question

I don't think this is possible in a truly set based manner - because the fact that you have more than one PartnerID value in the ValuesToReduce table makes it an iterative process. Is there any way that you can re-factor such that PartnerID is unique in the values to reduce table? As that would make the problem much much simpler...

If not, then the way I would attack it is actually with a cursor (because it is an iterative process in it's nature). In fact, I would use two cursors, with logic roughly equivalent to:

Get cursor R for Reserves ordered by PartnerID
Get cursor V for ValuesToReduce ordered by PartnerID and Value descending

while R.ReadRow
begin
  if V.PartnerID <> R.PartnerID
  begin
    Read V until V.PartnerID = R.PartnerID
  end
  while R.Value <> 0 and R.PartnerID = V.PartnerID
    Subtract as much as possible from V, decrement R, update both
    Read V
  end
end

edit -> I really hope someone comes along with a set-based solution, however. I'd learn a lot from that.

An interesting question, but I don't think you can do it with as a set-based solution. Even if you could, I'm not sure you would want to. Any solution you could come up with will almost certainly look a little crazy to the next guy that's got to support it.

Most old-school db guys would have already passed this off as something you should handle in your application rather than in the database. I don't exactly believe in hard-line rules, but in this case I think you either have to use your application or some cursors/loops to get the functionality you're looking for.

Here is a set based approach.

DECLARE @ValsToReduce TABLE(
ValsToReduceId INT,
PartnerID INT,
Value NUMERIC(9,2)
);

INSERT INTO @ValsToReduce VALUES (1,1,53.15);
INSERT INTO @ValsToReduce VALUES (2,2,601.98);
INSERT INTO @ValsToReduce VALUES (3,1,91.05);
INSERT INTO @ValsToReduce VALUES (4,2,44.56);
INSERT INTO @ValsToReduce VALUES (5,3,19.11);

DECLARE @Reserves TABLE(
ReserveId INT,
PartnerId INT,
VALUE NUMERIC(9,2)
);

INSERT INTO @Reserves VALUES (1,1,-101.55);
INSERT INTO @Reserves VALUES (2,2,-425.19);
INSERT INTO @Reserves VALUES (3,3,-28.17);

--Hold remainder values to update Reserves
Declare @Results TABLE(
ReserveId INT,
PartnerId INT,
Remainder NUMERIC(9,2)
);

;WITH cte
AS
(
SELECT [vtr].[ValsToReduceId],[vtr].[PartnerID],vtr.[Value] AS ValToReduce,r.[VALUE] AS Reserve
FROM @ValsToReduce vtr
INNER JOIN @Reserves r
ON [vtr].[PartnerID] = [r].[PartnerId]
)
UPDATE v1
SET Value = v2.New_Value
OUTPUT v2.[ValsToReduceId],v2.[PartnerId], v2.[Remainder] INTO @Results
FROM @ValsToReduce v1
INNER JOIN(
    SELECT
    	[t1].[ValsToReduceId],
    	[t1].[PartnerID],
    	[t1].[ValToReduce],
    	[t1].[Reserve],
    	CASE
    		WHEN MAX([t2].[ValsToReduceId]) IS NULL THEN 
    			CASE 
    				WHEN t1.Reserve + t1.[ValToReduce] < 0 
    				THEN 0
    				ELSE t1.Reserve + t1.[ValToReduce]
    			END
    		ELSE
    			CASE 
    				WHEN (t1.Reserve + SUM(t2.ValToReduce)) + t1.[ValToReduce] <= 0
    				THEN 0
    				WHEN (t1.Reserve + SUM(t2.ValToReduce)) > 0
    				THEN t1.[ValToReduce]
    			ELSE (t1.Reserve + SUM(t2.ValToReduce)) + t1.[ValToReduce]
    			END
    	END AS New_Value,
    	CASE	
    		WHEN  MAX([t2].[ValsToReduceId]) IS NULL AND t1.Reserve + t1.[ValToReduce] > 0
    		THEN 0
    		WHEN  MAX([t2].[ValsToReduceId]) IS NULL 
    		THEN t1.Reserve + t1.[ValToReduce]
    		WHEN t1.[Reserve] + SUM(t2.ValToReduce+t1.[ValToReduce]) > 0
    		THEN 0
    	ELSE t1.[Reserve] + SUM(t2.ValToReduce+t1.[ValToReduce]) 
    	END AS Remainder
    FROM cte t1
    LEFT JOIN cte t2
    	ON [t1].[ValsToReduceId] > [t2].[ValsToReduceId]
    		AND [t1].[PartnerID] = [t2].[PartnerID]
    GROUP BY
    	[t1].[ValsToReduceId],
    	[t1].[PartnerID],
    	[t1].[ValToReduce],
    	[t1].[Reserve]
) AS v2
    ON  [v1].[ValsToReduceId] = [v2].[ValsToReduceId]
    	AND [v1].[PartnerID] = [v2].[PartnerID]

UPDATE r
SET [VALUE] = v2.[Remainder]
FROM @Reserves r
INNER JOIN(
    SELECT 
    	[PartnerId],
    	[Remainder],
    	ROW_NUMBER() OVER(PARTITION BY PartnerID ORDER BY ReserveId DESC) AS seq
    from @Results
) AS v2
    ON  [r].[PartnerID] = [v2].[PartnerID]
WHERE v2.[seq] = 1

SELECT *
FROM @ValsToReduce

SELECT *
FROM @Reserves