International GAAP 2013: Generally Accepted Accounting Principles under International Financial Reporting Standards

Chapter 13

Joint ventures (IAS 31)

1 Introduction

1.1 The nature of joint ventures

1.2 Development of IAS 31

2 Scope of IAS 31

2.1 Exemption for venture capital organisations and similar entities

2.2 Definition of ‘joint venture’ and related terms

2.2.1 ‘Venturer’ versus ‘investor’

2.2.2 Joint control

2.2.2.A Contractual arrangement

2.2.2.B Legal and other restrictions on investee

2.2.2.C Potential voting rights

2.3 Requirement to apply IAS 31 to jointly controlled entities

2.4 Separate financial statements

2.4.1 Impairment of interests in jointly controlled entities in a venturer’s separate financial statements

2.5 ‘Pseudo’ joint ventures

3 Jointly controlled operations

4 Jointly controlled assets

5 Jointly controlled entities

5.1 Definition

5.2 Accounting treatment – summary

5.2.1 Difference between allowed treatments

5.2.1.A Loss-making joint ventures

5.2.1.B Capitalisation of borrowing costs

5.2.1.C Hedging of the joint ventures

5.2.1.D Impairment of a jointly controlled entity

5.2.1.E Acquisition of a jointly controlled entity

5.2.2 Consistency of treatment

5.3 Proportionate consolidation

5.4 Equity method

5.5 Date of commencement of accounting for a jointly controlled entity

5.5.1 Jointly controlled entity previously accounted for under IFRS 5

5.6 Accounting for the acquisition of an interest in a jointly controlled entity

5.6.1 Venturers applying the equity method

5.6.2 Venturers applying proportionate consolidation

5.6.3 Retained interest in a jointly controlled entity ...