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CA Final · Financial Reporting · Ind AS 111 Joint Arrangements

Meridian Infra Ltd and Sahyadri Power Ltd have signed a contractual arrangement under which both parties have joint control over a hydro project. Under the classification given in Ind AS 111 for joint arrangements, which of the following statements is correct?

A joint arrangement under Ind AS 111 is either a joint operation or a joint venture. It is defined as an arrangement of which two or more parties have joint control. Significant influence leads to an associate under Ind AS 28 and does not create a joint arrangement.

  1. AA joint arrangement is either a joint operation or a joint ventureCorrect
  2. BA joint arrangement can be a joint operation, a joint venture or an associate
  3. CA joint arrangement is classified as a joint venture only if a separate legal entity is formed
  4. DA joint arrangement exists whenever two or more parties have significant influence

Explanation

Ind AS 111 states that a joint arrangement is either a joint operation or a joint venture. An associate arises under Ind AS 28 from significant influence, not joint control. A separate vehicle does not by itself decide the classification, and significant influence alone does not create a joint arrangement.

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