Chapter 12 more - Joint Arrangements

Question 1

Joint Operation

Answer 1

No separate entity is established.

Shown as an investment in the financial statements

Question 2

Joint Operation Accounting

Answer 2

Assets / Liabilities fully owned and controlled plus share of jointly controlled assets / liabilities

Income / Expenses fully owned and controlled plus share of jointly controlled Income / Expenses

Each individual entity shows its own assets, liabilities, expenses, share of revenues

Question 3

Joint Venture

Answer 3

A separate entity is established

Having its own separate accounts

Question 4

Joint Venture Accounting

Answer 4

SOFP - Cost of Investment in the Joint Venture

SOCI - Investment Income from JV, share of profit after tax

IAS 28

Question 5

Joint Venture Accounting

Answer 5

Equity method

Adjustments:

• eliminate dividends from JV
• calculate group share of JV profit
• incorporate JV by adding amendments

IAS 28