- August 25, 2022 at 9:26 am #664227ArtemMember
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Could you please help to understand the accounting treatment for joint ventures related to Amundsen Co.
The scenario mentioned: Amundsen Co is planning to invest the cash raised from the bank loan in a new retail and leisure park which is being developed jointly with another company, Lazarev Co. All key decisions about the new retail and leisure park will require the unanimous consent of Amundsen Co and Lazarev Co.
It later seems that Amundsen Co included share of financial results and assets within the the prospective financial information.
Please see from 17:00
The question is why the company did not account for the joint venture under equity method?
It seems that it contributed to establishing a legal entity (separate vehicle).
ArtemAugust 25, 2022 at 11:33 am #664238Kim SmithKeymaster
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It would be equity accounted – “share of revenues and costs” = profit share
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