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CA Final · Financial Reporting · Ind AS 111 Joint Arrangements

Kiran Infra Ltd holds a 30% interest in an arrangement in which it has no joint control and only significant influence. Which accounting treatment applies, given that the arrangement is outside the scope of Ind AS 111?

If an arrangement lacks joint control and so falls outside Ind AS 111, the entity accounts for its interest under other relevant Ind ASs, such as Ind AS 110, Ind AS 28 or Ind AS 109, depending on the nature of the interest held.

  1. AAccount under Ind AS 111 using proportionate consolidation
  2. BAccount under relevant Ind ASs such as Ind AS 110, Ind AS 28 or Ind AS 109, according to the nature of the interestCorrect
  3. CAlways account as a joint venture using the equity method under Ind AS 111
  4. DIgnore the interest until the arrangement is wound up

Explanation

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. With only significant influence, Ind AS 28 would typically apply. Applying Ind AS 111 is wrong because there is no joint control.

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