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CMA Final · Corporate Financial Reporting · Consolidated Financial Statements and Separate Financial Statements

Delta Ltd and Eta Ltd share joint control of an arrangement. Under Ind AS 28, which description best fits the term 'joint arrangement'?

A joint arrangement is an arrangement of which two or more parties have joint control. Delta Ltd and Eta Ltd sharing joint control therefore have a joint arrangement. Sole control by one party describes a parent-subsidiary relationship, not a joint arrangement.

  1. AAn arrangement of which two or more parties have joint controlCorrect
  2. BAn arrangement in which one party alone controls the investee
  3. CAn arrangement where the investor holds only a passive stake without any rights
  4. DAn arrangement existing only between a parent and its wholly owned subsidiary

Explanation

Ind AS 28 defines a joint arrangement as an arrangement of which two or more parties have joint control. Sole control by one party is the parent-subsidiary relationship instead, so it does not fit.

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