Académique Documents
Professionnel Documents
Culture Documents
The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation.
IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
A and B (the parties) are two companies in the construction industry. Contractual arrangement to work together for the purpose of fulfilling a contract with a government for the design and construction of a road between two cities. The contractual arrangement establishes joint control. A and B set up a separate vehicle (Z) through which to conduct the arrangement. The main feature of entity Zs legal form is that the parties, not entity Z, have rights to the assets, and obligations for the liabilities, of the entity.
IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Separate vehicles
Legal form Do the parties have rights to the assets and obligations for the liabilities? Yes
Other
No Is the arrangement designed so: a) Its activities primarily aim to provide parties with an output, and (b) It depends on the parties for settling liabilities? No Joint Venture
Yes
Joint Operation
Contractual terms
No Do the parties have contractual rights to the assets, and obligations for the Yes liabilities?
A and B (the parties) set up a separate vehicle (entity H) and a Joint Operating Agreement (JOA) to undertake oil and gas exploration, development and production activities. The main feature of entity Hs legal form is that it causes the separate vehicle to be considered in its own right. The JOA specifies that the rights and obligations arising from the exploration, development and production activities shall be shared (ie the permits, the production obtained, all costs associated with the activities, taxes payable, etc).
IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Separate vehicles
Legal form Do the parties have rights to the assets and obligations for the liabilities? Yes
Other
No Is the arrangement designed so: a) Its activities primarily aim to provide parties with an output, and (b) It depends on the parties for settling liabilities? No Joint Venture
Yes
Joint Operation
Contractual terms
No Do the parties have contractual rights to the assets, and obligations for the Yes liabilities?
Contractual rights? Specifies that rights and obligations shall be shared by the parties Link to the objective of a joint operationassets and liabilities that rightly belong on the entitys statement of financial position must be recognised Likely to be a joint operation
10
Separate vehicles
Legal form Do the parties have rights to the assets and obligations for the liabilities? Yes
11
Other
No Is the arrangement designed so: a) Its activities primarily aim to provide parties with an output, and (b) It depends on the parties for settling liabilities? No Joint Venture
Yes
Joint Operation
Contractual terms
No Do the parties have contractual rights to the assets, and obligations for the Yes liabilities?
12
13
14
Separate vehicles
Legal form Do the parties have rights to the assets and obligations for the liabilities? Yes
15
Other
No Is the arrangement designed so: a) Its activities primarily aim to provide parties with an output, and (b) It depends on the parties for settling liabilities? No Joint Venture
Yes
Joint Operation
Contractual terms
No Do the parties have contractual rights to the assets, and obligations for the Yes liabilities?
16
Agreement provides rights to underlying assets and obligation for underlying liabilities
Agreement requires entities to buy production at cost: Risk is carried by partieshave to pay production cost Therefore, vehicle wont be profitable If lossesrisk borne by entities Likely to be a joint operation
IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
17
Question 1: Which of the following provide evidence to support the existence of significant influence by an investor?
a. representation on board of directors? b. material transactions between the investor and the investee? c. interchange of managerial personnel? d. provision of essential technical info? e. all of the above?
18
Question 1: Which of the following provide evidence to support the existence of significant influence by an investor?
a. representation on board of directors? b. material transactions between the investor and the investee? c. interchange of managerial personnel? d. provision of essential technical info? e. all of the above?
19
Question 2: An investor (that uses full IFRSs) in a joint venture has joint control accounts for that investment using the equity method unless:
a. Investor is a parent and the scope exemption in paragraph 4(a) of IFRS 10 b. A venture capital organisation or similar entity can elect to measure its investments in associates or joint ventures at fair value through profit or loss in accordance with IFRS 9. c. Both a. and b.
IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
20
Question 2: An investor (that uses full IFRSs) in a joint venture has joint control accounts for that investment using the equity method unless:
a. Investor is a parent and the scope exemption in paragraph 4(a) of IFRS 10 b. A venture capital organisation or similar entity can elect to measure its investments in associates or joint ventures at fair value through profit or loss in accordance with IFRS 9. c. Both a. and b.
IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK. www.ifrs.org
Questions or comments?
Expressions of individual views by members of the IASB and its staff are encouraged. The views expressed in this presentation are those of the presenter. Official positions of the IASB on accounting matters are determined only after extensive due process and deliberation.
21
22
The requirements are set out in International Financial Reporting Standards (IFRSs), as issued by the IASB at 1 January 2012 with an effective date after 1 January 2012 but not the IFRSs they will replace. The IFRS Foundation, the authors, the presenters and the publishers do not accept responsibility for loss caused to any person who acts or refrains from acting in reliance on the material in this PowerPoint presentation, whether such loss is caused by negligence or otherwise.
2011 IFRS Foundation | 30 Cannon Street | London EC4M 6XH | EC4M UK. www.ifrs.org IFRS Foundation | 30 Cannon Street | London 6XH | UK | www.ifrs.org