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SUMMARY

IFRS 11 Joint Arrangements

Overview

IFRS 11 describes the accounting for a joint arrangement. The investor will be required to either apply the

equity method of accounting or recognize, on a line-by-line basis, its share of the underlying assets,

liabilities, revenues and expenses. The accounting treatment required will depend on the substance of the

arrangement and the nature of the investor’s interest in it. The option to apply proportionate consolidation

has been removed. IFRS 11 supersedes the requirements relating to joint ventures in IAS 31 and SIC 13.

Objective

To establish principles for financial reporting by entities that have an interest in arrangements that are

controlled jointly (i.e. joint arrangements).

Scope

All entities that are a party to a joint arrangement.

Effective date

Effective for annual periods beginning on or after 1 January 2013. Early applicaiton is permitted.

Defined terms

IFRS 11 defines the following terms that form an integral part of this IFRS.

Joint arrangement – An arrangement of which two or more parties have joint control.

Joint control – The contractually agreed sharing of control of an arrangement, which exists only when

decisions about the relevant activities require the unanimous consent of the parties sharing control.

Joint operation – A joint arrangement whereby the parties that have joint control of the arrangement have

rights to the assets, and obligations for the liabilities, relating to the arrangement.

Joint operator – A party to a joint operation that has joint control of that joint operation.

Joint venture – A joint arrangement whereby the parties that have joint control of the arrangement have

rights to the net assets of the arrangement.

Joint venturer – A party to a joint venture that has joint control of that joint venture.

Party to a joint arrangement – An entity that participates in a joint arrangement, regardless of whether that

entity has joint control of the arrangement.

Separate vehicle – A...