Tuesday, 25 May 2021
Joint Venture Accounting (JVA) is an accounting system used when two or more businesses want to share control of and undertake an economic business activity together.
“Companies typically form joint venture partnerships to minimize risks involved in capital intensive operations that demand a long payback period. A joint venture partnership consists of an operating partner (operator) and one or more non-operating partners who combine monetary or personnel resources to share a project’s expenses and revenues. The operator manages the venture, arranges venture activities, and maintains’ accounting records. The operator remits venture expenses, collects revenues, and distributes these to the partners, according to their ownership shares. SAP JVA is a complete accounting system for joint ventures.”
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JVA is predominately used by oil & gas and other capital intensive operations including the mining industry. This includes companies like MobilExxon, ConocoPhillips, BHP, Woodside Inpex and Beach Energy just to name a few.
Particularly for oil & gas and other capital intensive operations that have entered into joint venture arrangements, SAP JVA provides a purpose-built solution to allow businesses to manage, track and report their joint venture obligations.
SAP JVA will track each partner’s percentages and show what they have contributed & spent. This tool centrally tracks and manages the activities and expenditure of one or more Joint Ventures that occur within a business.
SAP offers SAP JVA – a complete accounting system for Joint Ventures. For the past 12 months, Think180 have been involved with implementing and configuring SAP JVA for a major Australian Oil & Gas company.
The difference is, the SAP System Think180 configured, was the very first implementation and go-live in the world that uses only one finance ledger – JVA on ACDOCA. Previously, standard SAP JVA was based on the Special Ledger technology – made up of separate ledgers that were used to save accounting documents and data. ACDOCA now acts as a “single source of truth” where all information can be centrally managed.
Our resources worked closely with the SAP JVA development team in Germany to implement this new JVA based solution. Think180 ensured that the JVA module was able to cater to the business and financial requirements of the client and worked within the framework of their financial design. Our team was also responsible for integration between the finance department, payment processes and supply chain, and the new JVA system.
If you are looking into a better system for your Joint Venture Accounting, reach out to us. Think180’s experienced and empathetic team can help you implement and configure SAP JVA into your existing ERP or S/4.