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CA Final · Financial Reporting · Ind AS 111 Joint Arrangements

Gamma Ltd holds 30% of an entity, but the contractual terms show that no party has joint control and Gamma has no control either. The arrangement is therefore outside the scope of Ind AS 111. How should Gamma account for its interest, according to Ind AS 111 application guidance?

Gamma should account for its interest under the relevant Ind AS, such as Ind AS 110, Ind AS 28 or Ind AS 109, depending on the facts. Because the arrangement is outside the scope of Ind AS 111, joint arrangement accounting cannot apply to it.

  1. AUnder Ind AS 111 as a joint operation by default
  2. BUnder the relevant Ind AS, such as Ind AS 110, Ind AS 28 or Ind AS 109Correct
  3. COnly under Ind AS 111 using proportionate consolidation
  4. DNot recognised, with disclosure only in the notes

Explanation

Paragraph B11 says that when an arrangement is outside the scope of Ind AS 111, the entity accounts for its interest under relevant Ind ASs such as Ind AS 110, Ind AS 28 or Ind AS 109. Which of them applies depends on the facts, for example control or significant influence. Defaulting to joint operation accounting is wrong because there is no joint control.

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