What does IFRS 11 discuss?
About. IFRS 11 establishes principles for financial reporting by entities that have an interest in arrangements that are controlled jointly (joint arrangements). A joint arrangement is an arrangement of which two or more parties have joint control.
What is the scope of IFRS 11?
IFRS 11 applies to all entities that are a party to a joint arrangement. There was previously a scope exemption in IAS 31 relating to venture capital organizations and mutual funds and unit trusts [IAS 31.1]. Such entities are not excluded from the scope of IFRS 11 but are eligible for a measurement exemption.
What is the difference between joint venture and joint operation?
The key distinction between a joint operation and a joint venture is that a joint venturer has rights to the net assets of a joint venture. In contrast, for a joint operation, the parties that have joint control over the arrangement have rights to the assets, and obligations for the liabilities, of the arrangement.
What are joint arrangements?
A joint arrangement is an arrangement in which two or more parties have joint control. Joint control is the agreed sharing of control of an arrangement by way of a binding arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
How do you account for a joint venture?
A joint venture account is credited and a bank account or debtor account is debited in case of either cash sale or credit sale. Each co-venturer debits joint venture account and credits personal accounts of other co-venturer on the account of either goods purchased or expensed by other co-venturers.