Financial Reporting · Ind AS 111 Joint Arrangements

Assessing Joint Control under Ind AS 111

Updated 5 October 2026 · Fact-checked

Joint control is the contractually agreed sharing of control of an arrangement. It exists only when decisions about the relevant activities need the unanimous consent of the parties that collectively control it. To assess it, identify the relevant activities, decide whether the parties collectively control them, then test whether unanimous consent is needed.

Understand Assessing Joint Control

Ind AS 111 applies to an arrangement that two or more parties jointly control. An arrangement is one where the parties are bound by a contract or similar agreement. So joint control starts with an enforceable arrangement, not with a shareholding percentage.

Joint control is the contractually agreed sharing of control. It exists only when decisions about the relevant activities need the unanimous consent of the parties that share control. Relevant activities are those that significantly affect the returns of the arrangement, such as selling, buying, operating, financing or appointing key management.

The test has two layers. First, ask whether the parties, acting together, control the arrangement. Use the control concept of Ind AS 110: power over the relevant activities, exposure to variable returns and the ability to use power to affect returns. Second, ask whether decisions on those activities need the consent of all the parties (or a group of them) that collectively control it.

Not every party to an arrangement has joint control. A party can be in the arrangement but only have protective rights or no say in the key decisions. Only the parties with joint control are in the Ind AS 111 classification step (joint operation or joint venture). The others account under the relevant standard, such as Ind AS 109 or Ind AS 28 if they have significant influence.

A majority vote does not automatically defeat joint control. If the required majority is so high that only one combination of parties can reach it, those parties jointly control the arrangement. If more than one combination of parties could reach the majority, there is no joint control, because the parties do not depend on each other. The exception is where the contractual arrangement specifies which parties' consent is required (for example, which parties must agree to relevant decisions). In that case, those specified parties may have joint control even though other combinations could reach the majority.

Key rules to remember

Definition of joint control: Joint control = contractually agreed sharing of control + unanimous consent of the parties sharing control on relevant activities; Both parts are needed. A contract alone is not enough.
Collective control test: Collective control = the parties together have power over relevant activities, exposure to variable returns and ability to use power to affect returns; Applies the Ind AS 110 control concept to the group of parties acting together.
Unanimity test: Joint control exists if no party can take relevant decisions without the others, because the required majority can be reached by only one combination of parties; If more than one combination can reach the required majority, there is no joint control unless the contractual arrangement specifies which parties' consent is required.
Protective rights: Protective rights protect a party's interest but do not give power over relevant activities; Such rights alone do not give control or joint control. Approval of changes in business, share capital changes or liquidation are typically protective rights, but classify each right by whether it gives power over relevant activities. A right that does so is substantive, whatever its label.
Relevant activities: Relevant activities = activities that significantly affect the returns of the arrangement; Where different parties direct different activities, consider which activity most significantly affects returns.

How to solve Assessing Joint Control questions

Use this order for any case on joint control. Write each step as a short heading in your answer.

1Confirm there is an arrangement: check for a contract or similar agreement that binds the parties.
2Identify the relevant activities, the ones that significantly affect returns, and who decides them.
3Read the decision-making terms: voting thresholds, board composition, reserved matters and deadlock clauses.
4Separate protective rights from substantive rights. Classify each right by whether it gives power over relevant activities. Ignore protective rights when judging control.
5Test collective control: do the parties acting together have power over the relevant activities and exposure to variable returns?
6Test unanimity: does every decision on relevant activities need the consent of all the parties that control collectively? If a majority is enough, check whether only one combination of parties can reach it. If more than one can, check whether the contract specifies which parties' consent is required.
7Conclude: which parties have joint control, and which do not. Parties without it fall outside Ind AS 111.
8State the next step: classify the arrangement as a joint operation or a joint venture.

Quickest way: Combination check for voting thresholds

When to use it: Use when the case gives percentage holdings and a required majority for key decisions.

List each party's voting rights.
Find the required majority for relevant-activity decisions, not for protective matters.
Check whether any single party can reach it alone. If yes, that party controls and there is no joint control.
List the combinations of parties that reach the threshold.
If only one minimum combination works (every party in it is needed), those parties have joint control. Any larger group containing them also passes, but it does not change the answer.
If more than one minimum combination works, there is no joint control, unless the contract specifies which parties' consent is required.
Write the conclusion in one line with the reason.

Common mistakes in Assessing Joint Control

Treating any shareholder of a joint arrangement as having joint control.
Students link joint control to holding shares in the entity.
Fix: Joint control needs the contract and unanimous consent on relevant activities. A party with only protective rights has no joint control.
Saying a majority-vote arrangement can never be jointly controlled.
Unanimous consent is read as every party must vote on every decision.
Fix: Check the combinations. If the threshold can be met by only one combination of parties, joint control exists.
Counting protective rights as power over relevant activities.
Veto rights look like control.
Fix: Ask whether the right relates to relevant activities or only protects the holder's interest, such as approval of fundamental changes or liquidation. Classify each right on whether it gives power over relevant activities.
Concluding joint control when two different combinations of parties can reach the majority.
Students stop once they see a high threshold.
Fix: If A+B or A+C can each decide, no party depends on all others and there is no joint control, unless the contract specifies which parties' consent is required.
Ignoring the relevant activities and testing all decisions.
The case lists many decisions and students treat them equally.
Fix: Identify the activities that most significantly affect returns and test who decides those.
Jumping to classification as joint operation or joint venture before confirming joint control.
The chapter title and exam questions often combine both steps.
Fix: Confirm joint control first. Only then classify under Ind AS 111.

Worked examples

Example 1

A Ltd, B Ltd and C Ltd set up an arrangement under a contract. A holds 40% of the voting rights, B 35% and C 25%. Decisions on relevant activities need approval of at least 75% of the voting rights. The contract does not specify which parties' consent is required. Does any party control it, and is there joint control?

Show the solution

There is a contractual arrangement binding A, B and C.
The threshold is 75%. A alone has 40%, B 35%, C 25%. No party reaches 75% alone, so no party controls it alone.
Check the pairs. A+B = 75%, which meets the threshold. A+C = 65% and B+C = 60%. Both fall short.
So A+B is the only minimum combination that reaches 75%. Any larger group that contains both A and B, such as A+B+C at 100%, also passes, but it adds no new route.
Only one combination of parties can reach the threshold, and C is not needed. A and B each need the other, so they collectively control the arrangement and have joint control.

Answer: A and B have joint control. C does not, because its consent is not needed for relevant decisions. C accounts for its interest under the applicable standard, such as Ind AS 109 or Ind AS 28 if it has significant influence.

Example 2

P Ltd, Q Ltd and R Ltd each hold one-third of the voting rights in an arrangement. Relevant activities need approval of at least 60% of the voting rights. The contract does not specify which parties' consent is required. Each party can also block a change in the nature of the business, which is a fundamental matter and does not give any party power over how the arrangement is operated day to day. Does any party have joint control?

Show the solution

The threshold for relevant activities is 60%. Each party has 33.33%.
Test combinations. P+Q = 66.67%, P+R = 66.67%, Q+R = 66.67%. Each pair meets the 60% threshold.
More than one combination can reach the majority, and the contract does not specify which parties' consent is required. So no party is needed for every decision.
Classify the veto right. It relates to a fundamental change and gives no power over the relevant activities, so it is a protective right.
So no party has control, and the parties do not jointly control, because the consent of all is not needed.

Answer: There is no joint control because any two of the three parties can approve relevant decisions and the contract does not specify whose consent is required. The veto rights are protective and do not change this. Each party accounts for its interest under the applicable standard, such as Ind AS 109 or Ind AS 28 if it has significant influence.

Exam tips

In a case, write the relevant activities first. Marks are often given for this step.
Always do the combination check when a percentage threshold is given, and check whether the contract names the parties whose consent is required.
Name each right as protective or substantive and give one reason based on whether it gives power over relevant activities.
Close every answer with the conclusion and the next step: classify the arrangement if joint control exists, or apply another standard if it does not.
MCQs on this topic usually test one fact: protective rights do not give joint control, or a majority threshold can still give joint control.

Practice questions from Ind AS 111 Joint Arrangements

Assessing Joint Control: frequently asked questions

What does unanimous consent mean in Ind AS 111?

It means decisions on relevant activities need the agreement of all the parties that collectively control the arrangement. It does not mean every party must agree on every decision. Parties without a say in relevant activities are not among those whose consent is needed.

How do I decide joint control when decisions need a majority vote?

List the voting rights and the required majority. If only one combination of parties can reach it, those parties depend on each other and have joint control. If more than one combination can reach it, there is no joint control, unless the contract specifies which parties' consent is required.

Do protective rights create joint control?

No. Protective rights safeguard a party's interest, for example on fundamental changes in business or liquidation, but they do not give power over relevant activities. Ignore them when you test for control or joint control. Check each right on its facts, because a right that gives power over relevant activities is not protective.

What do I do after I find joint control?

Classify the arrangement as a joint operation or a joint venture. This depends on the rights and obligations of the parties, which is the next step in Ind AS 111.