Podcast
Questions and Answers
What type of joint arrangement is presented in the case of Entity C?
What type of joint arrangement is presented in the case of Entity C?
The investment in Entity C by Entity A will be reported at its historical cost on December 31, 2022.
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?
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.
Bohemian Company has a ______________ interest in the joint venture, Bridge Limited.
Signup and view all the answers
What is the main activity of Bridge Limited?
What is the main activity of Bridge Limited?
Signup and view all the answers
Bohemian Company is required to disclose the financial information of Bridge Limited in its financial statements.
Bohemian Company is required to disclose the financial information of Bridge Limited in its financial statements.
Signup and view all the answers
Match the financial items with their respective amounts in Bridge Limited's financial statements:
Match the financial items with their respective amounts in Bridge Limited's financial statements:
Signup and view all the answers
What is the net interest of Bohemian Company in the joint venture, Bridge Limited?
What is the net interest of Bohemian Company in the joint venture, Bridge Limited?
Signup and view all the answers
What does a joint operator recognize in relation to its interest in a joint operation?
What does a joint operator recognize in relation to its interest in a joint operation?
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.
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.
Signup and view all the answers
What is the effective date of the amendments introduced by Accounting for Acquisitions of Interests in Joint Operations?
What is the effective date of the amendments introduced by Accounting for Acquisitions of Interests in Joint Operations?
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 _______________________.
A joint operator accounts for the assets, liabilities, revenues, and expenses relating to its involvement in a joint operation in accordance with the relevant _______________________.
Signup and view all the answers
What is the accounting treatment for the acquisition of an additional interest in a joint operation?
What is the accounting treatment for the acquisition of an additional interest in a joint operation?
Signup and view all the answers
Match the following terms with their corresponding descriptions:
Match the following terms with their corresponding descriptions:
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.
A joint operator recognizes only its revenue from the sale of its share of the output of the joint operation.
Signup and view all the answers
A joint operator recognizes its _______________________ from the sale of its share of the output of the joint operation.
A joint operator recognizes its _______________________ from the sale of its share of the output of the joint operation.
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?
A party that participates in a joint operation shall account for its interest in the arrangement in accordance with which method?
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.
A joint venturer recognizes its interest in a joint venture as an investment and shall account for that investment using the Financial Instruments method.
Signup and view all the answers
What standard outlines the disclosures required for interests in other entities?
What standard outlines the disclosures required for interests in other entities?
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.
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.
Signup and view all the answers
What is disclosed by an entity about significant judgements and assumptions it has made?
What is disclosed by an entity about significant judgements and assumptions it has made?
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.
An entity shall disclose information that enables users of its financial statements to evaluate the investments in associates and joint ventures only.
Signup and view all the answers
Match the following terms with their definitions:
Match the following terms with their definitions:
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.
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.
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.
Related Documents
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.