Financial Reporting · Ind AS 111 Joint Arrangements

Scope and Definitions under Ind AS 111 Joint Arrangements

Updated 5 October 2026

Ind AS 111 applies to all entities that are a party to a joint arrangement. A joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the contractually agreed sharing of control, where decisions on relevant activities need unanimous consent of the parties sharing control. Solve questions by testing contract, control, then unanimity.

Understand Scope and Definitions under Ind AS 111

Ind AS 111 tells you how to account for arrangements that two or more parties run together. Think of a joint project between two companies. Neither one can decide alone. The standard first asks: is this really a joint arrangement? Only then does it ask what type it is.

A joint arrangement is an arrangement of which two or more parties have joint control. It has two features. The parties are bound by a contractual arrangement, and the contract gives two or more of those parties joint control.

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 share control. Relevant activities are the activities that significantly affect the returns of the arrangement. To judge this, you first decide whether the parties collectively control the arrangement, using the control concept of Ind AS 110. Then you check whether unanimous consent is needed among those parties.

A party can be in a joint arrangement without having joint control. The terms joint operator and joint venturer apply only to parties with joint control. Which term applies depends on whether the arrangement is a joint operation or a joint venture. A joint operator is a party to a joint operation that has joint control of that joint operation. A joint venturer is a party to a joint venture that has joint control of that joint venture. A party that takes part in a joint arrangement but does not have joint control is neither.

Ind AS 111 also tells that party how to account for its interest. In a joint operation, if it has rights to assets and obligations for liabilities, it accounts for its share of the assets, liabilities, revenue and expenses. Otherwise it applies the Ind AS applicable to that interest. In a joint venture, it applies Ind AS 109. If it has significant influence, it applies Ind AS 28 instead, which uses the equity method.

The contract is usually a written agreement, but it can also arise from the articles, bylaws or other documents, or from statutory mechanisms. The contract normally sets the purpose, activities, how directors are appointed, decision-making, voting rights and capital contributions. Unanimity does not mean every investor must agree. It concerns the parties with joint control: all of them must agree, and no one of them can decide alone. Joint control exists where the parties collectively control the arrangement and the minimum proportion of voting rights needed for a decision can be reached by only one combination of parties, so every party in that combination must agree. If more than one combination of parties can reach it, there is no joint control. Parties outside that group do not need to consent.

This topic is the entry gate. Classification into joint operation or joint venture and the accounting come next.

Key rules to remember

Joint arrangement: Joint arrangement = contractual arrangement + joint control by two or more parties; Both conditions must be met. No contract or no joint control means it is not a joint arrangement.
Joint control test: Joint control = parties collectively control + decisions on relevant activities need unanimous consent of those parties; Apply the Ind AS 110 control concept first, then check unanimity among the parties that share control.
Relevant activities: Relevant activities = activities that significantly affect the returns of the arrangement; Identify these before assessing who decides them.
Joint operator vs joint venturer: Joint operator = party with joint control of a joint operation; Joint venturer = party with joint control of a joint venture; The terms apply only to parties with joint control. Which one applies depends on the type of arrangement. Classification into joint operation or joint venture depends on rights and obligations, covered in a separate topic. A party without joint control is neither.
Joint control vs significant influence: Joint control = shared power to direct relevant activities; Significant influence = power to participate in decisions, without control or joint control; Joint control leads to Ind AS 111; significant influence leads to Ind AS 28.
Scope: Ind AS 111 applies to all entities that are a party to a joint arrangement; This includes a party without joint control. In a joint operation, if it has rights to assets and obligations for liabilities, it accounts for its share of assets, liabilities, revenue and expenses; otherwise it applies the Ind AS applicable to that interest. In a joint venture, it applies Ind AS 109. If it has significant influence, it applies Ind AS 28 instead, which uses the equity method. An investor in an entity that is not a joint arrangement is outside Ind AS 111.

How to solve Scope and Definitions under Ind AS 111 questions

Use this sequence for any scope or definition question on Ind AS 111. Write each step in provision-fact-conclusion form.

1Identify the arrangement and all parties, with their voting rights, capital shares and board seats.
2Check for a contractual arrangement. Look at the agreement, articles or other documents that bind the parties.
3Identify the relevant activities, meaning those that significantly affect the returns.
4Decide whether the parties collectively control the arrangement under the Ind AS 110 control concept.
5Test unanimity. Check whether decisions on relevant activities need the consent of all parties that collectively control. Joint control exists only if the minimum proportion of voting rights needed can be reached by only one combination of parties, so every party in that combination must agree. If more than one combination of parties can reach it, there is no joint control.
6Conclude: if the contract exists and unanimity is needed, it is a joint arrangement. Each party with joint control is a joint operator if the arrangement is a joint operation, or a joint venturer if it is a joint venture. Otherwise it is not a joint arrangement.
7For parties without joint control in a joint arrangement, state how they account for their interest. In a joint operation, if they have rights to assets and obligations for liabilities, they account for their share of assets, liabilities, revenue and expenses. If they do not, they apply the Ind AS applicable to that interest. In a joint venture, they apply Ind AS 109. If significant influence exists, they apply Ind AS 28 instead, which uses the equity method. If the arrangement is not a joint arrangement at all, Ind AS 111 does not apply to any investor in it. Each investor then applies Ind AS 28 if it has significant influence, or otherwise Ind AS 109. Then, if asked, move on to classification.

Quickest way: Contract, control, consent check

When to use it: Use for short MCQs and 3-to-5 mark questions where you must decide quickly whether an arrangement falls under Ind AS 111.

Ask: is there a binding contract? If no, stop. It is not a joint arrangement.
Ask: who decides the relevant activities? Name them.
Ask: does the decision need all controlling parties to agree? If yes, joint control exists.
If one party can decide alone, it controls. Use Ind AS 110.
If parties only take part in decisions but do not control, think Ind AS 28 if significant influence exists.

Common mistakes in Scope and Definitions under Ind AS 111

Treating any shared project or 50:50 holding as a joint arrangement.
Students look at ownership percentages and ignore the contract and decision-making.
Fix: Always test for a contractual arrangement and unanimous consent on relevant activities. Equal ownership alone is not enough.
Saying every party to a joint arrangement is a joint venturer.
The terms joint arrangement and joint venture sound alike.
Fix: A joint venturer is a party with joint control of a joint venture. A joint operator is a party with joint control of a joint operation. A party without joint control is neither.
Confusing joint control with significant influence.
Both involve a say in decisions.
Fix: Joint control is shared control needing unanimous consent. Significant influence is only the power to participate, without control or joint control. They lead to Ind AS 111 and Ind AS 28 respectively.
Assuming unanimity means every investor must agree.
The word unanimous is read literally across all investors.
Fix: It concerns the parties that share control. They must all agree. Check which parties are needed to reach the required voting threshold. Joint control exists where the parties collectively control and the minimum proportion of voting rights needed can be reached by only one combination of parties, so every party in that combination must agree. If more than one combination can reach it, there is no joint control.
Skipping the control assessment under Ind AS 110.
Students jump straight to the joint control definition.
Fix: First ask whether the parties collectively control. If one party alone controls, it is a subsidiary case, not a joint arrangement. Then check the other holders for significant influence, as a holding of 20% or more of the voting power presumes it, unless clearly demonstrated otherwise.
Ignoring the contractual arrangement because there is no written agreement title.
Students look only for a document called a joint venture agreement.
Fix: The contract can sit in articles, bylaws or other documents. Read the facts for the decision-making terms.

Worked examples

Example 1

A Ltd and B Ltd each hold 50% of the voting rights of C Ltd. Under a shareholders' agreement, decisions on budget, key appointments and capital expenditure, which are the relevant activities, need the approval of both A and B. Is C Ltd a joint arrangement under Ind AS 111? What is the position of A and B?

Show the solution

Provision: A joint arrangement needs a contractual arrangement and joint control by two or more parties. Joint control needs unanimous consent on relevant activities.
Fact: A shareholders' agreement binds A and B, so a contractual arrangement exists.
Fact: Budget, appointments and capex significantly affect returns, so they are relevant activities.
Fact: Both A and B must approve these decisions, so neither can act alone and they collectively control C Ltd.
Conclusion: C Ltd is a joint arrangement. A and B each have joint control, so each is a joint operator or joint venturer, depending on classification.

Answer: C Ltd is a joint arrangement. Both A and B have joint control and are parties with joint control (joint operator or joint venturer, depending on classification).

Example 2

P Ltd holds 60% of the voting rights in Q Ltd, Z Ltd holds 25% and Y Ltd holds 15%. Relevant activities are decided by a simple majority of votes. There is a contractual agreement among the three. Is Q Ltd a joint arrangement? What is Z Ltd's position?

Show the solution

Provision: Joint control needs unanimous consent of the parties that collectively control. If one party can decide alone, it has control.
Fact: Relevant activities are decided by simple majority. P Ltd holds 60%, which is more than half.
Fact: P Ltd can decide alone, without Z Ltd or Y Ltd. Z Ltd and Y Ltd cannot block it.
Conclusion: P Ltd controls Q Ltd under Ind AS 110. There is no joint control, so Q Ltd is not a joint arrangement and Ind AS 111 does not apply to it.
Z Ltd is not a party to a joint arrangement. It is an ordinary investor in an entity controlled by P Ltd, so it is outside Ind AS 111 and is neither a joint operator nor a joint venturer.
Z Ltd's 25% holding is 20% or more of the voting power, so it is presumed to have significant influence, unless it can be clearly demonstrated otherwise. So Z Ltd applies Ind AS 28 and uses the equity method. If the presumption is rebutted, it applies Ind AS 109.

Answer: Q Ltd is not a joint arrangement because P Ltd alone controls it. Z Ltd is an ordinary investor in a controlled entity, outside Ind AS 111. Its 25% holding presumes significant influence, so it accounts under Ind AS 28 unless it clearly shows otherwise, in which case Ind AS 109 applies.

Exam tips

Write the answer in provision-fact-conclusion form. Quote the two-part definition of joint arrangement first.
In case MCQs, scan for the decision-making rule. Unanimous consent points to joint control. A simple majority held by one party points to control.
For difference questions, use a two-column mental list: control, joint control, significant influence, with the standard for each.
Do not skip the contractual arrangement. Examiners often hide a case where no contract exists.
Name the party correctly as joint operator or joint venturer only after classification, or say it has joint control if classification is not asked.

Practice questions from Ind AS 111 Joint Arrangements

Scope and Definitions under Ind AS 111: frequently asked questions

What is joint control under Ind AS 111?

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 sharing control.

What is the difference between joint control and significant influence?

Joint control is shared control where the controlling parties must all agree on relevant activities. Significant influence is only the power to take part in financial and operating policy decisions, without control or joint control. Joint control falls under Ind AS 111 and significant influence under Ind AS 28.

Is a contractual arrangement compulsory for a joint arrangement?

Yes. The parties must be bound by a contractual arrangement. It may be a written agreement or arise from articles, bylaws or other documents.

Who is a joint operator and who is a joint venturer?

A joint operator is a party to a joint operation that has joint control of it. A joint venturer is a party to a joint venture that has joint control of it. Which term applies depends on how the arrangement is classified. A party without joint control is neither.