Joint Operations and Joint Ventures Accounting
24 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What type of joint arrangement is presented in the case of Entity C?

  • Partnership
  • Subsidiary
  • Joint Venture (correct)
  • Joint Operation
  • The investment in Entity C by Entity A will be reported at its historical cost on December 31, 2022.

    False (B)

    What is the balance of Investment in Entity C to be reported by Entity A in its Statement of Financial Position on December 31, 2022?

    200,000 - 100,000 = 100,000

    Bohemian Company has a ______________ interest in the joint venture, Bridge Limited.

    <p>one-third</p> Signup and view all the answers

    What is the main activity of Bridge Limited?

    <p>Construction of bridges spanning motorways (D)</p> Signup and view all the answers

    Bohemian Company is required to disclose the financial information of Bridge Limited in its financial statements.

    <p>True (A)</p> Signup and view all the answers

    Match the financial items with their respective amounts in Bridge Limited's financial statements:

    <p>Non-current assets = 30,000 Current assets = 6,000 Revenue = 8,000 Profit = 2,700</p> Signup and view all the answers

    What is the net interest of Bohemian Company in the joint venture, Bridge Limited?

    <p>6,000 / 3 = 2,000</p> Signup and view all the answers

    What does a joint operator recognize in relation to its interest in a joint operation?

    <p>Its assets, liabilities, revenues, and expenses (C)</p> Signup and view all the answers

    The acquirer of an interest in a joint operation is required to apply all of the principles on business combinations accounting in IFRS 3 and other IFRSs without exception.

    <p>False (B)</p> Signup and view all the answers

    What is the effective date of the amendments introduced by Accounting for Acquisitions of Interests in Joint Operations?

    <p>Annual periods beginning on or after 1 January 2016</p> Signup and view all the answers

    A joint operator accounts for the assets, liabilities, revenues, and expenses relating to its involvement in a joint operation in accordance with the relevant _______________________.

    <p>IFRSs</p> Signup and view all the answers

    What is the accounting treatment for the acquisition of an additional interest in a joint operation?

    <p>Previously held interests are not remeasured (A)</p> Signup and view all the answers

    Match the following terms with their corresponding descriptions:

    <p>Joint Operation = A joint operation is where two or more parties have a joint interest in a project or activity. Joint Venture = Not applicable in this context Equity Method = Not applicable in this context</p> Signup and view all the answers

    A joint operator recognizes only its revenue from the sale of its share of the output of the joint operation.

    <p>False (B)</p> Signup and view all the answers

    A joint operator recognizes its _______________________ from the sale of its share of the output of the joint operation.

    <p>revenue</p> Signup and view all the answers

    A party that participates in a joint operation shall account for its interest in the arrangement in accordance with which method?

    <p>Above method (D)</p> Signup and view all the answers

    A joint venturer recognizes its interest in a joint venture as an investment and shall account for that investment using the Financial Instruments method.

    <p>False (B)</p> Signup and view all the answers

    What standard outlines the disclosures required for interests in other entities?

    <p>IFRS 12 Disclosure of Interests in Other Entities</p> Signup and view all the answers

    A party that participates in, but does not have joint control of, a joint venture accounts for its interest in the arrangement in accordance with __________ unless it has significant influence over the joint venture.

    <p>IFRS 9 Financial Instruments</p> Signup and view all the answers

    What is disclosed by an entity about significant judgements and assumptions it has made?

    <p>Information about significant judgements and assumptions it has made in determining control, joint control, or significant influence (C)</p> Signup and view all the answers

    An entity shall disclose information that enables users of its financial statements to evaluate the investments in associates and joint ventures only.

    <p>False (B)</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Joint Operation = Joint Venture</p> Signup and view all the answers

    A party that participates in, but does not have joint control of, a joint operation shall also account for its interest in the arrangement in accordance with the above method if that party has __________ to the assets, and obligations for the liabilities, relating to the joint operation.

    <p>rights</p> Signup and view all the answers

    Study Notes

    Joint Operations and Joint Ventures

    • A party that participates in, but does not have joint control of, a joint operation accounts for its interest in the arrangement in accordance with IFRSs, recognizing its rights to assets and obligations for liabilities.
    • A joint venturer recognizes its interest in a joint venture as an investment and accounts for it using the equity method in accordance with IAS 28 unless exempted or has significant influence.

    Disclosure Requirements

    • IFRS 12 outlines disclosure requirements, including significant judgements and assumptions made in determining:
      • Control of another entity
      • Joint control of an arrangement or significant influence over another entity
      • Type of joint arrangement (joint operation or joint venture)

    Financial Statements of Parties to a Joint Arrangement

    • Joint operations:
      • A joint operator recognizes its interest in a joint operation by accounting for its share of assets, liabilities, revenue, and expenses.
      • The acquirer of an interest in a joint operation applies business combinations accounting in IFRS 3, with exceptions.
    • Joint ventures:
      • A joint venturer accounts for its interest in the arrangement in accordance with IFRS 9, unless it has significant influence, in which case it accounts for it in accordance with IAS 28.

    Examples and Case Studies

    • Entity C's two-year operation:
      • The type of joint arrangement presented is a joint operation.
      • The balance of Investment in Entity C to be reported by Entity A in its Statement of Financial Position on December 31, 2022, is 200,000.
    • Bohemian Company's joint venture, Bridge Limited:
      • Bohemian's net interest in the joint venture is one-third (1/3).
      • The joint venture's assets, liabilities, revenue, and profit are disclosed.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    Joint Arrangement PDF

    Description

    This quiz covers the accounting treatment of joint operations and joint ventures, including recognition and measurement of interests and application of the equity method.

    More Like This

    Use Quizgecko on...
    Browser
    Browser