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CA Final · Financial Reporting · Ind AS 111 Joint Arrangements

Orchid Pharma Ltd holds an interest in an arrangement that, after analysis, is found to be outside the scope of Ind AS 111 because no joint control exists. How should Orchid account for its interest in that arrangement?

Orchid should account for the interest under the relevant Ind AS, such as Ind AS 110, Ind AS 28 or Ind AS 109, depending on the control or influence it has. Ind AS 111 does not apply because the arrangement is outside its scope.

  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. CUnder Ind AS 111 as a joint venture using the equity method
  4. DUnder Ind AS 37 as a contingent asset

Explanation

The application guidance in Ind AS 111 says that when an arrangement is outside its scope, the entity accounts for its interest under the relevant Ind AS, such as Ind AS 110, Ind AS 28 or Ind AS 109. Treating it under Ind AS 111 would be wrong because the Standard does not apply.

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