SAP Joint Venture Accounting - JVA

1- to configure the JVA functionality:

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-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

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 partner by venture or equity group for various currencies

Venture / Gross by venture for all partners in an equity group

Project / Net by project for a single partner by project for various currencies

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 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
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).
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.
JV Billing

Cutback

Overhead Cost Calculation

WBS and Project System

Partner Netting

Equity Adjustment

Asset and Material Transfers

Controlling

Net Profit and Carried Interest Profit

Partners

Non-Operated Functions

Inter-Company Transactions

Balanced Books by Venture

Bank Account Switching

Audit Reports and JADE

2- to develop the interfaces and communication

3- to set the ledgers

4- to customize the report details

5- to report by block and in different levels

6- to process royalties, taxes, and equities

Due to the complexity of the JVA setup, SafSoft will

assist your company on using the standard JVA or a customized JVA solution

SafSoft Consulting

http://safsoft.com/en Powered by Joomla! Generated: 23 July, 2013, 13:04 according to your company
business needs.

SafSoft can integrate your company JVA module with other

SAP modules including Assets, Controlling, Materials, Services, Contracts,

Customer and Vendor Master data, Logistics, and Production Revenue

Accounting.

We can assist

you, do an assessment of your implemented JVA solution to fine tuning it to

meet your business needs and to produce the required reports in short lead

time.

SAP designed SAP JVA for joint venture partnerships. SAP JVA is
a component of the mySAP Oil & Gas industry solution. SAP
JVA uses functions from the components Financial Accounting
(SAP FI), Controlling (SAP CO), Asset Management (SAP AM),
Materials Management (SAP MM), Plant Maintenance (SAP PM),
and Project System (SAP PS). SAP JVA includes the following
features and benefits:
u2022 Joint Venture Data Capture captures and codes all transactions,
including vendor invoices, inventory movements and
allocations, with an option to produce balanced venture
books.
u2022 Cash Calls request cash payments from partners for future
venture operations.
u2022 Partner Billing calculates partner shares for venture expenses
and revenue, monitors partner cash calls and receivables,
and produces a partner bill containing all relevant information.
u2022 Overhead calculates different types of overhead as agreed in
the Joint Operating Agreement (JOA).
u2022 Allocations distribute billable and non-billable costs (such as
facility, payroll, and related expenses) to cost centers or projects
throughout the allocation cycle.
u2022 Multi-Currency Processing supports the multi-currency
requirements of typical venture activities.

Read the document "joint venture accounting with mySapOil and gas "
I think it will help you in deciding ... besides that why dont you refer the Release notes .. these will surely guide you ...

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

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