Joint arrangements Flashcards
1
Q
Two types
A
- Joint operations
2. Joint venture
2
Q
Joint operations
A
Right to individual assets and liabilities.
More involved
3
Q
Joint Venture
A
Right to net assets only
Equity rights
4
Q
Not setup through a separate vehicle (sep entity)
A
Joint operation
5
Q
When would be deemed a joint venture
A
Separate entity
Legal form is a corp
Contract shows it will operate on its own
6
Q
Joint operations accounting
A
No investment account
Does a business combination. Combines B.S and I.S
7
Q
Joint venture accounting
A
Uses equity method
Investment in
Records portion of net income & dividends reduce investment account
8
Q
ASPE Diff
A
Jointly controlled operations and jointly controlled assets = Joint operations
Jointly controlled enterprises = Joint venture
9
Q
Contribute asset to joint arrangemtn
A
DR Investment in (FV Asset) CR Asset (Book value) CR Realized gain (Gain x amt don't own ) CR Unrealized gain (Gain x amt of ownership of joint)
