3
This Standard shall be applied by all entities that are a party to a joint arrangement.
3 This Standard shall be applied by all entities that are a party to a joint arrangement.
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This Act has been repealed and is no longer in force. It is retained for historical reference.
AASB 11 defines how entities must report involvement in joint arrangements—business activities controlled jointly. It requires classifying arrangements as joint operations (parties recognise their share of assets, liabilities, income and expenses) or joint ventures (interests accounted for using the equity method).
It applies to any entity preparing Australian Accounting Standards financial statements. The standard improves transparency of shared risks and prevents hiding liabilities off-balance-sheet.
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Direct links to the current provisions in AASB 11 - Joint Arrangements - August 2011.
3 This Standard shall be applied by all entities that are a party to a joint arrangement.
4 A joint arrangement is an arrangement of which two or more parties have joint control.
5 A joint arrangement has the following characteristics:
(a) The parties are bound by a contractual arrangement (see paragraphs B2–B4).
(b) The contractual arrangement gives two or more of those parties joint control of the arrangement (see paragraphs 7–13).
6 A joint arrangement is either a joint operation or a joint venture.
7 Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
8 An entity that is a party to an arrangement shall assess whether the contractual arrangement gives all the parties, or a group of the parties, control of the arrangement collectively. All the parties, or a group of the parties, control the arrangement collectively when they must act together to direct the activities that significantly affect the returns of the arrangement (ie the relevant activities).
9 Once it has been determined that all the parties, or a group of the parties, control the arrangement collectively, joint control exists only when decisions about the relevant activities require the unanimous consent of the parties that control the arrangement collectively.
10 In a joint arrangement, no single party controls the arrangement on its own. A party with joint control of an arrangement can prevent any of the other parties, or a group of the parties, from controlling the arrangement.
11 An arrangement can be a joint arrangement even though not all of its parties have joint control of the arrangement. This Standard distinguishes between parties that have joint control of a joint arrangement (joint operators or joint venturers) and parties that participate in, but do not have joint control of, a joint arrangement.
12 An entity will need to apply judgement when assessing whether all the parties, or a group of the parties, have joint control of an arrangement. An entity shall make this assessment by considering all facts and circumstances (see paragraphs B5–B11).
13 If facts and circumstances change, an entity shall reassess whether it still has joint control of the arrangement.
14 An entity shall determine the type of joint arrangement in which it is involved. The classification of a joint arrangement as a joint operation or a joint venture depends upon the rights and obligations of the parties to the arrangement.
15 A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Those parties are called joint operators.
16 A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Those parties are called joint venturers.
17 An entity applies judgement when assessing whether a joint arrangement is a joint operation or a joint venture. An entity shall determine the type of joint arrangement in which it is involved by considering its rights and obligations arising from the arrangement. An entity assesses its rights and obligations by considering the structure and legal form of the arrangement, the terms agreed by the parties in the contractual arrangement and, when relevant, other facts and circumstances (see paragraphs B12–B33).
18 Sometimes the parties are bound by a framework agreement that sets up the general contractual terms for undertaking one or more activities. The framework agreement might set out that the parties establish different joint arrangements to deal with specific activities that form part of the agreement. Even though those joint arrangements are related to the same framework agreement, their type might be different if the parties’ rights and obligations differ when undertaking the different activities dealt with in the framework agreement. Consequently, joint operations and joint ventures can coexist when the parties undertake different activities that form part of the same framework agreement.
19 If facts and circumstances change, an entity shall reassess whether the type of joint arrangement in which it is involved has changed.
The Australian Accounting Standards Board made Accounting Standard AASB 11 Joint Arrangements under section 334 of the Corporations Act 2001 on 29 August 2011.
This compiled version of AASB 11 applies to annual reporting periods beginning on or after 1 January 2016. It incorporates relevant amendments contained in other AASB Standards made by the AASB up to and including 28 January 2015 (see Compilation Details).
Joint Arrangements
1 The objective of this Standard is to establish principles for financial reporting by entities that have an interest in arrangements that are controlled jointly (ie joint arrangements).
2 To meet the objective in paragraph 1, this Standard defines joint control and requires an entity that is a party to a joint arrangement to determine the type of joint arrangement in which it is involved by assessing its rights and obligations and to account for those rights and obligations in accordance with that type of joint arrangement.
Aus2.1 This Standard applies to:
(a) each entity that is required to prepare financial reports in accordance with Part 2M.3 of the Corporations Act and that is a reporting entity;
(b) general purpose financial statements of each other reporting entity; and
(c) financial statements that are, or are held out to be, general purpose financial statements.
Aus2.2 This Standard applies to annual reporting periods beginning on or after 1 January 2013, except that for not-for-profit entities it applies to annual reporting periods beginning on or after 1 January 2014.
[Note: For application dates of paragraphs changed or added by an amending Standard, see Compilation Details.]
Aus2.3 This Standard may be applied by:
(a) for-profit entities to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013; and
(b) not-for-profit entities to annual reporting periods beginning on or after 1 January 2013 but before 1 January 2014.
If an entity applies this Standard to such an annual reporting period in accordance with paragraph (a) or (b), it shall disclose that fact and apply AASB 10 Consolidated Financial Statements, AASB 12 Disclosure of Interests in Other Entities, AASB 127 Separate Financial Statements (August 2011) and AASB 128 Investments in Associates and Joint Ventures (August 2011), at the same time.
Aus2.4 [Deleted by the AASB]
Aus2.5 When applied or operative, this Standard supersedes:
(a) AASB 131 Interests in Joint Ventures (July 2004, as amended); and
(b) Interpretation 113 Jointly Controlled Entities – Non-Monetary Contributions by Venturers (July 2004, as amended).
3 This Standard shall be applied by all entities that are a party to a joint arrangement.
4 A joint arrangement is an arrangement of which two or more parties have joint control.
5 A joint arrangement has the following characteristics:
(a) The parties are bound by a contractual arrangement (see paragraphs B2–B4).
(b) The contractual arrangement gives two or more of those parties joint control of the arrangement (see paragraphs 7–13).
6 A joint arrangement is either a joint operation or a joint venture.
7 Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
8 An entity that is a party to an arrangement shall assess whether the contractual arrangement gives all the parties, or a group of the parties, control of the arrangement collectively. All the parties, or a group of the parties, control the arrangement collectively when they must act together to direct the activities that significantly affect the returns of the arrangement (ie the relevant activities).
9 Once it has been determined that all the parties, or a group of the parties, control the arrangement collectively, joint control exists only when decisions about the relevant activities require the unanimous consent of the parties that control the arrangement collectively.
10 In a joint arrangement, no single party controls the arrangement on its own. A party with joint control of an arrangement can prevent any of the other parties, or a group of the parties, from controlling the arrangement.
11 An arrangement can be a joint arrangement even though not all of its parties have joint control of the arrangement. This Standard distinguishes between parties that have joint control of a joint arrangement (joint operators or joint venturers) and parties that participate in, but do not have joint control of, a joint arrangement.
12 An entity will need to apply judgement when assessing whether all the parties, or a group of the parties, have joint control of an arrangement. An entity shall make this assessment by considering all facts and circumstances (see paragraphs B5–B11).
13 If facts and circumstances change, an entity shall reassess whether it still has joint control of the arrangement.
14 An entity shall determine the type of joint arrangement in which it is involved. The classification of a joint arrangement as a joint operation or a joint venture depends upon the rights and obligations of the parties to the arrangement.
15 A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Those parties are called joint operators.
16 A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Those parties are called joint venturers.
17 An entity applies judgement when assessing whether a joint arrangement is a joint operation or a joint venture. An entity shall determine the type of joint arrangement in which it is involved by considering its rights and obligations arising from the arrangement. An entity assesses its rights and obligations by considering the structure and legal form of the arrangement, the terms agreed by the parties in the contractual arrangement and, when relevant, other facts and circumstances (see paragraphs B12–B33).
18 Sometimes the parties are bound by a framework agreement that sets up the general contractual terms for undertaking one or more activities. The framework agreement might set out that the parties establish different joint arrangements to deal with specific activities that form part of the agreement. Even though those joint arrangements are related to the same framework agreement, their type might be different if the parties’ rights and obligations differ when undertaking the different activities dealt with in the framework agreement. Consequently, joint operations and joint ventures can coexist when the parties undertake different activities that form part of the same framework agreement.
19 If facts and circumstances change, an entity shall reassess whether the type of joint arrangement in which it is involved has changed.
20 A joint operator shall recognise in relation to its interest in a joint operation:
(a) its assets, including its share of any assets held jointly;
(b) its liabilities, including its share of any liabilities incurred jointly;
(c) its revenue from the sale of its share of the output arising from the joint operation;
(d) its share of the revenue from the sale of the output by the joint operation; and
(e) its expenses, including its share of any expenses incurred jointly.
21 A joint operator shall account for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the Standards applicable to the particular assets, liabilities, revenues and expenses.
21A When an entity acquires an interest in a joint operation in which the activity of the joint operation constitutes a business, as defined in AASB 3 Business Combinations, it shall apply, to the extent of its share in accordance with paragraph 20, all of the principles on business combinations accounting in AASB 3, and other Australian Accounting Standards, that do not conflict with the guidance in this Standard and disclose the information that is required in those Australian Accounting Standards in relation to business combinations. This applies to the acquisition of both the initial interest and additional interests in a joint operation in which the activity of the joint operation constitutes a business. The accounting for the acquisition of an interest in such a joint operation is specified in paragraphs B33A–B33D.
22 The accounting for transactions such as the sale, contribution or purchase of assets between an entity and a joint operation in which it is a joint operator is specified in paragraphs B34–B37.
23 A party that participates in, but does not have joint control of, a joint operation shall also account for its interest in the arrangement in accordance with paragraphs 20–22 if that party has rights to the assets, and obligations for the liabilities, relating to the joint operation. If a party that participates in, but does not have joint control of, a joint operation does not have rights to the assets, and obligations for the liabilities, relating to that joint operation, it shall account for its interest in the joint operation in accordance with the Standards applicable to that interest.
24 A joint venturer shall recognise its interest in a joint venture as an investment and shall account for that investment using the equity method in accordance with AASB 128 Investments in Associates and Joint Ventures unless the entity is exempted from applying the equity method as specified in that Standard.
25 A party that participates in, but does not have joint control of, a joint venture shall account for its interest in the arrangement in accordance with AASB 9 Financial Instruments, unless it has significant influence over the joint venture, in which case it shall account for it in accordance with AASB 128 (August 2011).
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Compiled versions of Standards, original Standards and amending Standards (see Compilation Details) are available on the AASB website: www.aasb.gov.au.
Printed copies of original Standards and amending Standards are available for purchase by contacting:
| The Customer Service OfficerAustralian Accounting Standards BoardLevel 7600 Bourke StreetMelbourne VictoriaAUSTRALIA | Postal address:PO Box 204Collins Street West Victoria 8007AUSTRALIA |
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| Phone: (03) 9617 7637Fax: (03) 9617 7608E-mail: publications@aasb.gov.auWebsite: www.aasb.gov.au |
Phone: (03) 9617 7600
Fax: (03) 9617 7608
E-mail: standard@aasb.gov.au
COPYRIGHT
© 2015 Commonwealth of Australia
This compiled AASB Standard contains IFRS Foundation copyright material. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Director of Finance and Administration, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.
All existing rights in this material are reserved outside Australia.
Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce for commercial purposes outside Australia should be addressed to the IFRS Foundation at www.ifrs.org.
COMPILATION DETAILS
Comparison with IFRS 11
INTRODUCTION TO IFRS 11
(available on the AASB website)
Accounting Standard
AASB 11 Joint Arrangements
Paragraphs
Objective 1
Meeting the objective 2
Application Aus2.1 – Aus2.5
Scope 3
Joint arrangements 4 – 6
Joint control 7 – 13
Types of joint arrangement 14 – 19
Financial statements of parties to a joint arrangement
Joint operations 20 – 23
Joint ventures 24 – 25
Separate financial statements 26 – 27
Appendices:
A. Defined Terms Page 9
B. Application Guidance B1
Joint arrangements
Contractual arrangement B2 – B4
Joint control B5 – B11
Types of joint arrangement B12 – B14
Classification of a joint arrangement B15 – B33
Accounting for acquisitions of interests in joint operations B33A – B33D
Financial statements of parties to a joint arrangement
Accounting for sales or contributions of assets to a joint operation B34 – B35
Accounting for purchases of assets from a joint operation B36 – B37
C. Effective Date and Transition
Effective date C1A – C1AA
Transition C1B
Joint ventures – transition from proportionate consolidation to the equity method C2 – C6
Joint operations – transition from the equity method to accounting for assets and liabilities C7 – C11
Transition provisions in an entity’s separate financial statements C12 – C13
References to the ‘immediately preceding period’ C13A – C13B
References to AASB 9 C14
Accounting for acquisitions of interests in joint operations C14A
ILLUSTRATIVE EXAMPLES Page 21
DELETED IFRS 11 TEXT Page 30
BASIS FOR CONCLUSIONS ON IFRS 11
(available on the AASB website)
Australian Accounting Standard AASB 11 Joint Arrangements (as amended) is set out in paragraphs 1 – 27 and Appendices A – C. All the paragraphs have equal authority. Paragraphs in bold type state the main principles. Terms defined in Appendix A are in italics the first time they appear in the Standard. AASB 11 is to be read in the context of other Australian Accounting Standards, including AASB 1048 Interpretation of Standards, which identifies the Australian Accounting Interpretations. In the absence of explicit guidance, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies.
This compiled Standard applies to annual reporting periods beginning on or after 1 January 2016. It takes into account amendments up to and including 28 January 2015 and was prepared on 2 April 2015 by the staff of the Australian Accounting Standards Board (AASB).
This compilation is not a separate Accounting Standard made by the AASB. Instead, it is a representation of AASB 11 (August 2011) as amended by other Accounting Standards, which are listed in the Table below.
| Standard | Date made | Application date(annual reporting periods … on or after …) | Application, saving or transitional provisions |
|---|---|---|---|
| AASB 11 | 29 Aug 2011 | (beginning) 1 Jan 2013 | see (a) below |
| AASB 2012-10 | 18 Dec 2012 | (beginning) 1 Jan 2013 | see (b) below |
| AASB 2014-3 | 11 Aug 2014 | (beginning) 1 Jan 2016 | see (c) below |
| AASB 2015-1 | 21 Jan 2015 | (beginning) 1 Jan 2016 | see (d) below |
| AASB 2015-3 | 28 Jan 2015 | (beginning) 1 Jul 2015 | see (e) below |
(a) For-profit entities (but not not-for-profit entities) may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013, provided that certain related Standards are also applied to such periods. This early application provision was subsequently amended by AASB 2012-10.
(b) For-profit entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013. Not-for-profit entities may elect to apply the amendments to AASB 11 in this Standard to annual reporting periods beginning on or after 1 January 2013 but before 1 January 2014.
(c) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2016.
(d) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2016 only as set out in paragraph Aus2.3 of AASB 11.
(e) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2014 but before 1 July 2015.
| Paragraph affected | How affected | By … [paragraph] |
|---|---|---|
| Aus2.2-Aus2.3 | amended | AASB 2012-10 [36] |
| Aus2.4 | deleted | AASB 2015-3 [13, 14] |
| 21A | addedamended | AASB 2014-3 [9]AASB 2015-1 [18] |
| B33A-B33D (and preceding heading) | added | AASB 2014-3 [10] |
| B34 (preceding heading) | amended | AASB 2014-3 [10] |
| C1A | added | AASB 2012-10 [37] |
| C1AA | added | AASB 2014-3 [11] |
| C1B (and preceding heading) | added | AASB 2012-10 [37] |
| C2-C5 | amended | AASB 2012-10 [38] |
| C7-C10 | amended | AASB 2012-10 [38] |
| C12 | amended | AASB 2012-10 [38] |
| C12A-C12B (preceding heading) | added | AASB 2012-10 [39] |
| C12A-C12B | addedrenumbered as C13A-C13B | AASB 2012-10 [39]AASB 2014-3 [12] |
| C13A-C13B | amended | AASB 2014-3 [12] |
| C14A (and preceding heading) | added | AASB 2014-3 [11] |
| Paragraph affected | How affected | By … [paragraph] |
|---|---|---|
| IE48 (footnote) | amended | AASB 2014-3 [13] |
| IE53-IE73 | added | AASB 2014-3 [14] |
This compiled Standard applies to annual reporting periods beginning on or after 1 January 2016. It takes into account amendments up to and including 28 January 2015 and was prepared on 2 April 2015 by the staff of the Australian Accounting Standards Board (AASB).
This compilation is not a separate Accounting Standard made by the AASB. Instead, it is a representation of AASB 11 (August 2011) as amended by other Accounting Standards, which are listed in the Table below.
| Standard | Date made | Application date(annual reporting periods … on or after …) | Application, saving or transitional provisions |
|---|---|---|---|
| AASB 11 | 29 Aug 2011 | (beginning) 1 Jan 2013 | see (a) below |
| AASB 2012-10 | 18 Dec 2012 | (beginning) 1 Jan 2013 | see (b) below |
| AASB 2014-3 | 11 Aug 2014 | (beginning) 1 Jan 2016 | see (c) below |
| AASB 2015-1 | 21 Jan 2015 | (beginning) 1 Jan 2016 | see (d) below |
| AASB 2015-3 | 28 Jan 2015 | (beginning) 1 Jul 2015 | see (e) below |
(a) For-profit entities (but not not-for-profit entities) may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013, provided that certain related Standards are also applied to such periods. This early application provision was subsequently amended by AASB 2012-10.
(b) For-profit entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2013. Not-for-profit entities may elect to apply the amendments to AASB 11 in this Standard to annual reporting periods beginning on or after 1 January 2013 but before 1 January 2014.
(c) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2016.
(d) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2005 but before 1 January 2016 only as set out in paragraph Aus2.3 of AASB 11.
(e) Entities may elect to apply this Standard to annual reporting periods beginning on or after 1 January 2014 but before 1 July 2015.
| Paragraph affected | How affected | By … [paragraph] |
|---|---|---|
| Aus2.2-Aus2.3 | amended | AASB 2012-10 [36] |
| Aus2.4 | deleted | AASB 2015-3 [13, 14] |
| 21A | addedamended | AASB 2014-3 [9]AASB 2015-1 [18] |
| B33A-B33D (and preceding heading) | added | AASB 2014-3 [10] |
| B34 (preceding heading) | amended | AASB 2014-3 [10] |
| C1A | added | AASB 2012-10 [37] |
| C1AA | added | AASB 2014-3 [11] |
| C1B (and preceding heading) | added | AASB 2012-10 [37] |
| C2-C5 | amended | AASB 2012-10 [38] |
| C7-C10 | amended | AASB 2012-10 [38] |
| C12 | amended | AASB 2012-10 [38] |
| C12A-C12B (preceding heading) | added | AASB 2012-10 [39] |
| C12A-C12B | addedrenumbered as C13A-C13B | AASB 2012-10 [39]AASB 2014-3 [12] |
| C13A-C13B | amended | AASB 2014-3 [12] |
| C14A (and preceding heading) | added | AASB 2014-3 [11] |
| Paragraph affected | How affected | By … [paragraph] |
|---|---|---|
| IE48 (footnote) | amended | AASB 2014-3 [13] |
| IE53-IE73 | added | AASB 2014-3 [14] |
AASB 11 Joint Arrangements as amended incorporates IFRS 11 Joint Arrangements as issued and amended by the International Accounting Standards Board (IASB). Paragraphs that have been added to this Standard (and do not appear in the text of IFRS 11) are identified with the prefix “Aus”, followed by the number of the preceding IASB paragraph and decimal numbering.
Entities that comply with AASB 11 as amended will simultaneously be in compliance with IFRS 11 as amended.
The Australian Accounting Standards Board made Accounting Standard AASB 11 Joint Arrangements under section 334 of the Corporations Act 2001 on 29 August 2011.
This compiled version of AASB 11 applies to annual reporting periods beginning on or after 1 January 2016. It incorporates relevant amendments contained in other AASB Standards made by the AASB up to and including 28 January 2015 (see Compilation Details).
Joint Arrangements
1 The objective of this Standard is to establish principles for financial reporting by entities that have an interest in arrangements that are controlled jointly (ie joint arrangements).
2 To meet the objective in paragraph 1, this Standard defines joint control and requires an entity that is a party to a joint arrangement to determine the type of joint arrangement in which it is involved by assessing its rights and obligations and to account for those rights and obligations in accordance with that type of joi
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