Page 8 - FAC4862 slides JAs and Revenue CM

JOINT ARRANGEMENTS

Background

• Two types of joint arrangements exist, namely

• joint operations

• joint ventures

• IFRS 11 requires a party to a joint arrangement to determine the
type of joint arrangement in which it is involved by assessing its
rights and obligations arising from the arrangement. (IFRS 11.14)

• The entity’s rights and obligations will be assessed by considering the
structure and legal form, contractual terms as well as other facts and

circumstances when relevant.

• Once it has determined that it has an investment in a joint
operation, the entity will recognise the assets, liabilities and related

revenue and expenses in relation to its interest in the arrangement in
accordance with the IFRS applicable to the particular assets,
liabilities, revenue and expenses.

• Once it has determined that it has an interest in a joint venture, the
entity will recognise the investment in the joint venture following the
equity method in accordance with IAS 28, Accounting for

Investments in Associates and Joint Ventures.

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