ACCA SBR · Guided practice (Show me how)
Chapter 4: Joint Arrangements (IFRS 11)
A joint operation in the operator's own statements
Chapter 4, Example 1 - Joint operation. Lyon has a 40% share of a joint operation, a natural gas station. The following information relates to the joint arrangement activities:
- The natural gas station cost $15 million to construct and was completed on 1 January 2015. Its useful life is estimated at 10 years.
- In the year, gas with a direct cost of $22 million was sold for $30 million. Additionally, the joint arrangement incurred operating costs of $1.5 million during the year.
- Assets, liabilities, revenue and costs are apportioned on the basis of the shareholding.
Lyon has only contributed and accounted for its share of the construction cost, paying $6 million. The revenue and costs are receivable and payable by the other joint operator, who settles amounts outstanding with Lyon after the year-end (31 December 2015).
Answer in $000, as the notes do.
Lyon: profit or loss
Show how Lyon would account for its share of the joint operation in its statement of profit or loss for the year ended 31 December 2015.
Lyon: financial position
Show the amounts Lyon would include in its statement of financial position at 31 December 2015 for the joint operation.
Opening this exercise…