IFRS 11 Joint Arrangements
IFRS 11 establishes principles for financial reporting by entities that have an interest in arrangements that are controlled jointly also referred to as joint arrangements. The contractually agreed sharing of control and net assets and obligations must be declared.
A joint arrangement is an arrangement of which two or more parties have joint control. Joint control is when multiple parties agree to share control of an arrangement. This only happens when decisions about important activities that impact the arrangement's returns need the unanimous agreement of all parties involved. Therefore, it requires the contractually agreed sharing of control to be disclosed and require the unanimous consent of parties sharing ownership.
Standard history
In April 2001 the International Accounting Standards Board (Board) adopted IAS 31 Financial Reporting of Interests in Joint Ventures, which had originally been issued by the International Accounting Standards Committee in December 1990.
In December 2003 the Board amended and renamed IAS 31 with a new title—Interests in Joint Ventures. This amendment was done in conjunction with amendments to IAS 27 Consolidated Financial Statements and Accounting for Investments in Subsidiaries and IAS 28 Accounting for Investments in Associates.
In May 2011 the Board issued IFRS 11 Joint Arrangements to replace IAS 31. IFRS 12 Disclosure of Interests in Other Entities, also issued in May 2011, replaced the disclosure requirements in IAS 31. IFRS 11 incorporated the guidance contained in a related Interpretation (SIC‑13 Jointly Controlled Entities‑Non‑Monetary Contributions by Venturers).
In June 2012 IFRS 11 was amended by Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12). These amendments provided additional transition relief to IFRS 11, limiting the requirement to present adjusted comparative information to only the annual period immediately preceding the first annual period for which IFRS 11 is applied.
In May 2014 the Board amended IFRS 11 to provide guidance on the accounting for acquisitions of interests in joint operations in which the activity constitutes a business.
Other Standards have made minor amendments to IFRS 11, including Annual Improvements to IFRS Standards 2015–2017 Cycle (issued December 2017).
Source: IFRS.org
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