Page 283 - F2 Integrated Workbook STUDENT 2019

Basic group accounts – goodwill and joint arrangements

IFRS 11 Joint arrangements

2.1 Definitions as per IFRS 11 Joint arrangements

JOINT ARRANGEMENT – arrangements were 2 or more parties
have JOINT CONTROL.

JOINT CONTROL – achieved when:

 Contractual arrangement exists between the parties

 Decisions require the unanimous consent of all parties.

Two types of joint arrangement exist:

(1) joint ventures

(2) joint operations.

JOINT VENTURES – the parties have the rights to the NET ASSETS
of the arrangement.

e.g. A separate entity exists that is >50% owned between the
shareholders

JOINT OPERATIONS – the parties have the rights to THE ASSETS
AND THE OBLIGATIONS of the arrangement.

e.g. The companies involved in the joint operation contribute their
own assets and liabilities to a project. No separate entity exists.

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