Ind As 111 - Joint Arrangements.

Revise together with Questions

JointArrangement is an ammangement of which two on more panties haveJointcontrol

Ind As Ill applied to All Entities that are panty to a Joint Ammangement
JointAmmangement has following characteristics

a Panties bound by contractual Ammangement AND

b Contractual Ammangementgives two on more panties Joint control ofthearrangement

A Jointarrangement can be structured through a separateVehicle

Eg ACtf and Bug incorporated a new Entity separatevehicle xy ud

JOINT CONTROL

Contractually Agreed Shaming

of control which Exist only when DECISIONS ABOUT

RELEVANT ACTIVITIES Mequimes UNANIMOUS CONSENT

of Panties Shaming Control
Control Assessmentis done based on guidance in IndAs110 control Evaluation

Power overthe relevant me to Ability to use power to affect

activities of investee means returns of investee
Hence
if all the panties have Power Exposure tometwins and ability to use power to
affectinvestee returns then panties have control collectively

FLOWCHART
Is there a contractual Arrangement
yes
AmeAYamGroup
ofParties required to Act together to direct Relevant Activities
yes

Are decisions about Relevant Activities taken with Unanimous Consent

Yes

JointControl Exists

If Above conditions not fulfilled Arrangement is outside scope of Ind As Itt and
Other relevantand As such as Pnd As 109 on 28 on 110 applies
Motel Circumstances where contractual anmangement minimum proportion ofvotingrights

to makedecision about relevantactivities When that minimum required Proportion

can be achieved by more than one combination of panties agreeing together that

arrangement is JointArrangement only if contract specifies which panties agree

unanimously to take decisions about relevant activities Refer an
4957

Note2 It is notnecessary that all the panties should have Joint control to form a

JointArrangement Somepanties may be participating in Joint Arrangement

but not having JointControl

Mates if decisions that

give panty protective nights and not decisions about
relevantactivities that party is not a party with Joint Arrangement

Not4 A contractual arrangement might include clauses on Resolution of Disputes

Where decisions may allow to be made without unanimous consent Such

provisions does not prevent from being Joint Arrangement

Types of Joint Ammangements

JointVenture Joint Operation

Joint Arrangements where panties that have Joint Arrangements where panties that have
Joint control have nights to net assets of Jointcontrol have rights to the assets and
the Ammangement for the liabilities
obligation
panties are called Joint Venturers
9panties are called Jointoperatorsy
Ind As 28 Applies in Joint Ventures Ind As the applies in Jointoperation
 of JointArrangement between Joint venture and Jointoperation
Fom classification

Panties shall assess their Rights and obligations arising from anmangement
When making assessment Entity shall consider structure of the arrangement

If JointArrangement is structured If JointArrangement is Not structured

through separatevehicle through separatevehicle
Entity shall consider
a legal form of separatevehicle
b Termsof Contractual Arrangement Joint operation
c other facts and Circumstances

JointVenture Joint operation

 Accounting of Joint operation

In Accounting of interest in Jointoperation in ses and CFS of Joint operators

A Joint operator shall recognise in its Sfs fees its interest in Jointoperations
a Its assets incl Shane
of assets held jointly
g its liabilities incl shame of liabilities held jointly
e its share Revenue fromsale its output arising
of of from Jo
d its Expenses incl shame of Expenses incurred jointly

A Joint openatom shall account assets liabilities Revenue Expenses relating to its interest
in a Joint operation applying relevantIndAs applicable
1017

Assets
cash 20
Building t 240
Building 2 100

liabilities
Debt 240
Benefitmenobligation so
20
family 70
5,11 Iggy Tho

2 Accounting bon sales on contribution of Assets to a Jo in Ses ers

f of Jointopenatoms
When a Joint operation contributes on sales any assets to the Jo it is in effect transacting
with other panties to the Jo in proportion to other panties interest
Themebone Joint
openatom shall recognise Gains losses only to the extentof other
parties interest in the Jo
 And 601
Another 401

Individual Entity Jointoperation

saleofCAHE100Assets to50 2 80
botAssetsoldto Altd hopto AnotherJoint
Any operator Aud AnotherJo
Outof E 100 cA of Asset 604 hot
boy 404
CA ofE60sold CAof E90sold to JournalEntry
anotherJointoperator
to itself Bank All DM 32
soldto E 1407.07807 loss 8
sold10971001480
i e E48 ie E 32 To Asset 40

655160 481 F 12
This is Unrealisedloss
I notconsideredsale

3 Accounting for Purchase

of Assetfrom 50 in SFS CFS ofJoint openatom
If Joint openatom purchase any assetfrom 50 it shall not recognise its SHAREof
gains losses untill it resells to third panties similar to above point a y
concept

Aud 601
Another 40

Only A Ud Accounting is
asked
Individual Entity Jointoperation

CAofE100Purchased Don780 boom50

601Held Previously Add hot Purchased
Ayy And AnotherTo

If of 50 then
thiswas not a case 604 hot
insuchcasetoo profitof220onpurchase
was not recognised Because Atthetime
ofpurchase recognition is done at cost 401of80
and no profit is hooked
Journal
Journal
Entry thathome Pamchase botShane Assetale or 32
AssetAle pr go already owned by Aud TO Bank 32
TO Bank 80 i e Now Additional hot purchased
h Accounting
by a Joint openatom that is a party to the Jo but does not have
Joint control

whether the parity has right to assets andobligation for liabilities relating to Jo

Yes No

Account as pen JointOperation Account as Pen Ind As Applicable

Accounting Discussed Above to that interest EndAs109on 28

Accounting of Joint Ventures

In SFS In CFS
I N
Accounting as pen Accounting as pen
Ind As 27 Ind As 28

by an Entity that is a party to theJointventure but

Accounting

does not have Joint control for panties having Jointcontrol Equity method

Check whether Party has significant Influence oven Jointventure

if nothaving JointControl No Joint control and

but significant Influence No significantInfluence
exists A
And As 109
SFS IndAs27 lostonIndAs109
CFS Ind As28 Equity method
Accounting boy acquisition in Joint operation in sisters ofJointoperations

Befen Phd As 103 Business Combination TYy 913