Ch. 28 - Joint Arrangements

Question 1

Control rule in joint ventures

Answer 1

parties must have joint control

Question 2

Classified in one of two ways:

Answer 2

1. joint operations

2. Joint ventures

Question 3

Joint Operations:

Answer 3

parties have rights to assets and obligations to liabilities

Question 4

Joint Ventures:

Answer 4

parties have rights to the net assets

Question 5

Four considerations in classification:

Answer 5

1. Structure: joint operations are not separate legal entities
2. Legal form
3. Contractual terms
4. Other facts and circumstances

Question 6

Recording for Joint Operations:

Answer 6

recorded directly in the FS as assets/liabilities and revenue/expenses

Question 7

Recording for Joint Ventures:

Answer 7

recorded using the equity method

Question 8

ASPE - naming difference

Answer 8

1. ASPE uses the terms jointly controlled operations and jointly controlled assets instead of Joint operations
2. ASPE uses the term jointly controlled enterprises instead of Joint ventures and can use the equity or cost method