IFRS For Dummies

Chapter 13

Juggling Joint Ventures

In This Chapter

Pinning down the definition of a joint venture

Handling the accounting

Knowing about changes that are on the way

Seeing how to present the information correctly

A joint venture is an economic arrangement between two (or more) parties. Both parties need give unanimous consent to decisions concerning the financial and operating policies of the joint venture. Many companies have joint ventures with other companies or individuals. Companies need to account for these joint ventures, like anything else. In this chapter, I cover the IAS dedicated to the issues related to joint ventures: IAS 31 Interests in Joint Ventures.

Understanding a Joint Venture

Before you can dive in to accounting for joint ventures, you need a good grounding in what exactly a joint venture is according to IAS 31, why parties engage in joint ventures and who has the power to control the joint venture. This section lays the foundations for a good understanding of the joint venture.

Looking at how IAS 31 defines a joint venture

IAS 31 recognises that a joint venture ...