jva workshop - unit 1
DESCRIPTION
JVA OverviewTRANSCRIPT
PowerPoint PresentationDay 2
Day 3
Day 4 (half day)
Day 4 (sec half)
Configuration Customizing #2
SAP AG 2002
JVA Workshop Goal
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
This workshop will enable you to:
SAP AG 2002
JVA Unit 1
SAP AG 2002
EXPLORE
DEVELOP
PRODUCE
REFINE
MARKET
SELL
Upstream or Exploration and Production
The exploration, development and production of oil and gas and related products
2) Downstream
Transport, Refining, Marketing and Distribution of the crude oil and gas products
The two sector contain very different business processes and environments and have very little in common.
This course is refers only to Sector 1 Upstream or Exploration and Production
SAP AG 2002
The Upstream Oil and Gas Industry
Is characterised by:
Joint Ventures
Companies enter joint ventures for several reasons, such as the following:
To share risks
To share personnel or other resources
SAP AG 2002
Non Operator
Partner A
Non Operator
Partner B
Share income or product
Joint Ventures
A Joint Venture is a contractual agreement between several parties normally referred to as Joint Venture Partners, under which they share the investment, risk and income associated with a given business activity according to predetermined percentage interests.
It is normal practice to appoint one Partner as the Operator for a specific Joint Venture ie the Company who will manage the work and pay suppliers from the joint funds. The other Partners become primarily financial investors and are referred to as Non Operator Partners.
.
SAP originally designed Joint Venture Accounting (JVA) for the upstream oil industry, and all further examples refer to upstream oil companies. Such companies regularly enter into joint ventures for exploration purposes, to develop oil & gas producing facilities, and to maintain such facilities.
SAP AG 2002
Maintain accounting records for their own share of the venture
Settle accounts with the operating partner, according to the conditions of the venture
Operating Partner
Maintain venture accounting records
Report venture activity to partners
In a typical oil industry joint venture, one partner becomes the operator with the following responsibilities:
Manage the venture on a day-to-day basis
Maintain the venture accounting records
Calculate partner shares of venture expenditure and revenue
Report venture activity to partners
The non-operating partners have the following responsibilities:
Maintain accounting records for their own share of the venture
Settle accounts with the operating partner, according to the conditions of the venture
SAP AG 2002
SAP AG 2002
Settle partner account
Accounting principles are often illustrated using 'T' accounts.
As with other forms of bookkeeping, JVA uses a double entry system. Each accounting transaction requires at least two entries, one debit and one credit. You usually make the entries to different accounts. For example, if you purchase an asset using a cheque, this transaction is recorded as a debit to an asset account (increase) and a credit to a bank account (decrease).
These transactions are displayed in 'T' accounts. Debits are shown on the left side of the 'T' and credits on the right.
One important feature of double entry bookkeeping is that the sum of all entries always equals zero.
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Operator Oriented Accounting
Company A calculates company B’s share of costs (40%).
Company B accounts for its own share of costs.
Company B reimburses company A.
Partner B
3
40
In this example, Company A operates a joint venture and holds a 60% share. Company B is the only other venture partner. The accounting steps are shown below.
The operator, Company A, incurs costs of 100 on behalf of the venture. These are paid directly from the venture bank to simplify the example. Not all ventures have their own bank accounts. Typically, only very large ventures use this operating method. Although, in recent years even large ventures tend to be funded from shared bank accounts.
Company A calculates 40% of the costs and charges these to the partner (Company B) account.
Company A notifies Company B of the costs incurred, and Company B records its own share (40%) of these costs in its books.
Company B reimburses company A. Funds are transferred from the Company B bank to the venture bank and the partner accounts are cleared.
Company A combines accounting records for the activities within the venture with those for its own activity. This ensures simple accounting entries, but great care is needed when reporting, since venture activities and a company’s own activities are represented by sub-balances in accounts. Particular care is needed when reimbursing the venture for the operator share of costs.
In the oil industry, this accounting method is used mainly by US and Canadian companies, who traditionally operate large numbers of small joint ventures.
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Partner Oriented Accounting
Company A incurs costs while running the venture.
Company A calculates the share of costs for Partner A and Partner B.
Company A accounts for its own share of costs.
Company B accounts for its own share of costs.
Company A reimburses the venture.
Company B reimburses the venture.
Company B
2
40
40
6
Company A operates a joint venture and holds a 60% share. The venture has one other partner, Company B. Company A creates a special operating company in which to record the venture accounts separately from its own accounts. Sometimes a real legal entity is created for a very large venture. In the oil industry, this would be an exception. The accounting steps are shown below.
The venture incurs costs of 100. These are paid directly from the venture bank to simplify the example.
Company A takes 60% of the costs, and 40% of the costs are charged to Company B.
Company A records its own share (60%) of these costs in its own books.
Company A notifies Company B of the costs incurred, and Company B records its own share (40%) of these costs in its books.
Company A reimburses the venture. Funds are transferred from the Company A bank to the venture bank and the partner accounts are cleared.
Company B reimburses the venture. Funds are transferred from the Company B bank to the venture bank and the partner accounts are cleared.
In this method, the operator (Company A) keeps separate accounting records for activities within the venture and for its own activity. This means more accounting entries are required, but reporting for venture activity and a company’s own activity is clear and simple.
SAP AG 2002
Operator / Partner Accounting
Company A incurs costs running the venture.
Company A calculates the share of costs for Partner A and Partner B.
Company A accounts for its own share of costs.
Company B accounts for its own share of costs.
Company A reimburses the venture.
Company B reimburses the venture.
Company B
2
40
40
6
Company A operates a joint venture and holds a 60% share. Company B is the only other venture partner. Company A records the venture accounts separately from its own accounts, but as the same company. The accounting steps are shown below.
The venture incurs costs of 100. These are paid directly from the venture bank to simplify the example.
Company A takes 60% of the costs, and 40% of the costs are charged to company B.
Company A records its own share (60%) of these costs in its own books.
Company A notifies Company B of the costs incurred and Company B records its own share (40%) of these costs in its books.
Company A reimburses the venture. Funds are transferred from the Company A bank to the venture bank and the partner accounts are cleared.
Company B reimburses the venture. Funds are transferred from the Company B bank to the venture bank and the partner accounts are cleared.
With this method, the operator (Company A) keeps separate accounting records for activities within the venture and for its own activity. This means more accounting entries are required, but reporting for venture activity and a company’s own activity is clear and simple.
SAP AG 2002
Billing Basis
Expenditure Based
Invoice Based
Cash Based
Billing Basis refers to the point in the procurement cycle at which joint venture partners are charged for their share of expenditure.
Expenditure Based Partners are charged as soon as expenditure is incurred, such as when venture materials are received at the warehouse.
Invoice Based Partners are charged when the operator receives an invoice for venture services or materials.
Cash Based Partners are charged when the operator pays for services and materials for the venture, when funds actually leave the bank account.
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An invoice is received in Month 2.
An invoice is paid in Month 3.
JV Billing Month 1
JV Billing Month 2
JV Billing Month 3
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An invoice is received in Month 2.
An invoice is paid in Month 3.
JV Billing Month 1
JV Billing Month 2
JV Billing Month 3
0
Total
0
Invoice based billings are calculated using transactions from expenditure accounts and from accruals accounts, such as the goods received not invoiced (GRNI) account.
The balance in the accruals accounts offsets the value of expenditure, resulting in a zero billing until the accrual is reversed by an incoming invoice.
SAP AG 2002
JV Billing Month 1
JV Billing Month 2
JV Billing Month 3
Invoice based billings are calculated using transactions from expenditure accounts, from accruals accounts, and from payable accounts.
The balance in the accruals and the payables accounts offsets the value of expenditure, resulting in a zero billing until the accrual balance is reversed by an incoming invoice and the payable balance is reversed by an outgoing payment.
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SAP AG 2002
Describes rules for sharing profit and loss
Specifies penalties
Assigns partner shares and validity
Specifies reporting requirements
Defines taxation rules
Defines accounting procedure
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Single operating partner and share
One or more non-operating partners and shares
Equity Group
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
Partner
Link customer and vendor using Account control fields
JV Partner
SAP Company GBU1
Sometimes a partner in an equity group is associated with the operator and set up as an SAP company code. In this case, the partner is called an inter-company partner and the company code reference is entered in the joint venture partner master.
You should create a customer account and a vendor account (which is optional) for each inter-company partner in the usual way.
When an inter-company partner is added to a venture, the JVA system prompts you to enter the number of the venture and equity group (in the partner company) in the venture master.
Joint venture processes, such as cash-calling and cutback, use the inter-company information to post non-operated partner share documents to the partner company.
This functionality is also used for the ‘Partner Oriented’ Cutback model but using the same Company Code
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Master Data Structure
Represents time-independent aspect of venture and equity group
Provides link between venture activity and equity group
Activity may be actual or logical
Equity Type
Equity Type 1
Equity Type 2
Equity Type 3
Partner 1
Display joint venture partners
Company Code
JOA Class
01 Operated
02 Non-Operated
CP Corporate
JOA Class
JOAs are grouped in classes which can be defined by the user. For example:
01 Operated JOA
02 Non-operated JOA
CP Corporate JOA
Each JOA class has a number range which can require an internal or external number.
The JOA class must exist before a JOA can be created within the class. This is a customizing function.
The JOA class cannot be changed after the JOA has been created.
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Maintain a JOA
The applicable venture type is determined automatically.
You cannot change the equity group if JVA documents exist.
Each equity group may be used in the following types of ventures, depending on the operated and non-operated share:
Operated
Non-operated
Corporate
Double click (F2) on equity group to enter partner shares.
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Joint Venture Class
Company Code
Joint Venture
JV Class
01 Operated
02 Non-Operated
CP Corporate
JV Class
Like JOAs, joint ventures are grouped in classes that can be defined by the user. For example:
01 Operated ventures
02 Non-operated ventures
CP Corporate ventures
Each Venture class has a number range which can require an internal or external number.
The venture class must exist before a venture can be created within the class. This is a customizing function.
The venture class cannot be changed after the venture has been created.
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The following venture types are used by the JVA application:
Operated not taxed This venture is operated by the company using JVA. You cannot add a tax to this type of venture.
Operated taxed This venture is operated by the company running JVA. You can assign a tax code to this type of venture. The JVA process cutback calculates tax to be charged to the venture partners.
Non-operated, on-billed In a non-operated on-billed venture, the company running JVA sells part of its non-operated share of the venture to third parties. The company running JVA distributes portions of the billings it receives from the venture operator to the partners in its non-operating share. In effect, the company running JVA acts as an operator toward these other partners.
Non-operated In a non-operated venture, the company running JVA holds a non-operated share in the venture, and is billed by the operator for its share of venture expenses.
Corporate In a corporate venture, the company running JVA holds 100% of the interest. Expenses, booked in the JVA company without JVA information, are assigned to the corporate venture and equity group.
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Maintain Joint Venture
The Posting Method is used to determine the accounting treatment of a venture.
The Funding Group represents a group of ventures that are funded from the same set of bank accounts.
The assignment from equity type to equity group is based on the document date.
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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
Recovery indicators include the following:
Billable (BI)
Corporate (CP)
Non-billable (NB)
Cutback (CB)
CUTBACK
30%
Add a new partner
Integration
This section describes the integration between JVA and other SAP R/3 components.
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Company
Code
Venture
Equity
Group
Account
Cost
Object
Profit
Center
Recovery
Indicator
Coding
Block
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.
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
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JVA captures and posts joint venture financial information online.
The standard Finance (FI/CO) interface collects details of all accounting transactions and uses the information to prepare accounting documents for the various accounting applications including FI, CO, PS, PCA and AM.
The joint venture interface reviews all accounting documents and uses the information to prepare a JVA document. The joint venture accounting document includes information about venture, equity group, and recovery indicator. You use this document to identify financial transactions for a venture and to charge any venture costs to the relevant partners in the venture.
The main activities of the joint venture interface are:
Coding
Joint venture details are derived from CO accounting cost objects
Splitting
Joint venture details are copied to unencrypted lines in the joint venture document
Clearing
Joint venture details are copied from preceding documents during clearing transactions, such as outgoing payment
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Reporting with JVA
JV Processes
The JV Ledgers are SAP delivered Special Ledgers. They are ‘fixed’ ie cannot be changed by the customer in order to protect the integrity of a highly complex set of data and processes.
The JV database collects ALL financial and cost line items from any relevant module
The JV processes use the jv database for the source data but then the FI Module for the posting thus synchronising the JV and FI databases.
It effectively replaces FI as the source of Financial Reporting
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JVA Data Capture
FI Balance Sheet
Partly
Captured
The JV database is the only source for complete financial postings, including Balance Sheet, analysed by Joint Venture structure.
Profit Center accounting fails to analyse all Balance Sheet postings to the same level of detail, in particular in the area of Tax and Bank postings.
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JVA Activation
The JVA module is activated at Company Level in SAP - specify:
Region -
USA
Canada
International
JVA Cutback Model -
Operator as Partner model
JVA is activated at Company Code level and it is at this level that the key decisions are made regarding the process options to be used.Once set, they are effectively not changeable.
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Cost Object
Production Order
Network Order
JIB/JIBE Subclass A
Joint venture coding is derived from Cost Objects in Controlling (CO). Examples include Cost Centers and Orders.
Each Cost Object includes the following joint venture fields in the master data:
Joint Venture
Equity Type
Recovery Indicator
JIB/JIBE Subclass A
The joint venture fields on the Cost Object fall into the following three categories:
Accounting These fields are used to determine joint venture coding for finance documents
Control The JV Object Type determines whether or not the JVA fields are mandatory. It also defines the type of expenditure for reporting to partners, such as capital expenditure and operational expenditure.
Reporting The JIB Class and Sub-Class A are fields used to structure the standard Joint Interest Billing (JIB) report.
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Accounting Documents
Vendor Invoice
FI Document
CO Document
JV Document
JV Document
In this example, an invoice is posted and charged to two cost centers:
Cost centre Venture Eq.Type Rec.Ind
JV00-A JV1001 A BI
JV00-B JV1001 B BI
Venture coding is derived for each cost line and then copied pro-rata to the vendor line and the tax line.
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Fixed Asset
JIB/JIBE Subclass A
Accounting transactions involving assets are usually coded to a joint venture, even if it is the corporate venture.
JVA derives venture coding for an asset using the cost centre entered on the asset master record.
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Accounts Payable
30
Invoice
Cutback
70
There are two accounting options for capitalising expenditure in the Upstream Oil and Gas Industry ie
1) Via a WBS or Order – this will normally apply to the Oil and Gas Assets
2) Direct to the Asset Accounts – this would normally be rare and apply only to the items such as Cars, Office Equipment etc. Often these are treated as under option 1 above.
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JV Document
Vendor Invoice
Asset Document
JV Document
Asset Master
In this example, an invoice is posted for the direct acquisition of a joint venture asset.
The asset is assigned to the cost centre JV00-B in the time-dependent parameters, and this cost centre is assigned to venture JV1001, so the asset transaction is coded against venture JV1001.
The venture coding is copied from the asset entry to the vendor entry.
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Plant
Material movements are usually coded with a venture.
JVA derives venture coding for material movements from a special stock cost object that is assigned to a plant and a valuation type (which is optional) associated with the plant.
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Goods Receipt
Material Document
Accounting Doc
JV Document
MM Assignments
JV Document
In this example, a goods receipt document is posted to receive stock worth GBP 500 into plant JA01.
Plant JA01 is assigned to cost centre JV00-S01.
Cost centre JV00-S01 has the following joint venture coding:
Venture JV1001
Equity Type C
Recovery Ind. BI
The resulting joint venture document is coded with cost centre JV00-S01 and all the joint venture coding on that cost centre.
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Project
Equipment
Plant maintenance (PM) orders carry venture coding in the master data for other types of orders such as internal orders and network orders.
You can enter joint venture codes directly, or these codes can be derived from the cost object on the functional location or equipment master, for which the order is raised.
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Create a joint venture project
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Unit 1 Summary
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
You are now able to:
Day 3
Day 4 (half day)
Day 4 (sec half)
Configuration Customizing #2
SAP AG 2002
JVA Workshop Goal
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
This workshop will enable you to:
SAP AG 2002
JVA Unit 1
SAP AG 2002
EXPLORE
DEVELOP
PRODUCE
REFINE
MARKET
SELL
Upstream or Exploration and Production
The exploration, development and production of oil and gas and related products
2) Downstream
Transport, Refining, Marketing and Distribution of the crude oil and gas products
The two sector contain very different business processes and environments and have very little in common.
This course is refers only to Sector 1 Upstream or Exploration and Production
SAP AG 2002
The Upstream Oil and Gas Industry
Is characterised by:
Joint Ventures
Companies enter joint ventures for several reasons, such as the following:
To share risks
To share personnel or other resources
SAP AG 2002
Non Operator
Partner A
Non Operator
Partner B
Share income or product
Joint Ventures
A Joint Venture is a contractual agreement between several parties normally referred to as Joint Venture Partners, under which they share the investment, risk and income associated with a given business activity according to predetermined percentage interests.
It is normal practice to appoint one Partner as the Operator for a specific Joint Venture ie the Company who will manage the work and pay suppliers from the joint funds. The other Partners become primarily financial investors and are referred to as Non Operator Partners.
.
SAP originally designed Joint Venture Accounting (JVA) for the upstream oil industry, and all further examples refer to upstream oil companies. Such companies regularly enter into joint ventures for exploration purposes, to develop oil & gas producing facilities, and to maintain such facilities.
SAP AG 2002
Maintain accounting records for their own share of the venture
Settle accounts with the operating partner, according to the conditions of the venture
Operating Partner
Maintain venture accounting records
Report venture activity to partners
In a typical oil industry joint venture, one partner becomes the operator with the following responsibilities:
Manage the venture on a day-to-day basis
Maintain the venture accounting records
Calculate partner shares of venture expenditure and revenue
Report venture activity to partners
The non-operating partners have the following responsibilities:
Maintain accounting records for their own share of the venture
Settle accounts with the operating partner, according to the conditions of the venture
SAP AG 2002
SAP AG 2002
Settle partner account
Accounting principles are often illustrated using 'T' accounts.
As with other forms of bookkeeping, JVA uses a double entry system. Each accounting transaction requires at least two entries, one debit and one credit. You usually make the entries to different accounts. For example, if you purchase an asset using a cheque, this transaction is recorded as a debit to an asset account (increase) and a credit to a bank account (decrease).
These transactions are displayed in 'T' accounts. Debits are shown on the left side of the 'T' and credits on the right.
One important feature of double entry bookkeeping is that the sum of all entries always equals zero.
SAP AG 2002
Operator Oriented Accounting
Company A calculates company B’s share of costs (40%).
Company B accounts for its own share of costs.
Company B reimburses company A.
Partner B
3
40
In this example, Company A operates a joint venture and holds a 60% share. Company B is the only other venture partner. The accounting steps are shown below.
The operator, Company A, incurs costs of 100 on behalf of the venture. These are paid directly from the venture bank to simplify the example. Not all ventures have their own bank accounts. Typically, only very large ventures use this operating method. Although, in recent years even large ventures tend to be funded from shared bank accounts.
Company A calculates 40% of the costs and charges these to the partner (Company B) account.
Company A notifies Company B of the costs incurred, and Company B records its own share (40%) of these costs in its books.
Company B reimburses company A. Funds are transferred from the Company B bank to the venture bank and the partner accounts are cleared.
Company A combines accounting records for the activities within the venture with those for its own activity. This ensures simple accounting entries, but great care is needed when reporting, since venture activities and a company’s own activities are represented by sub-balances in accounts. Particular care is needed when reimbursing the venture for the operator share of costs.
In the oil industry, this accounting method is used mainly by US and Canadian companies, who traditionally operate large numbers of small joint ventures.
SAP AG 2002
Partner Oriented Accounting
Company A incurs costs while running the venture.
Company A calculates the share of costs for Partner A and Partner B.
Company A accounts for its own share of costs.
Company B accounts for its own share of costs.
Company A reimburses the venture.
Company B reimburses the venture.
Company B
2
40
40
6
Company A operates a joint venture and holds a 60% share. The venture has one other partner, Company B. Company A creates a special operating company in which to record the venture accounts separately from its own accounts. Sometimes a real legal entity is created for a very large venture. In the oil industry, this would be an exception. The accounting steps are shown below.
The venture incurs costs of 100. These are paid directly from the venture bank to simplify the example.
Company A takes 60% of the costs, and 40% of the costs are charged to Company B.
Company A records its own share (60%) of these costs in its own books.
Company A notifies Company B of the costs incurred, and Company B records its own share (40%) of these costs in its books.
Company A reimburses the venture. Funds are transferred from the Company A bank to the venture bank and the partner accounts are cleared.
Company B reimburses the venture. Funds are transferred from the Company B bank to the venture bank and the partner accounts are cleared.
In this method, the operator (Company A) keeps separate accounting records for activities within the venture and for its own activity. This means more accounting entries are required, but reporting for venture activity and a company’s own activity is clear and simple.
SAP AG 2002
Operator / Partner Accounting
Company A incurs costs running the venture.
Company A calculates the share of costs for Partner A and Partner B.
Company A accounts for its own share of costs.
Company B accounts for its own share of costs.
Company A reimburses the venture.
Company B reimburses the venture.
Company B
2
40
40
6
Company A operates a joint venture and holds a 60% share. Company B is the only other venture partner. Company A records the venture accounts separately from its own accounts, but as the same company. The accounting steps are shown below.
The venture incurs costs of 100. These are paid directly from the venture bank to simplify the example.
Company A takes 60% of the costs, and 40% of the costs are charged to company B.
Company A records its own share (60%) of these costs in its own books.
Company A notifies Company B of the costs incurred and Company B records its own share (40%) of these costs in its books.
Company A reimburses the venture. Funds are transferred from the Company A bank to the venture bank and the partner accounts are cleared.
Company B reimburses the venture. Funds are transferred from the Company B bank to the venture bank and the partner accounts are cleared.
With this method, the operator (Company A) keeps separate accounting records for activities within the venture and for its own activity. This means more accounting entries are required, but reporting for venture activity and a company’s own activity is clear and simple.
SAP AG 2002
Billing Basis
Expenditure Based
Invoice Based
Cash Based
Billing Basis refers to the point in the procurement cycle at which joint venture partners are charged for their share of expenditure.
Expenditure Based Partners are charged as soon as expenditure is incurred, such as when venture materials are received at the warehouse.
Invoice Based Partners are charged when the operator receives an invoice for venture services or materials.
Cash Based Partners are charged when the operator pays for services and materials for the venture, when funds actually leave the bank account.
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An invoice is received in Month 2.
An invoice is paid in Month 3.
JV Billing Month 1
JV Billing Month 2
JV Billing Month 3
SAP AG 2002
An invoice is received in Month 2.
An invoice is paid in Month 3.
JV Billing Month 1
JV Billing Month 2
JV Billing Month 3
0
Total
0
Invoice based billings are calculated using transactions from expenditure accounts and from accruals accounts, such as the goods received not invoiced (GRNI) account.
The balance in the accruals accounts offsets the value of expenditure, resulting in a zero billing until the accrual is reversed by an incoming invoice.
SAP AG 2002
JV Billing Month 1
JV Billing Month 2
JV Billing Month 3
Invoice based billings are calculated using transactions from expenditure accounts, from accruals accounts, and from payable accounts.
The balance in the accruals and the payables accounts offsets the value of expenditure, resulting in a zero billing until the accrual balance is reversed by an incoming invoice and the payable balance is reversed by an outgoing payment.
SAP AG 2002
SAP AG 2002
Describes rules for sharing profit and loss
Specifies penalties
Assigns partner shares and validity
Specifies reporting requirements
Defines taxation rules
Defines accounting procedure
SAP AG 2002
Single operating partner and share
One or more non-operating partners and shares
Equity Group
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
Partner
Link customer and vendor using Account control fields
JV Partner
SAP Company GBU1
Sometimes a partner in an equity group is associated with the operator and set up as an SAP company code. In this case, the partner is called an inter-company partner and the company code reference is entered in the joint venture partner master.
You should create a customer account and a vendor account (which is optional) for each inter-company partner in the usual way.
When an inter-company partner is added to a venture, the JVA system prompts you to enter the number of the venture and equity group (in the partner company) in the venture master.
Joint venture processes, such as cash-calling and cutback, use the inter-company information to post non-operated partner share documents to the partner company.
This functionality is also used for the ‘Partner Oriented’ Cutback model but using the same Company Code
SAP AG 2002
Master Data Structure
Represents time-independent aspect of venture and equity group
Provides link between venture activity and equity group
Activity may be actual or logical
Equity Type
Equity Type 1
Equity Type 2
Equity Type 3
Partner 1
Display joint venture partners
Company Code
JOA Class
01 Operated
02 Non-Operated
CP Corporate
JOA Class
JOAs are grouped in classes which can be defined by the user. For example:
01 Operated JOA
02 Non-operated JOA
CP Corporate JOA
Each JOA class has a number range which can require an internal or external number.
The JOA class must exist before a JOA can be created within the class. This is a customizing function.
The JOA class cannot be changed after the JOA has been created.
SAP AG 2002
Maintain a JOA
The applicable venture type is determined automatically.
You cannot change the equity group if JVA documents exist.
Each equity group may be used in the following types of ventures, depending on the operated and non-operated share:
Operated
Non-operated
Corporate
Double click (F2) on equity group to enter partner shares.
SAP AG 2002
Joint Venture Class
Company Code
Joint Venture
JV Class
01 Operated
02 Non-Operated
CP Corporate
JV Class
Like JOAs, joint ventures are grouped in classes that can be defined by the user. For example:
01 Operated ventures
02 Non-operated ventures
CP Corporate ventures
Each Venture class has a number range which can require an internal or external number.
The venture class must exist before a venture can be created within the class. This is a customizing function.
The venture class cannot be changed after the venture has been created.
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The following venture types are used by the JVA application:
Operated not taxed This venture is operated by the company using JVA. You cannot add a tax to this type of venture.
Operated taxed This venture is operated by the company running JVA. You can assign a tax code to this type of venture. The JVA process cutback calculates tax to be charged to the venture partners.
Non-operated, on-billed In a non-operated on-billed venture, the company running JVA sells part of its non-operated share of the venture to third parties. The company running JVA distributes portions of the billings it receives from the venture operator to the partners in its non-operating share. In effect, the company running JVA acts as an operator toward these other partners.
Non-operated In a non-operated venture, the company running JVA holds a non-operated share in the venture, and is billed by the operator for its share of venture expenses.
Corporate In a corporate venture, the company running JVA holds 100% of the interest. Expenses, booked in the JVA company without JVA information, are assigned to the corporate venture and equity group.
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Maintain Joint Venture
The Posting Method is used to determine the accounting treatment of a venture.
The Funding Group represents a group of ventures that are funded from the same set of bank accounts.
The assignment from equity type to equity group is based on the document date.
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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
Recovery indicators include the following:
Billable (BI)
Corporate (CP)
Non-billable (NB)
Cutback (CB)
CUTBACK
30%
Add a new partner
Integration
This section describes the integration between JVA and other SAP R/3 components.
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Company
Code
Venture
Equity
Group
Account
Cost
Object
Profit
Center
Recovery
Indicator
Coding
Block
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.
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
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JVA captures and posts joint venture financial information online.
The standard Finance (FI/CO) interface collects details of all accounting transactions and uses the information to prepare accounting documents for the various accounting applications including FI, CO, PS, PCA and AM.
The joint venture interface reviews all accounting documents and uses the information to prepare a JVA document. The joint venture accounting document includes information about venture, equity group, and recovery indicator. You use this document to identify financial transactions for a venture and to charge any venture costs to the relevant partners in the venture.
The main activities of the joint venture interface are:
Coding
Joint venture details are derived from CO accounting cost objects
Splitting
Joint venture details are copied to unencrypted lines in the joint venture document
Clearing
Joint venture details are copied from preceding documents during clearing transactions, such as outgoing payment
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Reporting with JVA
JV Processes
The JV Ledgers are SAP delivered Special Ledgers. They are ‘fixed’ ie cannot be changed by the customer in order to protect the integrity of a highly complex set of data and processes.
The JV database collects ALL financial and cost line items from any relevant module
The JV processes use the jv database for the source data but then the FI Module for the posting thus synchronising the JV and FI databases.
It effectively replaces FI as the source of Financial Reporting
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JVA Data Capture
FI Balance Sheet
Partly
Captured
The JV database is the only source for complete financial postings, including Balance Sheet, analysed by Joint Venture structure.
Profit Center accounting fails to analyse all Balance Sheet postings to the same level of detail, in particular in the area of Tax and Bank postings.
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JVA Activation
The JVA module is activated at Company Level in SAP - specify:
Region -
USA
Canada
International
JVA Cutback Model -
Operator as Partner model
JVA is activated at Company Code level and it is at this level that the key decisions are made regarding the process options to be used.Once set, they are effectively not changeable.
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Cost Object
Production Order
Network Order
JIB/JIBE Subclass A
Joint venture coding is derived from Cost Objects in Controlling (CO). Examples include Cost Centers and Orders.
Each Cost Object includes the following joint venture fields in the master data:
Joint Venture
Equity Type
Recovery Indicator
JIB/JIBE Subclass A
The joint venture fields on the Cost Object fall into the following three categories:
Accounting These fields are used to determine joint venture coding for finance documents
Control The JV Object Type determines whether or not the JVA fields are mandatory. It also defines the type of expenditure for reporting to partners, such as capital expenditure and operational expenditure.
Reporting The JIB Class and Sub-Class A are fields used to structure the standard Joint Interest Billing (JIB) report.
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Accounting Documents
Vendor Invoice
FI Document
CO Document
JV Document
JV Document
In this example, an invoice is posted and charged to two cost centers:
Cost centre Venture Eq.Type Rec.Ind
JV00-A JV1001 A BI
JV00-B JV1001 B BI
Venture coding is derived for each cost line and then copied pro-rata to the vendor line and the tax line.
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Fixed Asset
JIB/JIBE Subclass A
Accounting transactions involving assets are usually coded to a joint venture, even if it is the corporate venture.
JVA derives venture coding for an asset using the cost centre entered on the asset master record.
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Accounts Payable
30
Invoice
Cutback
70
There are two accounting options for capitalising expenditure in the Upstream Oil and Gas Industry ie
1) Via a WBS or Order – this will normally apply to the Oil and Gas Assets
2) Direct to the Asset Accounts – this would normally be rare and apply only to the items such as Cars, Office Equipment etc. Often these are treated as under option 1 above.
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JV Document
Vendor Invoice
Asset Document
JV Document
Asset Master
In this example, an invoice is posted for the direct acquisition of a joint venture asset.
The asset is assigned to the cost centre JV00-B in the time-dependent parameters, and this cost centre is assigned to venture JV1001, so the asset transaction is coded against venture JV1001.
The venture coding is copied from the asset entry to the vendor entry.
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Plant
Material movements are usually coded with a venture.
JVA derives venture coding for material movements from a special stock cost object that is assigned to a plant and a valuation type (which is optional) associated with the plant.
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Goods Receipt
Material Document
Accounting Doc
JV Document
MM Assignments
JV Document
In this example, a goods receipt document is posted to receive stock worth GBP 500 into plant JA01.
Plant JA01 is assigned to cost centre JV00-S01.
Cost centre JV00-S01 has the following joint venture coding:
Venture JV1001
Equity Type C
Recovery Ind. BI
The resulting joint venture document is coded with cost centre JV00-S01 and all the joint venture coding on that cost centre.
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Project
Equipment
Plant maintenance (PM) orders carry venture coding in the master data for other types of orders such as internal orders and network orders.
You can enter joint venture codes directly, or these codes can be derived from the cost object on the functional location or equipment master, for which the order is raised.
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Create a joint venture project
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Unit 1 Summary
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
You are now able to: