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CA Final · Financial Reporting · Ind AS 111 Joint Arrangements

Kaveri Ltd holds an interest in an arrangement that falls outside the scope of Ind AS 111 because the parties do not have joint control. How should Kaveri Ltd account for its interest, as per Ind AS 111?

If an arrangement is outside the scope of Ind AS 111, the entity accounts for its interest under the relevant Ind ASs, such as Ind AS 110, Ind AS 28 or Ind AS 109, depending on the nature of its interest, and not under Ind AS 111.

  1. AAlways as a joint venture using the equity method under Ind AS 111
  2. BIn accordance with relevant Ind ASs such as Ind AS 110, Ind AS 28 or Ind AS 109Correct
  3. CBy recognising its share of assets and liabilities as a joint operation
  4. DBy not recognising the interest until joint control is obtained

Explanation

The application guidance states 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. Treating it as a joint venture or joint operation would wrongly apply Ind AS 111 to an out-of-scope arrangement.

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