Page 16 - PowerPoint Presentation

JOINT ARRANGEMENTS

Joint Operations

• Transactions with JO (B34 – B37)

• Downstream: from operator to JO

• Partly a transaction with the other venturers

• Profit recognised only to extent of other operators interest

• No profit to extent transacting within group

• Upstream: from JO to operator

• Only recognise share of profit in JO when sold to third party

• i.e. when asset moves outside the group

• Would normally only recognise own share of profit

• Thus, effectively recognise no profit until asset is resold

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