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iGAAP Alert: May 2011

IASB issues new standard on joint arrangements

iGAAP Alert: November 2010


IFRS 11 does not amend the concept of the joint control but provides a new classification of joint arrangements, as well as new accounting requirements.

Parties’ rights and obligations become a basis for classification of whether the joint arrangement is a joint operation or a joint venture, rather than the existence of a separate entity. The two new types of joint arrangements are:

  • joint operations – when parties have separately rights to the assets and obligations for the liabilities; and
  • joint ventures – when parties have rights to the net assets of the arrangement. 

Accounting for interests in joint arrangements has also been changed:

  • interests in joint operations – a joint operator recognises its share of the assets, liabilities, revenues and expenses; and
  • interests in joint ventures – the equity method of accounting is the only allowed method for a joint venturer. The proportionate consolidation method has been eliminated.


Download IASB issues new standard on joint arrangements (PDF)

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