Where would you show Joint Operation and Joint Venture in the SOFP and SOCI
What are the calculations?
Nowadays, we treat them under the principle of equity accounting so the calculations will be the same as those for an Associate company
Just to confirm that we need to treat both Joint Operation and Joint Venture under equity accounting?
No, sorry if I gave that answer. A joint operation is treated within the individual records of each of the venturers …. and is unlikely to be asked because of that fact! Graham Holt COULD ask you about how to treat it, but it really cannot be a computational question.
A joint venture will be treated in the same way as an associate ie equity accounting will be applied and the benchmark treatment of proportional consolidation has disappeared
Sorry if I misled you
Am i right in saying that a joint operation is not a sepearat legal entity and the assets and liabilities are shared, whereas a joint venture is a separate legal entity and therefore we apply equity accounting just as we do with an associate.
That seems about right to me
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