A recent JD Edwards tutorial video showed how to set up and process advanced variable numerator single tiered allocations for a joint venture. The objectives of the video were to help users:

• Understand the advanced variable numerator allocations for joint ventures
• Set up specifications to allocate the expense to joint venture business units
• Compute and review the allocated amounts

How to Set Up and Process Single Tiered Allocations

Understanding Allocations

The indirect cost incurred by the Managing Partner can be allocated to one or more business units that benefitted from the cost. The indirect cost will only be included in the distribution process after the costs are allocated.

After the costs are allocated to the business units, the allocated amounts are distributed to the partners, including the Managing Partner.

Advanced Variable Numerator Allocations is a feature in the JD Edwards financial system that enables you to perform various types of allocations. You will use the allocation type Joint Venture-Based Allocations to allocate indirect costs to the joint venture.

The system enables you to allocate indirect costs to a single tier or to multiple tiers in the joint venture hierarchy. This tutorial shows how to allocate indirect cost to a single tier of business units in the hierarchy.

Setting Up Specifications for Allocations

To use the joint venture-based allocations, you must set up the following specifications:

• Set up two versions for the Select F0902 Source/Basis program (R09123B)
• Set up two versions for the Select F09J30S Source/Basis program (R09J30S)

You will use the data selection of these versions to specify the source and basis data for the allocation.

The first step is setting up the two versions of the Select F0902 Source/Basis program (R09123B) and setting up the data selection for the versions.

Access the Advanced Variable Numerator Allocation Setup program (P09123B) and click the button “Create Source/Basis Data Selection Versions for Account Balance Based Allocations.” On the Add Version form, enter a version and version title. You will create one version to select the source transactions from the Account Balances Table (F0902) and another version to select the transaction for the Base on Factor or the Basis from the F0902 table. It is important to provide identifiable names for the versions and version titles so you can easily identify the source and basis versions.

In the Data Selection form for the source version, specify the object accounts that the system will use to select the source expense transactions to allocate. For example, if you are allocating the telephone expense incurred by the managing business unit 981 to the other business units, your data selection must include the object account for the telephone expense for the business unit 981.

In the Data Selection form for the basis version, specify the object accounts that the system will use to select the basis on which the expense will be allocated. For example, if the telephone expense is to be allocated based on the headcount of each business unit, then your data selection must include the object account for the headcount.

Next, you will need to set up one version for the Select F09J30S Source/Basis program (R09J30S) for the basis data. To access the R09J30S program, click the button “Create Source/Basis Joint Venture Data Selection Versions for Joint Venture Based Allocations” on the Advanced Variable Numerator Allocation Setup form.

The R09J30S program enables you to select the joint venture data to be combined with the data selected from the Account Balances Table F0902. For example, if you want to allocate the telephone expense to all of the business units in a joint venture, you must specify the joint venture name in the data selection for the base version.

Next, you will create an allocation rule and add the versions of the R09123B and R09J30S programs to the rule.

To create the allocation rule, access the Advanced Variable Numerator Program P09123. On the Specify Advanced Variable Numerator Computation form, specify the allocation type as Joint Venture-Based Allocation. Make sure that the posting sequence field is left blank. This field is used to control the sequence for multi-tiered allocations. On the source basis tab, complete the fields in the three sections.

In the Data Selection field in the Source Specifications section of the form, specify the version of the R09J123B program that you have created. Use the other fields to add additional filters to the source account balances data selected using the source version of the R09123B program.

Similarly, specify the basis version of the R09123B program in the Data Selection field, and use the other fields to add additional filters to the data selected using this program.

The Ratio field provides you with the ability to select data based on business unit, business unit type, related business unit, and business unit category codes.

Then, in the Data Selection field on the Joint Venture section of the form, specify the basis version of the R09J30S program that you have created and use the other fields to add additional filters to the selected basis joint venture data.

For example, you can specify a business unit operational status to select the data associated with the basis business units that have this operational status.

Computing and Reviewing Allocated Amounts

To compute the allocation and post allocation entries, run the Compute Advanced Variable Numerator Allocations program (R09123). Use the PDF report of your R09123 batch to review information about allocated amounts or units. You can review the allocation entries using the Allocations Journal Review program (P0011).

To learn more about setting up and processing single tiered allocations in JD Edwards EnterpriseOne, check out the video below. For more on Joint Venture Management, check out the additional Quest resources attached below.