IAS 31 Interests in Joint Ventures and IFRS 11 Joint Arrangements
In May 2011, the IASB issued IFRS 11 “Joint Arrangements.” The new standard has to be applied in the financial statements as at Dec 31, 2013 (if the entity's reporting periods start on Jan 01 and end on Dec 31). Earlier application is permitted by the IASB (IFRS 11.C1). However, in the European Union, new IFRSs have to be endorsed by the European Union before they can be applied. There has been no endorsement with regard to IFRS 11 as yet.
If an entity decides not to apply IFRS 11 early, the rules of IAS 31 “Interests in Joint Ventures” have to be applied. Consequently, the remainder of this chapter of the book discusses both standards:
2 IAS 31 “INTERESTS IN JOINT VENTURES”
2.1 The Term “Joint Venture” and Forms of Joint Ventures
The following characteristics are common to all joint ventures (IAS 31.3 and 31.7):
Joint control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control (the venturers). A venturer is a party to a joint venture which has joint control over that joint venture (IAS 31.3).
IAS 31 sets out ...