Joint Venture Accounting (JVA)

Joint Venture
Accounting (JVA)

 SAP AG 2002
JVA Workshop

Day 1 Basics
1. Introduction
2. Accounting Principles
3. Master Data
4. Integration
Day 2 Day-to-Day Processes
1. Data Entry
2. Payments
3. Operated Accounting
4. Non-Operated Accounting
Day 3 Periodic Processes
1. Cutback
2. Foreign Currency Valuation
3. Month End Processing

Day 4 (half day) Reporting

1. Billing
2. Reporting
3. Planning
4. Year End

Day 4 (sec half) Configuration

1. Customizing #1
Day 5 (first half) Configuration
1. Customizing #2

 SAP AG 2002
Equity Group

Equity Group

Definition of partner shares and roles

• Single operating partner and share

• One or more non-operating partners and shares

 SAP AG 2002
Joint Venture Partner

Partner

Definition of entity participating in a joint venture

• Can participate in one or more ventures

simultaneously
• Linked to customer accounts receivable (A/R)
sub-account for non-operating roles
• Linked to vendor accounts payable (A/P) sub-
account for operating roles

 SAP AG 2002
Joint Venture Partner: A/R and A/P
Customer
JV Partner

Vendor

• Customer record required for all partners

• Vendor record required for all partners
• Link customer and vendor using Account
control fields

 SAP AG 2002
Inter-Company Partners

SAP Company GBU1

Partner Inter-Co Code Partner Name
JV5001 Caledonian Oil
JV5101 Troll Oil
JVGBU2 GBU2 SAP Company GBU2

Customers
JV5001

JV5101
SAP Company GBU2
JVGBU2
Partner Inter-Co Code Partner Name
JVGBU1 GBU1 SAP Company GBU1

Customers Vendors

JVGBU1 JVGBU1

 SAP AG 2002
Master Data Structure

JOA

Venture 1 Venture 2 Venture 3

Equity Group A Equity Group A Equity Group E

Equity Group B Equity Group C

Equity Group D
Operator
Operator
Partner 1
Partner 1
Partner 2
Partner 2
Partner 3

 SAP AG 2002
JOA Assignments

JOA

Equity Group A
Venture 1 DATE

Equity Group B

Venture 2 DATE
Equity Group C

Equity Group D
Venture 3 DATE

Equity Group E

 SAP AG 2002
Joint Venture Class

JV Class is used to group joint ventures

Company Code
Joint Venture JV Class

JV Class 01 Operated
02 Non-Operated
CP Corporate

Operated Ventures
Corporate Ventures
JV 1 JV 2 Non-Operated Ventures
JV 3 JV 5 JV 8
JV 4
JV 6 JV 9
JV 7

 SAP AG 2002
Venture Type

• Operated not taxed

• Operated taxed
• Non-operated, on-billed
• Non-operated
• Corporate

 SAP AG 2002
Maintain Joint Venture
The Posting Method is
used to determine the
accounting treatment of a The assignment from
venture. equity type to equity
group is based on the
document date.

The Funding Group represents a

group of ventures that are funded
from the same set of bank
accounts.

 SAP AG 2002
Recovery Indicator

Recover
y
Indicato
r

Identifies category of a joint venture transaction

• Indicates whether a particular revenue or

expense is shared by venture partners
• Used to select data for reporting to venture
partners
• Used to distinguish between joint and own
revenues and expenditures

 SAP AG 2002
Use of Recovery Indicator

1. Basis for sharing Material Consumed

Billable Balances JV Billing
partner costs Expenditure
100 BI - Billable
(cutback)
20 CUTBACK
NB - Non-Billable
30% 33 110
10 AD - Adjustments

33- CB - Cutback
Cutback posting
Gross Exp.

2. Basis for Material Consumed

operational 100 Venture (Gross) 130
BI - Billable
reporting Reporting
(Operator 20 NB - Non-Billable Net Exp.
Oriented)
10 AD - Adjustments
Own (Net)
33- Reporting 97
CB - Cutback

 SAP AG 2002
Exercise 1.2: Create Joint Venture Master Data

1. Add a new partner

2. Create a JOA
3. Create a joint venture

 SAP AG 2002
JVA 1.4

This section describes the integration

between JVA and other SAP R/3
components.

Integration

 SAP AG 2002
What is the JVA Module?

 Set of Special Ledgers comprising Line Item and Balance tables fed
almost entirely from standard SAP modules

 JVA Coding block is based on Joint Venture structures but also contains
the key structures from the standard financial and costing modules.

Coding Company Equity Recovery Cost Profit

Venture Account
Block Code Group Indicator Object Center

 JVA captures ALL financial and cost postings real time from standard
modules such as FI, CO & MM and converts them to JV format

 It provides new processes specific to E & P and also amends standard

ones to be compatible with the JV structures

 It provides a full Trial Balance by Venture and Equity Group

 Effectively a new Finance Reporting Module

 SAP AG 2002
Integration

AM
MM
FI
SD

CO
PM Coding
Accounting
Splitting
Interface
PS Clearing
Accounting
Document

HR

JV Interface JV
Document JV
Database

 SAP AG 2002
Reporting with JVA

MM AM PM PS

Open Item Mgt Cost Allocations

AP, AR etc Management
Bank & Cash FI CO Reporting
Budgets & Plans

Financial ledger FINANCIAL Costing Ledger

DOCUMENT
Account Account + Cost Object
Finance Reports
JV Processes
Cost Reports
JVA JV ledger
Budgets & Plans
Acct + C/O + Venture
Partner Billing PSA
Cash Statements Reporting
JV Billing ledger BILLING Invoices
PSA ledger
PSA
 SAP AG 2002
JVA Data Capture

CO
FI PCA JV
PS

FI Balance Sheet

FI Cost and Income

CO Cost allocations

Captured Not Partly

Captured Captured

 SAP AG 2002
JVA Activation

 The JVA module is activated at Company Level in SAP - specify:

 Region -
 USA
 Canada
 International
 Billing Basis –
 Cash
 Expenditure
 Invoice
 Banking arrangements – Venture Bank Accounts and Switching
 JVA Cutback Model -
 Standard
 Operator as Partner model
 SAP AG 2002
Joint Venture Coding for Cost Object

Cost Object

Project Cost centre Internal Order

Joint Venture
Equity Type
Recovery Indicator
JV Object Type

Plant Production Network JIB/JIBE Class

Maintenance Order Order
Order JIB/JIBE Subclass A

 SAP AG 2002
Joint Venture Coding Fields

Accounting

Joint Venture
Equity Type
Recovery Indicator
Joint Venture
Equity Type
Recovery Indicator Control
JV Object Type JV Object Type
JIB/JIBE Class
JIB/JIBE Subclass A
Reporting

JIB/JIBE Class
JIB/JIBE Subclass A

 SAP AG 2002
Accounting Documents
FI Document

Vendor Invoice

CO Document

JV Document
JV Document

 SAP AG 2002
Joint Venture Coding for Assets

Joint Venture
Fixed Asset Owning Cost Equity Type
centre
Recovery Indicator
JV Object Type
JIB/JIBE Class
JIB/JIBE Subclass A

 SAP AG 2002
Joint Venture Asset Posting

Accounting options for capitalisation:

1) Via a WBS or Order :

Accounts Receivable Accounts Payable WBS Assets

100 Invoice 100

30 Cutback 30
70 Settlement 70

2) Direct to the Asset Accounts :

Accounts Receivable Accounts Payable Assets

100 Invoice 100

30 Cutback 30

70

 SAP AG 2002
Joint Venture Asset Posting

Asset Master

Vendor Invoice

JV Document

JV Document

Asset Document

 SAP AG 2002
Joint Venture Coding for Material

Project

Plant

Joint Venture
Equity Type
Cost centre
Recovery Indicator
JV Object Type
Valuation JIB/JIBE Class
Type
JIB/JIBE Subclass A

Internal Order

 SAP AG 2002
Joint Venture Material Posting

Goods Receipt
MM Assignments

Material Document

Accounting Doc JV Document

JV Document

 SAP AG 2002
Default Joint Venture Coding for PM Orders

Functional Project
Location

Equipment Cost centre

Plant Joint Venture

Maintenance Equity Type
Order
Recovery Indicator
JV Object Type
JIB/JIBE Class
JIB/JIBE Subclass A

 SAP AG 2002
Exercise 1.3: Create Integrated Master Data

1. Create a joint venture cost centre

2. Create a joint venture project

 SAP AG 2002
Unit 1 Summary

You are now able to:

 Understand the concepts and

gain hands-on experience of
mySAP.com Oil & Gas JVA
 Perform JVA related functions,
using Finance, Controlling,
Project System, and Materials
Management
 Use sample companies to
understand and apply JVA
functions

 SAP AG 2002