International GAAP 2013: Generally Accepted Accounting Principles under International Financial Reporting Standards

Chapter 14

Joint arrangements (IFRS 11)

1 Introduction

1.1 The nature of joint arrangements

1.2 Development of IFRS 11

1.3 Future developments

1.3.1 Joint ventures

1.3.1.A Research programme on equity method of accounting

1.3.1.B Loss of control of subsidiary that becomes joint venture

1.3.1.C Exposure Draft (ED/2011/4) – Investment Entities

1.3.2 Joint operations

2 Effective date, objective and scope of IFRS 11

2.1 Effective date

2.2 Objective

2.3 Scope

2.3.1 Application by venture capital organisations and similar entities

2.3.2 Application to joint ventures held for sale

3 Joint arrangement

3.1 Unit of account

4 Joint control

4.1 Relevant activities in a joint arrangement

4.1.1 Sequential activities

4.2 Rights to control collectively

4.2.1 Protective rights, including some veto rights

4.2.2 Potential voting rights and joint control

4.2.3 Other evidence of joint control

4.2.4 Delegated decision-making

4.2.5 Related parties and de facto agents

4.2.6 Role of a government

4.3 Unanimous consent

4.3.1 Arrangements involving passive investors

4.3.2 Ultimate voting authority

4.3.3 Arbitration

4.3.4 Implicit joint control

4.3.5 De facto joint control vs. joint de facto control

4.4 Other practical issues with assessing joint control

4.4.1 Lease or a joint arrangement

4.4.2 Evaluate multiple agreements together

5 Classification of a joint arrangement: joint operations and joint ventures

5.1 Separate vehicle or not

5.2 Legal form of the separate vehicle

5.3 Contractual terms

5.3.1 Guarantees ...