Introduction
SAP AG 2003
Production Sharing
Agreement
Cost Object
Venture A
Definitions
Venture A
ET1
Cutback
EG2
Company Code
50 %
Partner B
25 %
Partner D
25 %
Net
Operating
Exp / Rev
50
AR / AP
AR / AP
Partner B
25
Partner D
25
Purchase
Request
Purchase
Order
Container
Material
Request
Material
Holding
Supply Chain
Processing
Material
Tracking
Material
Reservation
Material
Receipt
Goods
Receipt
Outbound
Delivery
Outbound
Shipment
Transport
Request
Goods Receipt
Processing
SAP AG 2003
Transport
Order
Returns
Handling
Material
Issue
Upstream
Supply
Manufacturing
Business Support
SAP AG 2003
Business
Intelligence &
Decision Support
Development
Production
Exchange &
Throughput
Handling
Manufacturing Planning
Manufacturing Process
& Optimization
Accounting
Scheduling
Employee
Relationship
Management &
Workforce
Analytics
Marketing
Inventory
Management
Batch Manufacturing
Joint Venture
Management
Disposal
Primary
Distribution &
Transport
Secondary
Distribution &
Transportation
Product Quality
Management
Marketing
Service
Analytics
Convenience Retailing
Fuels Management
Procurement
Development
Identification
Undeveloped Leasehold
Acquisition
Development Drilling
Production
Reservoir Modeling
Depletion Planning
Well Servicing
Surface Facilities Maintenance (S8)
Production Management & Reporting
(S79)
Secondary/Tertiary Recovery
Planning and Management
Remote Logistics (S83)
Production/Revenue Accounting (S79)
Marketing
First Purchaser (S79)
Environmental Compliance
SAP AG 2003
Disposal
Business Analytics
Accounting
Employee Relationship
Management &
Workforce Analytics
Joint Venture
Management
Stakeholder
Relationship
Management (S11)
Customer Relationship
Analytics (S1, S13)
Flexible Reporting
(S13)
Financial Statements
(S12, S11)
Information
Collaboration (S9)
Assessment &
Distributions (S81)
E-Analytics (S13)
Strategy Management
(S11)
Manager Self-Service
(S9)
Overhead Splitting
(S81)
Performance
Measurement (S11)
Financial Analytics
(S12, S13)
Employee Self-Service
(S10)
Suspense Processing
(S81)
Human Resource
Analytics (S10, S13)
Employee Collaboration
(S9)
Equity Change
Processing (S81)
Business Consolidation
(S11)
Product Lifecycle
Analytics (S7, S13)
Strategic Alignment
(S10)
Reporting &
Benchmarking (S10)
Cash Call
Reclassification (S81)
Information
Dissemination &
Sharing (S13, S99)
Performance Monitoring
(S13, S11)
Planning & Simulation
(S11, S13)
Ad hoc Analysis (S13)
Collaborative Decision
Support (S13, S99)
Data Collection &
Integration (S13)
Content Management &
Collaboration (S13,
S99)
SAP AG 2003
SAP AG 2003
SAP AG 2003
EQTYPE 2
EQTYPE 3
Construction
Production
2002
33 1/3 B
C
33 1/333 1/3
33 1/3
EG1
A
50 %
25%
D
2003
50 %
25%
Ventures associate
Equity Types and Equity
Groups to define a specific
joint operation or purpose
D
25 %
25 %
EG4
EG2
A
25 %
A
A
75 %
2004
EG3
SAP AG 2003
C
25%
33 1/3 B
C
33 1/3
33 1/3
EG5
25 %
25%
C
25 %
EG6
Design
Cost centre
EQTYPE 2
EQTYPE 3
Construction
Production
A
33 1/3 B
C
33 1/3
33 1/333 1/3
EG1
Valid
A
50 %
A
33 1/3 B
50 %
25%
3
D
B
25%
25 %
25 %
EG2
EG4
A
25 %
A
A
75 %
B
C
25%
33 1/
33 1/3
EG3
Construction Project
EG5
Venture A
Project
EQTYPE 1
Engineering
Design
EQTYPE 2
EQTYPE 3
Construction
Production
A
33 1/3 B
C
33 1/333 1/3
33 1/3
EG1
Valid
A
50 %
25%
25 %
EG2
75 %
C
25%
EG3
SAP AG 2003
25%
3
D
25 %
EG4
A
A
50 %
A
25 %
A
33 1/3 B
C
33 1/
33 1/3
EG5
D
25 %
B
25%
C
25 %
EG6
D
25 %
25%
C
25 %
EG6
Cost Center
Asset
Internal Order
Plant
Venture
1
Project
Prod Order
PM Order
SAP AG 2003
Cost
CostObject
Object
Project
Cost centre
Internal Order
Joint Venture
Equity Type
Recovery Indicator
JV Object Type
Plant
Maintenance
Order
Production
Order
Network
Order
JIB/JIBE Class
JIB/JIBE Subclass A
SAP AG 2003
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:
y Joint Venture
y Equity Type
y Recovery Indicator
y Joint Venture Object Type
y JIB/JIBE Class
y JIB/JIBE Sub-Class A
Recovery Indicator
Identifies category of a joint venture transaction
CO
MM
MM
FI
SD
CO
PM
Accounting
Interface
PS
PP
HR
AM
Accounting Document
Amount
Vendor
CC-1
JVI001
A01
BI
- 70.50
Vendor
CC-2
JVI002
A01
BI
- 47.00
Cost 1
CC-1
JVI001
A01
BI
60.00
Cost 2
CC-2
JVI002
A01
BI
40.00
Tax
CC-1
JVI001
A01
BI
10.50
Tax
CC-2
JVI002
A01
BI
7.00
JV Interface
Vendor
Cost 1
Cost 2
Tax
CC-1
-117.50
60.00
CC-2
40.00
17.50
FI DATA
GLT0
SAP AG 2003
Special
Ledger
Interface
JV DATA
JVT01
BILLING
JVT02
CUSTOM
DATABASE
Asset Master
Vendor Invoice
JV Document
JV Document
Asset Document
SAP AG 2003
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.
MM Assignments
Material Document
JV Document
Accounting Doc
JV Document
SAP AG 2003
In this example, a goods receipt document is posted to receive stock worth GBP 500 into plant JA01.
JV1001
y Equity Type
y 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.
JV Document
Accounting Doc
SAP AG 2003
In this example, a goods receipt document is posted to receive stock worth GBP 500 into plant JA01.
JV1001
y Equity Type
y 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.
Cutback Processing
Gross
Net
Operating
Exp / Rev
50
Operating
Exp / Rev
100
Cost Object
RI = Bill
Venture A
Venture A
Company Code
50 %
Partner B
EG2
25 %
ET1
Cutback
Partner D
25 %
AR / AP
AR / AP
Partner B
25
Partner D
25
SAP AG 2003
You use cutback to recover costs from joint venture partners. Cutback posts credits against joint venture
costs and charges these costs to venture partners.
Orders
Internal
Allocations
Accounts
Receivable
Costs
JV Integration
Integration Mgr.
Mgr.
JV
JV Summary
Ledger
JV Billing creates
various customized
billing documents to
send to your JV
partners
Billing
Statement
Cutback
Exp. Suppl
JV Billing
Ledger
Partner
Adjustments
JV Integration Mgr.
Paid Cash
Calls
SAP AG 2003
Invoice
Cutback
Invoice
Cash Calls
Partner
Payments
Expenditure
Detail
Inv. Suppl
Detail
FI
Document
Partner Shares
Venture
Partner
JV0001
EqG
FCurr Amt
A01
FCurr
Accounts
Rec.- Cash
Calls
NOK
Lcurr Amt
JVGBU1
600.00
46.74
JV5001
300.00
23.37
JV5101
100.00
7.79
Cash Call
Accounts
Rec.- Cash
Calls
Partner C
Partner A
100
600
Accounts
Rec.- Cash
Calls
Partner B
300
SAP AG 2003
Inter-Company Ventures
Cutback
CO
To Affiliate:
INVOICE
Intercompany
Processing
FI
A/P
Cash Call
Cash Calls
SAP AG 2003
Inter-company functions allow you to book inter-company entries on the books of the operating partner
and any of its affiliated businesses. By identifying these relationships, through inter-company mappings of
accounts and other relevant objects, SAP JVA automates processing of inter-company joint venture
transactions.
Unallocated Costs
Cost Object B
Cost Object A
Materials
Cost Object B
Materials
Materials
Internal Labour
40
Internal Labour
100
Internal Labour
External Labour
80
External Labour
200
External Labour
Staff Salaries
Staff Salaries
Staff Salaries
Vehicles
Vehicles
Vehicles
40%
Travelling
Hotels
8
12
Travelling
20
Travelling
Hotels
30
Hotels
Entertaining
Entertaining
Entertaining
Telecoms
Telecoms
Telecoms
Assessment A
Total
SAP AG 2003
140
Total
- 350
0
40%
Assessment A
140
Total
140
Suspense Processing
Suspense functionality supported for:
Partner Suspense
Equity Group Suspense
Project/WBS Element Suspense
Post Costs
Accounting Document
Accounting Document
Selection
Company Code
GBU1
Venture
JV0001
to JV9999
Itm Account
1
O'head
2
O'head
Posting
Fiscal Year
2002
12
Period
Posting Date
Options
31.12.2002
Test run
SAP AG 2003
JVA supports two types of postings to account for changes in venture ownership.
An ownership change may occur (i.e., a new equity group is assigned as owner of the JV) in the current
period after postings have already been assigned to the old equity group but before Cutback has been run
to assign JV/equity group expenses to partners. JVA provides a process that automatically posts a reversal
of the debit to the original equity group and reposts the expense to the new equity group. Running this
process ensures that all postings to the JV for the period will be assigned to the equity group that owns the
venture as of the end of the period. This posting is executed in JVA because the JVA process Cutback
will access this new expense posting and post appropriate portions to the partners in the new equity group
in FI A/R.
An ownership change may be recorded after the close of a previous accounting period. JVA also offers a
process to handle the accounting impact of this change in ownership. In this case, the posting is made in
FI to the affected partners because processing for the period has already been completed.
Overheads
International Parent company overhead
US/Canada Well related allocations
Overhead
Cost
Stepped Rate Rule
GBP 140 000
1%
GBP
2 800
GBP
500
2%
GBP 10 000
GBP 10 000
5%
GBP
SAP AG 2003
PCO calculates overhead charges for a venture. These charges are uncalculated benefits received from the
operator and the operator's group of companies (the parent company).
PCO rules are defined for a joint venture company in JVA configuration. They are defined as uplift
percentages to be applied to joint costs, based on thresholds. They are called stepped rate rules.
Stepped rate rules are defined in JVA configuration with a name, timeframe, description, and steps. Each
step has a threshold amount and a rate. The rules are assigned to a JOA on the Overhead tab in the JOA
master.
Partner Netting
Partner netting allows you to clear open items from partner accounts,
leaving a single net open item to carry forward to the next accounting
period or fiscal year.
Partner netting postings are fully customizable
Partner A
Venture V1
J - Cutback
5
K Cash Due
4,400
L Cash Called
4,000
4,000 1
4,000 3
400
4,400 6
Joint Costs
4,000
4,000
A/P
2 11,000
Cash Call
Invoice
Cash Call Payment
Invoice Payment
Joint Venture Cutback
Partner Netting
Bank
11,000 2
4,400 5
1.
2.
3.
4.
5.
6.
4 11,000
11,000 4
Venture V1
Partner Netting
Itm SEI Account.
1
Amount
Partner A
400
J
J
Partner A
-4,400
Partner A
4,000
JV Bank
JV Rec. under CC (J,L)
JV Cash Calls Out (K)
Accounts Payable
Joint Costs
- 7,000
400
0
0
6,600
SAP AG 2003
Partner netting is optional. You use partner netting to clear open items from partner accounts, leaving a
single net open item to carry forward to the next accounting period or fiscal year. Partner netting selects
open items by venture, equity group, partner, and (if active) operations month. These are cleared and
replaced by a single net open item.
Rule, for which open items are netted and how the net item is posted, are defined in posting rules in JVA
configuration.
Partner netting selects open items by venture, equity group, partner, and (if active) operations month.
These are cleared and replaced by a single net open item.
Posting rules define which open items are netted and how the net item is posted.
Redetermination
Partner shares are adjusted to reflect changes in business conditions, such as reserves
SAP AG 2003
In each of these cases a new equity group is added to the venture to reflect the changes. The old equity
group is retained, so that adjustments to the old shares can be made and history of postings is always
available.
For similar reasons, a change in funding currency is affected by creating a new equity group, with the
funding currency added or removed.
When you create a new equity group, documents, which should have been posted to the new equity group,
may already have been posted to the old equity group. You could reverse all the incorrect postings and
post to the new equity group. However, SAP JVA provides the following two programs to handle these
changes:
y The current period program handles changes before cutback has been run for the old equity group
y The prior period program handles changes after cutback has been run for the old equity group
JV Partner Auditing
Standard JVA Reports:
Partner/billing indicator
Statement
Exp. Suppl
Expenditure
Detail
Inv. Suppl
Detail
Invoice
Ledger 4B and 4D
JVA Billing
Balances
Ledger 4A and 4C
JVA Balances
SAP AG 2003
Audit support allows you to give non-operating partners detailed accounting transaction records in an
electronic format to assist transaction audits. These records are based on operator-defined selection criteria
and can be restricted at multiple levels. JADE requirements are also supported.
Non-Operating Ventures
Online transaction for incoming invoices for non-operated ventures
Input forms, defined in JVA configuration, control the layout of the input screens
Input form includes the SAP coding block information (account, cost object,
asset)
Incoming cash calls are handled with the cash call functions
Non-operated venture processing is fully integrated with SAP
accounts payable functions
Invoice
Da
Tra ta En
nsa try
ctio
n
Cash Call
R/3
Accounts
Payable
Nonoperating
net share
all
h C ction
s
a
C nsa
Tra
SAP AG 2003
SAP AG 2003
Balanced books by venture allows you to produce balanced financial statements on a venture by venture
basis. If a document without balancing-entries-by-venture is posted to the joint venture ledger, the data
capture process creates an inter-venture booking, to balance the document by venture.
Bank account switching is common practice outside North America. Large ventures are funded from one
or more dedicated venture bank accounts. Depending on the venture, SAP JVA determines the bank
account from which an invoice is paid. SAP JVA also produces correspondence, notifying the bank to
make all required transactions for the movement of cash between accounts. In addition, bank account
switching produces all required settlement documents, and can calculate all applicable interest.
Asset and material transfer capabilities allow you transfer assets and materials to joint venture properties at
the current replacement price, rather than at historical cost.
Net profit and carried interest profit partners allow you to allocate payments and a net profit interest to a
non-operating partner, and to set up a carried interest arrangement, if necessary.
SAP AG 2003