Ifrs 11

Question 1

What are the different levels of control

Answer 1

50% above- subsidary (consolidated accounts)
20-50%- associate (significant influence, equity accounting)
less than 20%- trade investment (ifrs 9) no control or significant influence

Question 2

what is a joint arrangement

Answer 2

joined arrangement is a partnership of companies.
for joint arrangements joint control is must
joint control means unanimous consent of all parties

Question 3

company has 3 shareholders A,B and C each with 33% shareholding. article says 2/3 majority can enforce any decision. is this joint control?

Answer 3

no because it can be A or B or B or C. not joint control as it’s not constant

Question 4

company has 3 SH
A- 50%
B- 35%
C- 15%

article says for any decision 75% vote is must

Answer 4

now A and B have joint control over this company

Question 5

what are the two types of joint arrangements

Answer 5

1) joint operation:
*assets, liabilities, income, expenses are shared by parties
*not a separate vehicle
*treatment: record your share of assets, liabilities, income and expense in your books

2) Joint venture:
*they dont share revenues and costs, they share profit
*separate vehicle/ company
*like investment in shares (if i am SH of bankislami i cant go to land and say it’s my land)
*treatment: equity accounting like associates (one line adjustment)
it’s a limited liability company