Skip to content

CA Final · Financial Reporting · Ind AS 111 Joint Arrangements

Kaveri Textiles Ltd holds a 50% interest in an arrangement that its advisers have concluded is outside the scope of Ind AS 111 because no joint control exists. Which treatment follows from Ind AS 111?

Kaveri should account 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. Ind AS 111 does not apply, because the arrangement is outside its scope.

  1. AApply proportionate consolidation under Ind AS 111 regardless of scope
  2. BAccount for the interest under relevant Ind ASs such as Ind AS 110, Ind AS 28 or Ind AS 109Correct
  3. CIgnore the interest and disclose it only in the notes
  4. DAccount for it only as a joint operation until the arrangement ends

Explanation

Ind AS 111 application guidance says that when an arrangement is outside its scope, the entity accounts for its interest in accordance with relevant Ind ASs such as Ind AS 110, Ind AS 28 or Ind AS 109. Applying Ind AS 111 anyway is wrong because the arrangement is outside its scope.

Did you get it right without looking?

One question tells you little. A timed set on Ind AS 111 Joint Arrangements shows your real accuracy, how long you take and where you lose marks.

Practise Ind AS 111 Joint ArrangementsFree diagnostic mock

More Ind AS 111 Joint Arrangements questions