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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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