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Adjustment : ejoy entered into a joint agreement with another company on 31 May 2006 , which met the IFRS 11 definition of a joint venture.The joint venture is a limited company and ejoy has contributed assets at fair value of 20m (carrying value 14m).Each party hold five million ordinary shares of 1 in the joint venture.The gain on disposal of the assets (6m) to the joint venture has been included in ‘other income’.
How are we going to treat it in the consolidated statement of profit and loss?
Equity accounting – like you would for an associate company
Share of this year’s joint venture, adjusted, time apportioned profit after tax shown as a pre-tax item
Need to remove Ejoy’s share of the unrealised profit on the transfer of the TNCA into the venture
Can you please briefly explain about removal of ejoy’s share of gain ?I didnt get it.
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