Changing Equity Groups: Problem Cutback Calculation

[Former Member]

Hello All,

I have read the following to do at the moment to set up a New Equity Group regading changes on sharing percentages:

at the beginning of the period, JV1 is owned by equity group EG1. During the period, an expense of $1,000 is booked to cost object JV1_CC1 with a document date of 1/15/97.

Expenses booked to JVA-related cost objects are assigned to the venture identified on the cost object (in the case of JV1_CC1, JV1) and to the equity group that owns the venture as of the document date. The equity group is identified by the combination of the JV and the equity type, which is also assigned to the cost object.

In this example, equity type ET1 is specified on cost object JV1_CC1. The combination of joint venture JV1 and equity type ET1 associate the expense with equity group EG1.

In this example, however, EG2 (also associated with equity type ET1) takes over ownership of JV1 on 1/20/97. If equity change management is not run before Cutback, the original JVA record associating the expense with EG1 will remain intact, and Cutback will assign the expense booked to JV1_CC1 to the partners in equity group EG1. But If equity change management is run before Cutback, the original record will be reversed, the expense will be rebooked with the new venture and equity group assignment, and Cutback will assign the expense booked to JV1_CC1 to the partners of equity group EG2.

When run in update, equity change management directly updates the JVA summary ledger (4A), but Cutback must be run after equity change management to update FI.

However, we did not ran GJEC as previous step and ran directly GJ19 to adjust periords and then calculate GJCB.

How can i manage if i did not run GJEC before run GJ19 and then GJCB?

I have some differences when i check account into GJRG_5J1B, because there are some postings related to Old Equity Group and from December 2009 when i, in fact, have adjusted from Jan-10 to Nov-10.

For more details: Old EG Date Creation: Dec-2009

New EG Date Creation: Dec-2010

Thanks in advance to who can advice about this.

Regards.

Jeremías.

[Former Member]

Hi,

I am sorry but the scenario that you provided was not clear. I have explained equity change process with

an example as below. Hope this answers your query.

1. GJEC is run when equity group change happens and cutback has not been run.

2. GJ19 is executed when equity group change has happened and also cutback has already run.

Essentialy GJ19 = GJEC + GJCB

An example

EG VALID FROM

_________________

EG1 15/01/1997

1. Say a doc. is posted on 20/01/1997. With the above setup of EGs then the JV doc will have EG as EG1.

2. Say cutback has not been executed and there is a change in EG or partnership as below

EG VALID FROM

_________________

EG1 15/01/1997

EG2 19/01/1997

3. So now the doc. posted in step1 has wrong EG. The correct EG for that doc. should be EG2 and not EG1.

4. Insuch a case GJEC should be executed to reclassify doc. posted in step1 to have the new EG i.e EG2.

5. If in step 2, say cutback has already been run and equity group has changed then insuch a case GJ19 should be used.

6. Please note that GJEC posts JV docs while GJ19 posts both FI and JV docs.

Hope this clears your query.

Rgrds,

Satyajit

[Former Member]

Hi Satyajit,

Your explanation is very good. I hope you can answer a question related to your explanation. When I face scenario A i.e. cutback hasn't been run, I am able to run GJEC and fix the issue without any problems, but with scenario B, when cutback has been run, I am getting an error when I run GJ19.

Equity groups E02 and E01 are assigned to different equity types.

Message no. G5236

I am unable to use GJ19 due to this. I am having to reverse the postings and rebook them to the new equity group. Should I reverse the cutback using GJCB_REV and then run precutback and then run GJCB again or can I get Gj19 to work and run it after the cutback?

Please advice