVA cutback function. This function item of cutback has the same code as its corresponding billing
indicator, and the posting rule details for this function item assign the billing indicator for the penalty type to the
posting resulting from Cutback processing.

To have postings to a partner included in convenience netting (CNET) processing, the partner's JVA partner
record must have CNET (i.e., C) active.
As per the system requirement we have defined the Billing indicators for CI partners with penalty
prefixed with P and the penalty category

So for e.g.

PA – Penalty Drilling

PB – Penalty completion and likewise PC, PD etc.

Click on

Update the following:-

Click on
Click on

Update the following:-

Click on
17 Layout Set Assignment

SAP Customizing Implementation Guide  Joint Venture Accounting  Billing Operated Layout
Sets  Layout Set Assignment

Since this layout set is assigned to a document type that indicates it is an invoice, it is necessary to map billing
indicators to line items in the billing document.

Click on

Update the following:-

Click on

Select
Double click

Click on
Update the following:-
Click on

Double click

Click on
Update the following:-

Click on

The elements to be assigned can be checked from the FORM as follows:-

Transaction code: SE71

Click on
Double click on
Click on
Similarly you can do for other form JV_NPI_CI_STAT

18 Billing Formats

SAP Customizing Implementation Guide  Joint Venture Accounting  Billing Operated Layout
Sets  Billing Formats

The billing format can be viewed as a further division of the billing variant (i.e., the billing structure) for the
company. Billing formats determine what documents will be printed for the partner or venture:

• Invoice

• Statement

• Expenditure detail

The billing format is essentially a list of the types of documents to be generated for a venture or partner with the
format for each type specified as well. The billing format makes it possible to assign different layout sets for the
various billing documents to different partners or ventures. Thus, different formats can be used in printing these
documents.

Depending on whether billing is done for the company at the partner or venture level, billing formats are
customized formats for partners or ventures. The selection of whether billing is performed for partners or
ventures is made on the billing structure.

Click on
Update the following:-

Click on
Select

Double click

Click on
Update the following:-

Click on
19 JVA Detailed Data

SAP Customizing Implementation Guide  Joint Venture Accounting  Environment  JVA Company
Configuration  Detailed Data

You may specify the maximum number of equity groups allowed to be active (i.e., expenses can be posted to
it) at one time for a combination of equity type and joint venture for the company by entering a number in the
Max. Activ E. Grps. field.

You may choose to post corporate documents as well as joint venture documents in JVA by selecting Post
corp docs in JV. Posting corporate documents in JVA could significantly increase the size of the JVA ledgers.

Settings for Asset and Material Management for JVA

To configure functionality based in the standard AM and MM modules for special use by JVA, you should enter
settings for the following:

In the Chart of dep. field, you should specify the chart of depreciation for the JVA company. This must be set
up in Asset Management configuration.

In the Assign asset to vent field, you should specify the type of the CO cost object that should be used to
determine the venture that owns an asset. Joint ventures are set for each cost object when it is defined.

To track billable and non-billable postings to assets, AM links recovery indicators for these two types of
postings to specific depreciation areas. The following three fields are used to identify the depreciation areas or
sets of asset books that will be maintained for the JVA company. These fields indicate whether the costs
booked in each area are billable or non-billable.

Net book postings will be stored in the depreciation area specified in the Book depreciation field. Standard
asset accounting in SAP designates depreciation area 01 as the book depreciation area.

Gross billable costs will be stored in the depreciation area specified in the Billable Cost Area field. Gross non-
billable costs will be stored in the depreciation area specified in the Non-billable cost field.

There is a Selection field on every AM transfer screen. You can link this field to a specific field of the asset
master record to identify more precisely the type of asset being transferred. To link the selection field to a field
of the asset record, specify the table containing the asset master record in the Table name field and the field
containing the record to be used to identify the type of asset in the Field name field. ANLA-ORD41, for
example, represents the EVAL 1 on all asset master records.
Click on

20 Activate Joint Venture Accounting in Company

SAP Customizing Implementation Guide  Joint Venture Accounting  Environment  JVA Company
Configuration  Activate Joint Venture Accounting

JVA is delivered with ledger 4A as the summary ledger (JVTO1) and 4B as the billing ledger (JVT02). 4A
contains expense postings to joint venture/ equity groups, and 4B contains the postings to partners that result
from cutback processing or direct posting.
Two additional ledgers are also delivered with additional currencies. 4C is based on JVTO1 and includes hard
and index currency. 4D is based on JVTO2 and also includes hard and index currency.

Before you activate the company in JVA, you should specify all configuration information for the company in FI
and in JVA, including defining any additional ledgers.

.
Update the following:-

Click
The JVA Company is now activated with this step, you can check using transaction code GJZA or the
configuration path:-

SAP Customizing Implementation Guide  Joint Venture Accounting Environment JVA Company
Configuration  Global Data
21 Copy Configuration from Company
SAP Customizing Implementation Guide  Joint Venture Accounting  Environment  JVA Company
Configuration  Copy Configuration from Company

It is possible to copy JVA configuration from one company to another.

22 Additional Ledgers
SAP Customizing Implementation Guide  Joint Venture Accounting  Environment  Ledgers 
Additional Ledgers

You may set up extra ledgers in addition to those delivered for JVA by defining the characteristics of the
new ledgers during company configuration. You may add ledgers as necessary to support your
company's currency processing needs.

Note: You can only add ledgers before you activate the company for JVA.
23 Overhead Rate Types

SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  Overhead Rate
Types

The overhead burden expense total is calculated by multiplying the total billable expense by the burden rate
type percentage. A percentage rate must be defined for each rate type.

Rate types will be activated at the Company Code level. Once they have been activated, they are available for
use on the Venture or JOA.

Override percentages for rate types can be defined on the Venture.

Burden rates can be updated in the JOA and the JVA master data.
Click on
Burden rates for oil drilling industry can be kept as follows:-

Update the following:-

Click on
24 Projects/WBS Elements

SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  Cost Object
Types  Projects/WBS Elements

Work breakdown structures (WBSs) are cost objects that represent separate tasks within a project. When you
define a joint venture related project along with its component tasks (WBSs) in CO, you should assign a JVA
cost object type to each WBS. The JVA cost object types for WBSs are defined in this step of JVA
configuration.

The cost calculation and CI penalty category information provided by the WBS cost object type is only relevant
to US and Canadian region companies.

For companies in which JVA is active and the field status setting for the cost object type is set to mandatory on
the JVA Company Global Data screen, assigning a JVA cost object type to all cost objects when you set them
up in CO is required. If documents that are unrelated to JVA are also posted to cost objects in the company,
you may choose to make JV field selection optional or suppress it for cost object types that will be assigned to
cost objects that will receive non-JVA postings.

The following fields in configuration are relevant:-

In the Control Capital field, enter an indicator if the cost object type will be assigned to cost objects used to
capture capitalized costs. During execution of the JVA billing data extract process, this indicator is used to
derive additional detail information (i.e., capital expense type) for expenses provided by the JVA ledger.

In the Control Drilling field, enter an indicator if the cost object type will be assigned to cost objects related to
drilling. This field is used by JVA payroll burden processing to determine whether the percentage specified for
drilling on either the JOA or the JV should be applied to costs booked to WBS's that are assigned this cost
object type.

In the Control MR-Override allowed field, enter an indicator if the recovery indicator provided by the
manipulation rule defined for CO allocations should override the recovery indicator assigned to the cost object
that is assigned this cost object type when costs are transferred from one to another WBS.

In the Control AFE indicator field, enter an indicator for either the AFE being at the project or WBS level or for
no AFE being involved. During execution of the JVA billing data extract process, this indicator is used to derive
additional detail information (i.e., AFE identification) for expenses provided by the JVA ledger.

Because of the hierarchical relationships of WBSs within projects, it is possible to use this indicator to
consolidate expenses booked to multiple WBSs at the AFE level for display on the billing expenditure detail.

In the Control JV field selection field, enter an indicator for suppressed, optional, or mandatory. This setting
will determine whether entering the JVA information JV, equity type, and recovery indicator will be prevented,
allowed, or required on the WBSs to which this cost object type is assigned.

In the Cost Calculations JV OH Type field, enter the code for the cost calculations type for the overhead
calculation to be applied to expenses booked to cost objects that are assigned this cost object type. Overhead
types that are appropriate for both Canadian and US region companies are supported
In the Carried Interest Control Penalty Category field, enter the code for the penalty category that should be
assigned to costs booked to an equity group with a CI partner via a WBS that is assigned this cost object type.

We configure various JV project types one without penalty category and others with penalty category and JV
overhead type.

Click on
Update the following:-

Click on
Click on

Update the following:-

Click on

Click on
Update the following:-

Click on

Click on
Update the following:-

Click on

Click on
Update the following:-

Click on
Click on
25 Clearing procedures
SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  Billing Indicator
 Clearing Procedures

JVA billing indicator clearing procedures are used to assign billing indicators to JVA clearing postings from FI.

These clearing procedures are used to select postings with a particular billing indicator (i.e., postings a certain
type of expense) and substitute another billing indicator during clearing.

Determining which billing indicators should be subject to this translation and which indicators should be
substituted during clearing requires a thorough consideration of the specific business requirements of the
company, particularly with regard to which expenses should appear on the partner's billing documents.

It is necessary to customize billing indicator clearing procedures to meet the special needs of different
companies.

If you have activated billing and operational month for cash call processing for the company and you have
accepted the standard billing indicators (i.e., Cash Call Request = 1 and Cash Call Payment = 2), you would
want cash call requests to be cleared against payments with a billing indicator for cash call payments, so you
would configure the billing indicator clearing procedures as follows:

Billing Indicator as 1

JV clearing Billing indicator as 2

When the cash call payment is received and cleared against the request in FI (transaction FB05), the request
(which was assigned a billing indicator of "1" in the JV document) will be matched against the payment and a
credit will be booked to the partner with a billing indicator of "2".

The clearing procedures define which posting keys can be used for clearings to customer, vendor, and GL
accounts. They are defined as part of standard FI configuration. The following clearing procedures are
delivered pre-configured for JVA:

Clearing Procedure Description

JVACLEAR Regular Clearing
JVACLPMT Convenience Netting
JVAPAYIN Incoming Payment
JVAPAYMT Outgoing payment

In case the above clearing procedure is not available pre-configured, you can configure it as shown
below:-

Accounts Receivable and Accounts Payable  Business Transactions  Open Item Clearing  Define
Posting Key for Clearing Open Items

Click
Update the following:-
Update the following:-

Click on
Click on

Click on
Update the following:-

Click on
26 CI Groups

SAP Customizing Implementation Guide  Joint Venture Accounting  Master Data  Partner Groups
CI Groups

A carried interest (CI) condition may occur when a venture partner either fails to sign the agreement or declines
to fund a venture activity. The partner is placed in CI status, and his expenses and revenues are carried by the
other venture partners, who can be assigned different shares of the carried interest. The partner remains in CI
status until, the revenues for the CI share exceed expenses by a specified percentage, at which time the CI
partner reverts to a full working interest partner.

In this step of JVA configuration, you can define groups that will be used to select the CI partners assigned to
them for period-end CI/NPI netting.

To set up CI processing, it is imperative to set up the following:-

1. Defined penalty categories for CI

2. Assign penalty categories to JVA cost object types
3. Defined billing indicators for the CI penalty categories (with P as the first character and the number
of the penalty category as the second character)
Click on
Update the following:-

Click on
27 Processes

SAP Customizing Implementation Guide  Joint Venture Accounting  Processing  Processes

Each JVA process consists of a function and its dependent set of function items. The function and its function
items control execution of the JVA process. A set of posting rules is contingent upon each function item. This
set of posting rules determines the characteristics of the posting lines that result from execution of the process.

Execution of a specific JVA process for a company is affected by the settings in JVA company configuration.

A complete set of functions for all JVA processes is preconfigured in JVA as a group of company
independent objects.

We recommend that the Standard SAP processes will generally meet all business needs and we will not
change the standard configuration.

.
28 Posting Methods
SAP Customizing Implementation Guide  Joint Venture Accounting  Processing  Posting  Posting
Methods

The posting method is a JVA configuration object that can be used to:

• Enable cash calls for joint ventures

• Exclude postings to specific ventures from inclusion in the execution of certain JVA processes.

As part of defining a posting method, you must select whether cash calls are allowed under the posting
method.

When you set up a JV in JVA processing, you must assign a posting method to the JV. At a minimum this
posting method will indicate whether cash calls are allowed for the JV.

Posting method is also used as a criterion to select postings for inclusion in execution of the following additional
JVA processes:

• Cutback

• Equity Adjustments
 • Non-operated billing

• Tax postings

Since assigning a posting method to a JV is required when you define the JV, you must set up at least one
posting method for your company during configuration.

If cash calls are not allowed under the terms of some agreements, you may need to define one posting method
for which cash calls are allowed and another for which the cash call indicator is not selected.

If posting method is to be used to selectively exclude postings to certain ventures from inclusion in the
execution of certain other JVA processes, you may need to define additional posting methods.

Click on
Update the following:-

Click on
29 Configure the document number range to be assigned to FI
document types
Transaction code: FBN1

Click
Click

Click on
30 Configure FI Document type
Transaction code: OBA7

Configure the following document types

Click on

Now update the reversal document

Click and update the description
Click on

Click on
Update the following:-

Click on

Update reversal document type DK

Click on
Similarly create

Similarly create
Configure document type

Click on

Update the following:-

Click on
Click on
31 Create Special GL indicator

Transaction code: OBXY

Click
Click on
Click on
So we have now configured the following special gl indicators:-
32 Change posting keys

Change posting keys using transaction code OB41

Click
Update Spl. GL indicator L
Click on

Similarly for posting key 39

Click on
Switch Special GL indicator on for posting key 0A
Select
33 Posting Rules

SAP Customizing Implementation Guide  Joint Venture Accounting  Processing  Posting  Posting
Rules

Posting rules are contingent on JVA functions and function items. JVA functions represent specific JVA
processes that produce postings, such as cash calls and cutback.

Function items are dependent on functions, and each function item represents a specific type of posting that
may result from execution of the process controlled by the function.

We use the sap standard functions seen earlier in the posting rules

Click on
Update the following:-

In the column DB update the FI document types configured earlier.

In the column DT update the Document type A0 which is for the special ledgers

Click on
Select

Double click

Click on

Update the following:-

Click on
Click

Click on

Update the following:-

Click on
Select
Double click

Click on

Update the following:-

Click on

Click on
Update the following:-

Click on

Select
Double click

Click on
Update the following:-
Double click

Click on

Update the following:-

Double click

Click on

Update the following:-

Click on
Update the following:-

Click on

Select
Double click

Click on
Update the following:-

Click on

Click on
Update the following:-

Click on

Select
Double click posting rule details

Click on
Update the following:-

Click on

Similarly update
Click on
34 RI Manipulation Rules

SAP Customizing Implementation Guide  Joint Venture Accounting  Processing  CO Processing 

RI Manipulation Rules

The first step in defining allocations for your company in JVA is to define the rules that will control how recovery
indicators will be assigned to the records of sending and receiving cost objects during allocations.

After you define the recovery indicator manipulation rules for allocations, you can assign these rules to the
various allocations (assessments, distributions, and settlements) as you set them up. The rule you assign to a
particular allocation will control determination of the recovery indicators for the postings that result from
execution of the allocation.

Click on
Update the following:-
Click on

Select

Double click

Click on
Update the following:-

Click on

Click back and select

Double click

Click on
Update the following:-

Click on
35 Maintain Statistical Key figures

Transaction code: KK01

Click on

36 Distribution

SAP Customizing Implementation Guide  Joint Venture Accounting  Processing  CO Processing 

Distribution

Distributions consist of direct transfers of costs from the cost centers and cost elements to which they were
originally booked to receiving cost objects (orders, cost centers, WBS elements, cost objects).

The relationships between sending cost centers and cost elements on the one hand and receiving cost objects
on the other are defined in cycles and their dependent segments. This step of JVA configuration involves
defining the cycles and segments that will be used to transfer costs from senders to receivers when the
distributions transaction is executed in JVA processing.

Cycles essentially consist of groups of segments. Segments consist of groups of sending cost centers and
receiving cost objects and the rules that govern the transfer of costs. A new segment should be defined when
the transfer rules change.

Before creating distribution cycles in JVA, you should configure the controlling area for your company. You
should also create the cost objects (including assigning JVA information to them) that will be involved in
distributions.

You must define the manipulation rule that will be used to determine the recovery indicators to be assigned to
the postings to the sending and receiving cost objects produced by the distribution.

.
Double click
Click
Click on
37 Cutback Control

SAP Customizing Implementation Guide  Joint Venture Accounting  Processing  Cutback Control
 Accounts

The JVA period-end process Cutback calculates partner shares of the gross expenses booked to ventures
during the period and posts documents with these shares of venture expenses to the partners' accounts
receivable accounts.

Balancing offset entries are also posted as part of Cutback processing. On default, these offset postings are
assigned to the same accounts and cost objects (cost centers, WBS elements, networks, and internal orders)
to which the original expenditures were booked. Alternatively, in this step of JVA configuration, you can define
different accounts and cost objects to which the offset postings produced by Cutback will be posted.

No configuration done here since we want the same GL accounts for cutback posting, we do not want
different GL accounts to be updated for cutback postings
38 JV Non-Operated Billing Form

SAP Customizing Implementation Guide  Joint Venture Accounting  Non-operated Manual Input
Form JV Non-Operated Billing Form

The first step in defining an input form template is to name the billing form template. You may specify multiple
billing form templates and link them to different ventures.

When you have fully defined the non-operated billing form, you must assign it to the non-operated ventures for
which it will be used on the Joint Venture Master.
Click on

Update the following:-

Click on
39 JV Non-Operated Billing Form Line Item Details

SAP Customizing Implementation Guide  Joint Venture Accounting  Billing Operated Layout
Sets  Billing Formats

When you have defined the name for a manual non-operated billing form, you can define line items for the
form.

When we have fully defined the non-operated billing form, we must assign it to the non-operated ventures for
which it will be used on the Joint Venture Master: Basic screen.
Update the Non-Op Billing form created in earlier step.

Click on
Update the following:-

Cost center 200000 should be created first.

Click on

Click twice

Click on
Update the following:-

Click on

Click

Click on
Update the following:-

Click on
40 Classify document types for Document Splitting

SAP Customizing Implementation Guide  Financial Accounting (New)  General Ledger Accounting
(New)  Business Transactions  Document Splitting  Classify Document Types for Document
Splitting

This step is required if Document splitting is active in New GL. Conversely, if document splitting is not
active, then this configuration step is not required.

Assign document types configured earlier to transaction variant

DC (Cutback JV)

DK (Cash Call Op JV)

DN(Partner netting JV)

Similarly update
41 Creating Number range for Document type A0

Transaction code: SNUM

Click
Click
Click

Click
Click