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Ind AS 111 Joint Arrangements Summary

Indian Accounting Standard (Ind AS) 111 Summary

Indian Accounting Standard (Ind AS) 111, Joint Arrangements establishes principles for financial reporting by entities that have an interest in arrangements that are controlled jointly.

A joint arrangement is an arrangement over which two or more parties have joint control and can be either in the form of a joint operation or a joint venture depending upon the rights and obligations of the parties to the arrangement.

In a joint operation, the parties to the arrangement have rights to the assets and obligations for the liabilities related to the arrangement.

In a joint venture, the parties to the arrangement have rights to the net assets of the arrangement.

A joint arrangement not structured through a separate vehicle is a joint operation.

A joint arrangement structured through a separate vehicle may be either a joint operation or a joint venture. Classification depends on the legal form of the vehicle, contractual arrangement and an assessment of ‘other facts and circumstances’.

A joint venturer accounts for its interest in a joint venture in the same way as an investment in an associate – i.e. generally under the equity method.

A joint operator recognises its assets, liabilities and transactions – including its share in those arising jointly – in both its consolidated and separate financial statements. These assets, liabilities and transactions are accounted for in accordance with the relevant Ind ASs.

A party to a joint venture that does not have joint control accounts for its interest as a financial instrument, or under the equity method if significant influence exists.

A party to a joint operation that does not have joint control recognises its assets, liabilities and transactions – including its share in those arising jointly – if it has rights to the assets and obligations for the liabilities of the joint operation.

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