Hi all, I work at a small startup that is a joint venture between multiple companies. The
Accounting For Mistakes, Errors & Accidental Charges
Answers
Are you asking about the allocation of the cost or an from an
Read the JV agreement. It should mention something about cost sharing, allocation, or treatment. If silent, your management company should reconfirm with all partners or the parent company at the very least. Recommendations or what we think will be moot if the JV agreement says otherwise.
Do not let it pile up and remain unresolved as (1) it will affect your cashflow and (2) it will be a mess and difficult to untangle down the road.
Totally agree with Emerson.
If the JV agreement is silent, and management is agnostic, I would recommend treating it as an inter-company rec/pay. An invoice typically involves crediting some type of revenue account, which would be inappropriate from a GAAP standpoint.
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I agree Scott. The JV agreement would dictate how, what, and when. rec/pay is probably the best way to treat it.
This got me laughing out loud....."....will ACCIDENTALLY charge expenses to the parent company."
Whether intended or unintended....that was funny!
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