What is JVA?

A Joint Venture is a aggrement between two parties to work an project

together where one person is operator other person gets billed.

We have to drill the oil under the sea, it is very tough task, hence they
team up like BP,SHELL & Exxon
I am going to be a operator and partners. I will sent bill every month to you.

Chesapeake says partnership with guys, I will send you inovices everymonth
Joint Operating Agreement - Highest Level
Venture starts A 1/1/2016
Chesapeak share is 70% BP share is 30%

Venture starts 06/01/2016

Chesapeak share is 70%
BP - 20%
Phillips is 10%
What date and whom to bill ?
We generate the invoice expenses send to Partners -
they will verify the bill and pays it

Joint Operating Agreement - Highest Level ( Partners are nothing Equity Group
Joint Venture
Cost Object is assigned to Joint Venture - JV is linked equity group
Master Data
There is program is called Cutback it takes the all information bills the BP 30%
70% to Chesapeake

From the Data 06/01/2016 2nd invoice goes to Equity type 2

Chesapeake - 70%
BP - 20%
Philips - 10%

Create an operator
Set up Vendor
Set up Customer - Chesapeake Operator
Business function

Recovery Indictors
Billing Indicators Corporate data Billing Basis
JVA - Globle Data - Table - T8JZA Billing Basis - Expenses based
Dr Expenses 100
Cr GR/IR 100
70/30 Share

Invoice Based Billing (2)

Dr GR/IR 100
Cr Vendor 100
70/30 Share

Cash Based
Dr Vendor 100
Cr Vendor 100
70/30 Share
Billing Basis Billing Basis
Billing Basis - Expenses based (1)
Dr Expenses 100 The Billing basis determines the point within the procurement cycle at which expenditu
Cr GR/IR 100
70/30 Share 1) Expenditure based: where expenditure can be billed as soon as goods
    or services are received.
Invoice Based Billing (2)
Dr GR/IR 100 Cutback 30% 2) Invoice based: where expenditure can be billed once the operator
Cr Vendor 100     has received a vendor invoice for goods or services.
70/30 Share
3) Cash Based: where expenditure on goods and services can only be
Cash Based     billed once payment has been made.
Dr Vendor 100
Cr Vendor 100
70/30 Share
 m

e procurement cycle at which expenditure incurred against Joint Venture objects can be 'Cutback' and billed by the JOA operator to the other partners. The

e billed as soon as goods

ed once the operator

nd services can only be

perator to the other partners. The alternatives are:
There are corperate expenses and non corporate expenses
Recovery Indicates states that which of the expenses billed to the partners
Which are not billed to partners

Recovery Indicator are assigned to a cost object ( cost center, internal order
WBS element or GL Account or manual enter it. )
BI - Billable