Joint venture accounting
Joint venture accounting
Manage the individual fixed asset ownership of each joint venture partner without any duplication of effort.
Joint Venture Accounting extends the functionality of a normal multi database system of asset registers to incorporate the ownership structure and history of 100% of the joint venture itself and its individual business partners. The reporting requirements for joint venture accounting create the need to manage the individual ownership of each venture partner with a minimum of administrative effort.
This solution can accommodate one or more joint ventures in a single system by using multiple databases and an intelligent interface function to pass common transactional data between them in the appropriate proportions and under the prescribed conditions, without duplicating input or resorting to repetitive postings.
This solution can accommodate one or more joint ventures in a single system by using multiple databases and an intelligent interface function to pass common transactional data between them in the appropriate proportions and under the prescribed conditions, without duplicating input or resorting to repetitive postings.
| The Activa Joint Venture Accounting solution has been successfully deployed to industries such as private electric utilities, open cut and underground mining operations, a nickel refiner and publicy listed internatonal retail property investors. |
As a multi entity system, one database can support any number of separate corporate entities. However, it is necessary to separate partners in the same joint venture into their own databases. This is because the partners in a single joint venture share the ownership of each asset in common. Separation allows the system to reflect the unique ownership share of each asset and to maintain individual reporting preferences and tax electives.
The requirement to separate partners of the same joint venture does not prevent the cohabitation of multiple joint ventures in a single database and this is particularly useful where common, or complex cross-ownership situations exist. Multiple joint ventures can, of course, have common partners and partners that, for instance, have common owners, can cohabit the same database.
The requirement to separate partners of the same joint venture does not prevent the cohabitation of multiple joint ventures in a single database and this is particularly useful where common, or complex cross-ownership situations exist. Multiple joint ventures can, of course, have common partners and partners that, for instance, have common owners, can cohabit the same database.
It is quite common in a joint venture for the percentage value of any individual ownership share to vary over the life of the venture. In fact, it is invariably the case. Activa records the historical ownership percentages for each partner at any time. It also provides the tools to divest part or all of these ownerships and to maintain the appropriate disposal and retained ownership records.
It is usually not possible to combine separately acquired tranches of the same joint venture for several reasons;
It is usually not possible to combine separately acquired tranches of the same joint venture for several reasons;
- each tranche is acquired at a different time
- each tranche is acquired under different market conditions
- the accounting treatment is different
- the tax treatment is different for depreciation and/or capital gains
Any one of these reasons would necessitate the separation of the individual share purchases into separate databases. Most important is the fact that for each individual asset there can be only one record in each database and this is a limiting factor.
One of the key benefits of the Activa Joint Venture Accounting option is the ability to process data transactions without duplication of effort or the need to predetermine the individual JV partner share values. This is a distinct advantage.
All transactions relating to the joint venture are processed directly against the 100% joint venture database. This database contains a full ownership history and set of rules for each JV partner reflecting their individual electives for each key parameter, particularly with regard to depreciation.
All transactions relating to the joint venture are processed directly against the 100% joint venture database. This database contains a full ownership history and set of rules for each JV partner reflecting their individual electives for each key parameter, particularly with regard to depreciation.
At the end of each accounting period when the 100% Joint Venture has been aged and reconciled, the periodic transactions can be interfaced to all associated joint venture partner databases, according to the rules, as a single step process. This process creates a full audit trail and interface report. Individual JV partner databases are always reported individually.
| The Activa Joint Venture Accounting is a value-added option to the Fixed Assets Register and also requires Multiple Database option to function. If you would like more information relating to its use and application please register a contact request and we will get back to you soon. |
These notes are intended as a product brief and should not be read as the full specification of the Activa Joint Venture Accounting option. If you have more specific questions please use the Search option on this site. If you do not find what you are looking for on other pages please complete a Contact Request noting your area of interest and we will respond by return.
The following pages contain information related to the items discussed above;
The following pages contain information related to the items discussed above;
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| Article last updated : Apr 9 2011 1:16PM |  |