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Note: All the materials in this blog post have been made available to the public for free download by the respective sources. They are compiled here for ease of access to you.
IFRS 11 Joint arrangements is one of those standards that move silently, but carries a lot of impact.
When you buy shares in a company, there is a silent rule that indicates that the percentage of shares you buy in the company determines how you assess your investment in the company. This rule generally categorizes your interest in the company as follows:
| % of shares |
Type of investment |
Applicable standard |
| < 20% |
Ordinary share |
IFRS 9 |
| 20% or <50% |
Associate |
IAS 28 |
| 50% |
Joint venture |
IFRS 11 |
>50%
|
Subsidiary |
IFRS 10 |
However, the above table does not always apply in practice. This is because the fact and circumstance of every agreement differs and needs to be thoroughly analyzed before a conclusion is reached as to the type of investment that has been made.
Imagine a scenario where there are 50 shareholders and 49 of the shareholders collectively own 80% of a company while 1 of the shareholders own 20% of the company. If the 20% held by the shareholder gives that shareholder the right to make decisions over the relevant activities of the company, such right may give the shareholder control over the company (resulting in the company being assessed as a subsidiary to the shareholder) even though mathematically only 20% is held in the company.
IFRS 11 essentially provides a guideline that helps companies to analyze their transactions to determine if a joint control exists and how such joint control should be accounted for.
This blog post compiles for you guidance made available by thought leaders to help you with the learning and understanding of IFRS 11 Joint arrangements.
The below resources provide the key requirements of IFRS 11, including practical guidance, training videos and eLearning. Whether you are new to IFRS 11 or need a refresher, these resources will be helpful.
Click the links below to download them.
IFRS 11 Joint arrangements:IFRS 11 Pdf
Source: BDO
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