Wiley Practitioner's Guide to GAAP 2022

48ASC 808 COLLABORATIVE ARRANGEMENTS

• Perspective and Issues
  • Overview
  • Subtopic
  • Scope
    • Transactions and Events
    • What Constitutes a Collaborative Arrangement?
    • Criteria for Collaborative Arrangements
    • Timing and Assessment of Involvement
    • Examples of Joint Operating Activities
  • Definitions of Terms
  • Concepts, Rules, and Examples
    • Presentation and Disclosure
    • Determining the Applicability of ASC 808
      • Example of a Collaborative Arrangement

PERSPECTIVE AND ISSUES

Overview

A collaborative arrangement (sometimes referred to in practice as “line‐item” joint ventures or “virtual” joint ventures) is a contractual agreement between two or more parties (participants) to jointly conduct business activities for their mutual benefit without the formation of a separate entity in which to conduct the activities.

Determining the proper accounting treatment for the various activities included in these endeavors is the subject of ASC 808, Collaborative Arrangements.

Subtopic

ASC 808‐10, Collaborative Arrangements, contains one subtopic:

• ASC 808‐10, Overall, which defines collaborative arrangements and gives reporting requirements.

Scope

Transactions and EventsASC 808‐10 applies to all collaborative arrangements, except for those addressed in other topics. (ASC 808‐10‐15‐3)

A collaborative arrangement is an arrangement that is not primarily conducted through a separate legal entity created for it. If a part of the arrangement is conducted through a legal entity, that part is accounted ...