Joint Arrangements (PFRS 11)

Question 1

PFRS 11
It is still considered as joint arrangement, even if not all the parties to the agreement have Joint Control. It is sufficient that atleast ___ of the parties share control.

Answer 1

Two. Yes

Question 2

PFRS 11
Types of Joint Arrangement?
Please Define.

Answer 2

1. Joint Operation - have rights to the assets and obligations for the liabs of the arrangement. Called Joint Operators
2. Joint Venture - have rights to the net asset of the arrangement. Venturers

So, it is impt to know the rights to determine whether operation or venture

Question 3

PFRS 11
Explain the method if the arrangement is joint venture.

Answer 3

If the arrangement is Joint Venture, PFRS 11 requires the entity to account for its investment in the Joint Venture using the equity method under PAS 28.

Such as:
Profit or Loss
OCI
Dividends

So may ‘Investment in Joint Venture’ and ‘Income from Joint Veture’ sa entries ng venturer’s book

Question 4

PFRS11
Type of arrangement if with or without separate vehicle?

Answer 4

With - Joint Operation or Venture- again to determine, go to definition.

Without - Matic Joint Operation

Question 5

PFRS11
Joint Operation - Unlimited Liabs (like gen partnership)
Venture - Limited Liabs

Answer 5

Oks

Question 6

PFRS 11
Aspects of Joint Control are as follows:

Answer 6

Contract
Relevant Activities
Unanimous Consent

Question 7

PFRS11
Refer to a separately indentifiable financial structure, including separate legal entities or entities recognised by statute, regardless of whether those entities have legal personality

Answer 7

Separate Vehicle

Question 8

PFRS 11
If no separate vehicle, matic JO na agad. Ibig sabihin non, no books ang JO. Sa books parin ng Joint Operators irerecord yung transactions.

So, explain the entires on the side of Operators.

Ex. A & B. 60:40 respectively

Answer 8

*A’s book: alisin lang sa book nya yung percentage na kay B. Should recognize profit/loss if needed

*same application for B.
*no Investment in Operations account

Question 9

PFRS 11
Explain accounting of sales or contributions of assets to a JO

Answer 9

Whenever, joint operators shall recognize gains ang loss.

If there were reduction to net realizable value assets to be sold or contributed to the joint operation, or of an impairment loss assets, those losses shall be recognized fully by joint operators

Question 10

PFRS11
In JV, diba equity method ginagamit? Upto what amount lang ang max na Investment Loss na dapat irecognize?

Then yung balance dan mapupunta?

Answer 10

Book value of investment account!

Then yung balance mapupunta sa Unrecognized Loss. Na ipang ooffset pag nagka income sa following year!

Please Take Note That!