IAS 31 Interest in Joint Ventures

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This Standard shall be applied in accounting for interests in joint ventures and the reporting of joint venture

assets, liabilities, income and expenses in the financial statements of venturers and investors, regardless of the

structures or forms under which the joint venture activities take place. However, it does not apply to venturers’

interests in jointly controlled entities held by:

(a) venture capital organisations, or

(b) mutual funds, unit trusts and similar entities including investment-linked insurance funds

that are measured at fair value through profit or loss in accordance with IFRS 9 Financial Instruments.

A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that

is subject to joint control. Joint control is the contractually agreed sharing of control over an economic

activity, and exists only when the strategic financial and operating decisions relating to the activity require the

unanimous consent of the parties sharing control (the venturers). Control is the power to govern the financial

and operating policies of an economic activity so as to obtain benefits from it.

A venturer is a party to a joint venture and has joint control over that joint venture.

Joint ventures take many different forms and structures. This Standard identifies three broad types—jointly

controlled operations, jointly controlled assets and jointly controlled entities—that are commonly described as,

and meet the definition of, joint ventures.

Jointly controlled operations

The operation of some joint ventures involves the use of the assets and other resources of the venturers rather

than the establishment of a corporation, partnership or other entity, or a financial structure that is separate from

the venturers themselves. Each venturer uses its own property, plant and equipment and carries its own

inventories. It also incurs its own expenses and liabilities and raises its own finance, which represent its own


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