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CA Final · Financial Reporting · Ind AS 111 Joint Arrangements

Alpha Ltd and Beta Ltd, two Indian companies, sign a contractual arrangement under which they have joint control over a new road-maintenance undertaking. According to Ind AS 111, into which categories can this joint arrangement be classified?

A joint arrangement, being an arrangement in which two or more parties have joint control, is classified as either a joint operation or a joint venture. Subsidiary, associate and financial-asset classifications belong to other standards and are not categories of joint arrangement under Ind AS 111.

  1. AEither a joint operation or a joint ventureCorrect
  2. BEither a subsidiary or an associate
  3. CEither a joint operation or an associate
  4. DEither a joint venture or a financial asset under Ind AS 109

Explanation

Ind AS 111 defines a joint arrangement as an arrangement of which two or more parties have joint control. Paragraph 6 states that a joint arrangement is either a joint operation or a joint venture. Subsidiary and associate are classifications under Ind AS 110 and Ind AS 28, not types of joint arrangement.

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