Section 26 - AASB 11 - Joint Arrangements - August 2011 - In its separate financial statements, a joint operator or joint venturer shall account for its interest in:

26In its separate financial statements, a joint operator or joint venturer shall account for its interest in:

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26 In its separate financial statements, a joint operator or joint venturer shall account for its interest in:

(a) a joint operation in accordance with paragraphs 20–22;

(b) a joint venture in accordance with paragraph 10 of AASB 127 Separate Financial Statements.

27 In its separate financial statements, a party that participates in, but does not have joint control of, a joint arrangement shall account for its interest in:

(a) a joint operation in accordance with paragraph 23;

(b) a joint venture in accordance with AASB 9, unless the entity has significant influence over the joint venture, in which case it shall apply paragraph 10 of AASB 127 (August 2011).

Joint operations Joint operations

Joint operations

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;

(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.

<table cellspacing="0" cellpadding="0" style="width:454.35pt; margin-left:21.25pt; border:0.75pt solid #000000; border-collapse:collapse"><thead><tr><td colspan="3" style="width:271pt; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Assessing the terms of the contractual arrangement</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top"></td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Joint operation</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Joint venture</td></tr></thead><tbody><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The terms of the contractual arrangement</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement provides the parties to the joint arrangement with rights to the assets, and obligations for the liabilities, relating to the arrangement.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement provides the parties to the joint arrangement with rights to the net assets of the arrangement (ie it is the separate vehicle, not the parties, that has rights to the assets, and obligations for the liabilities, relating to the arrangement).</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Rights to assets</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement share all interests (eg rights, title or ownership) in the assets relating to the arrangement in a specified proportion (eg in proportion to the parties’ ownership interest in the arrangement or in proportion to the activity carried out through the arrangement that is directly attributed to them).</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the assets brought into the arrangement or subsequently acquired by the joint arrangement are the arrangement’s assets. The parties have no interests (ie no rights, title or ownership) in the assets of the arrangement.</td></tr><tr><td rowspan="3" style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Obligations for liabilities</td><td rowspan="2" style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement share all liabilities, obligations, costs and expenses in a specified proportion (eg in proportion to the parties’ ownership interest in the arrangement or in proportion to the activity carried out through the arrangement that is directly attributed to them).</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the joint arrangement is liable for the debts and obligations of the arrangement.</td></tr><tr><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement are liable to the arrangement only to the extent of their respective investments in the arrangement or to their respective obligations to contribute any unpaid or additional capital to the arrangement, or both.</td></tr><tr><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement are liable for claims raised by third parties.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement states that creditors of the joint arrangement do not have rights of recourse against any party with respect to debts or obligations of the arrangement.</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Revenues, expenses, profit or loss</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes the allocation of revenues and expenses on the basis of the relative performance of each party to the joint arrangement. For example, the contractual arrangement might establish that revenues and expenses are allocated on the basis of the capacity that each party uses in a plant operated jointly, which could differ from their ownership interest in the joint arrangement. In other instances, the parties might have agreed to share the profit or loss relating to the arrangement on the basis of a specified proportion such as the parties’ ownership interest in the arrangement. This would not prevent the arrangement from being a joint operation if the parties have rights to the assets, and obligations for the liabilities, relating to the arrangement.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes each party’s share in the profit or loss relating to the activities of the arrangement.</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Guarantees</td><td colspan="2" style="width:207.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The parties to joint arrangements are often required to provide guarantees to third parties that, for example, receive a service from, or provide financing to, the joint arrangement. The provision of such guarantees, or the commitment by the parties to provide them, does not, by itself, determine that the joint arrangement is a joint operation. The feature that determines whether the joint arrangement is a joint operation or a joint venture is whether the parties have obligations for the liabilities relating to the arrangement (for some of which the parties might or might not have provided a guarantee).</td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="width:454.35pt; margin-left:21.25pt; border:0.75pt solid #000000; border-collapse:collapse"><thead><tr><td colspan="3" style="width:271pt; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Assessing the terms of the contractual arrangement</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top"></td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Joint operation</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Joint venture</td></tr></thead><tbody><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The terms of the contractual arrangement</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement provides the parties to the joint arrangement with rights to the assets, and obligations for the liabilities, relating to the arrangement.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement provides the parties to the joint arrangement with rights to the net assets of the arrangement (ie it is the separate vehicle, not the parties, that has rights to the assets, and obligations for the liabilities, relating to the arrangement).</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Rights to assets</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement share all interests (eg rights, title or ownership) in the assets relating to the arrangement in a specified proportion (eg in proportion to the parties’ ownership interest in the arrangement or in proportion to the activity carried out through the arrangement that is directly attributed to them).</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the assets brought into the arrangement or subsequently acquired by the joint arrangement are the arrangement’s assets. The parties have no interests (ie no rights, title or ownership) in the assets of the arrangement.</td></tr><tr><td rowspan="3" style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Obligations for liabilities</td><td rowspan="2" style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement share all liabilities, obligations, costs and expenses in a specified proportion (eg in proportion to the parties’ ownership interest in the arrangement or in proportion to the activity carried out through the arrangement that is directly attributed to them).</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the joint arrangement is liable for the debts and obligations of the arrangement.</td></tr><tr><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement are liable to the arrangement only to the extent of their respective investments in the arrangement or to their respective obligations to contribute any unpaid or additional capital to the arrangement, or both.</td></tr><tr><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement are liable for claims raised by third parties.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement states that creditors of the joint arrangement do not have rights of recourse against any party with respect to debts or obligations of the arrangement.</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Revenues, expenses, profit or loss</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes the allocation of revenues and expenses on the basis of the relative performance of each party to the joint arrangement. For example, the contractual arrangement might establish that revenues and expenses are allocated on the basis of the capacity that each party uses in a plant operated jointly, which could differ from their ownership interest in the joint arrangement. In other instances, the parties might have agreed to share the profit or loss relating to the arrangement on the basis of a specified proportion such as the parties’ ownership interest in the arrangement. This would not prevent the arrangement from being a joint operation if the parties have rights to the assets, and obligations for the liabilities, relating to the arrangement.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes each party’s share in the profit or loss relating to the activities of the arrangement.</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Guarantees</td><td colspan="2" style="width:207.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The parties to joint arrangements are often required to provide guarantees to third parties that, for example, receive a service from, or provide financing to, the joint arrangement. The provision of such guarantees, or the commitment by the parties to provide them, does not, by itself, determine that the joint arrangement is a joint operation. The feature that determines whether the joint arrangement is a joint operation or a joint venture is whether the parties have obligations for the liabilities relating to the arrangement (for some of which the parties might or might not have provided a guarantee).</td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="width:454.35pt; margin-left:21.25pt; border:0.75pt solid #000000; border-collapse:collapse"><thead><tr><td colspan="3" style="width:271pt; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Assessing the terms of the contractual arrangement</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top"></td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Joint operation</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Joint venture</td></tr></thead><tbody><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The terms of the contractual arrangement</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement provides the parties to the joint arrangement with rights to the assets, and obligations for the liabilities, relating to the arrangement.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement provides the parties to the joint arrangement with rights to the net assets of the arrangement (ie it is the separate vehicle, not the parties, that has rights to the assets, and obligations for the liabilities, relating to the arrangement).</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Rights to assets</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement share all interests (eg rights, title or ownership) in the assets relating to the arrangement in a specified proportion (eg in proportion to the parties’ ownership interest in the arrangement or in proportion to the activity carried out through the arrangement that is directly attributed to them).</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the assets brought into the arrangement or subsequently acquired by the joint arrangement are the arrangement’s assets. The parties have no interests (ie no rights, title or ownership) in the assets of the arrangement.</td></tr><tr><td rowspan="3" style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Obligations for liabilities</td><td rowspan="2" style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement share all liabilities, obligations, costs and expenses in a specified proportion (eg in proportion to the parties’ ownership interest in the arrangement or in proportion to the activity carried out through the arrangement that is directly attributed to them).</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the joint arrangement is liable for the debts and obligations of the arrangement.</td></tr><tr><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement are liable to the arrangement only to the extent of their respective investments in the arrangement or to their respective obligations to contribute any unpaid or additional capital to the arrangement, or both.</td></tr><tr><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement are liable for claims raised by third parties.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement states that creditors of the joint arrangement do not have rights of recourse against any party with respect to debts or obligations of the arrangement.</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Revenues, expenses, profit or loss</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes the allocation of revenues and expenses on the basis of the relative performance of each party to the joint arrangement. For example, the contractual arrangement might establish that revenues and expenses are allocated on the basis of the capacity that each party uses in a plant operated jointly, which could differ from their ownership interest in the joint arrangement. In other instances, the parties might have agreed to share the profit or loss relating to the arrangement on the basis of a specified proportion such as the parties’ ownership interest in the arrangement. This would not prevent the arrangement from being a joint operation if the parties have rights to the assets, and obligations for the liabilities, relating to the arrangement.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes each party’s share in the profit or loss relating to the activities of the arrangement.</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Guarantees</td><td colspan="2" style="width:207.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The parties to joint arrangements are often required to provide guarantees to third parties that, for example, receive a service from, or provide financing to, the joint arrangement. The provision of such guarantees, or the commitment by the parties to provide them, does not, by itself, determine that the joint arrangement is a joint operation. The feature that determines whether the joint arrangement is a joint operation or a joint venture is whether the parties have obligations for the liabilities relating to the arrangement (for some of which the parties might or might not have provided a guarantee).</td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="width:454.35pt; margin-left:21.25pt; border:0.75pt solid #000000; border-collapse:collapse"><thead><tr><td colspan="3" style="width:271pt; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Assessing the terms of the contractual arrangement</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top"></td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Joint operation</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Joint venture</td></tr></thead><tbody><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The terms of the contractual arrangement</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement provides the parties to the joint arrangement with rights to the assets, and obligations for the liabilities, relating to the arrangement.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement provides the parties to the joint arrangement with rights to the net assets of the arrangement (ie it is the separate vehicle, not the parties, that has rights to the assets, and obligations for the liabilities, relating to the arrangement).</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Rights to assets</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement share all interests (eg rights, title or ownership) in the assets relating to the arrangement in a specified proportion (eg in proportion to the parties’ ownership interest in the arrangement or in proportion to the activity carried out through the arrangement that is directly attributed to them).</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the assets brought into the arrangement or subsequently acquired by the joint arrangement are the arrangement’s assets. The parties have no interests (ie no rights, title or ownership) in the assets of the arrangement.</td></tr><tr><td rowspan="3" style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Obligations for liabilities</td><td rowspan="2" style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement share all liabilities, obligations, costs and expenses in a specified proportion (eg in proportion to the parties’ ownership interest in the arrangement or in proportion to the activity carried out through the arrangement that is directly attributed to them).</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the joint arrangement is liable for the debts and obligations of the arrangement.</td></tr><tr><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement are liable to the arrangement only to the extent of their respective investments in the arrangement or to their respective obligations to contribute any unpaid or additional capital to the arrangement, or both.</td></tr><tr><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement are liable for claims raised by third parties.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement states that creditors of the joint arrangement do not have rights of recourse against any party with respect to debts or obligations of the arrangement.</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Revenues, expenses, profit or loss</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes the allocation of revenues and expenses on the basis of the relative performance of each party to the joint arrangement. For example, the contractual arrangement might establish that revenues and expenses are allocated on the basis of the capacity that each party uses in a plant operated jointly, which could differ from their ownership interest in the joint arrangement. In other instances, the parties might have agreed to share the profit or loss relating to the arrangement on the basis of a specified proportion such as the parties’ ownership interest in the arrangement. This would not prevent the arrangement from being a joint operation if the parties have rights to the assets, and obligations for the liabilities, relating to the arrangement.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes each party’s share in the profit or loss relating to the activities of the arrangement.</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Guarantees</td><td colspan="2" style="width:207.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The parties to joint arrangements are often required to provide guarantees to third parties that, for example, receive a service from, or provide financing to, the joint arrangement. The provision of such guarantees, or the commitment by the parties to provide them, does not, by itself, determine that the joint arrangement is a joint operation. The feature that determines whether the joint arrangement is a joint operation or a joint venture is whether the parties have obligations for the liabilities relating to the arrangement (for some of which the parties might or might not have provided a guarantee).</td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="width:454.35pt; margin-left:21.25pt; border:0.75pt solid #000000; border-collapse:collapse"><thead><tr><td colspan="3" style="width:271pt; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Assessing the terms of the contractual arrangement</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top"></td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Joint operation</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Joint venture</td></tr></thead><tbody><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The terms of the contractual arrangement</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement provides the parties to the joint arrangement with rights to the assets, and obligations for the liabilities, relating to the arrangement.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement provides the parties to the joint arrangement with rights to the net assets of the arrangement (ie it is the separate vehicle, not the parties, that has rights to the assets, and obligations for the liabilities, relating to the arrangement).</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Rights to assets</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement share all interests (eg rights, title or ownership) in the assets relating to the arrangement in a specified proportion (eg in proportion to the parties’ ownership interest in the arrangement or in proportion to the activity carried out through the arrangement that is directly attributed to them).</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the assets brought into the arrangement or subsequently acquired by the joint arrangement are the arrangement’s assets. The parties have no interests (ie no rights, title or ownership) in the assets of the arrangement.</td></tr><tr><td rowspan="3" style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Obligations for liabilities</td><td rowspan="2" style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement share all liabilities, obligations, costs and expenses in a specified proportion (eg in proportion to the parties’ ownership interest in the arrangement or in proportion to the activity carried out through the arrangement that is directly attributed to them).</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the joint arrangement is liable for the debts and obligations of the arrangement.</td></tr><tr><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement are liable to the arrangement only to the extent of their respective investments in the arrangement or to their respective obligations to contribute any unpaid or additional capital to the arrangement, or both.</td></tr><tr><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes that the parties to the joint arrangement are liable for claims raised by third parties.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement states that creditors of the joint arrangement do not have rights of recourse against any party with respect to debts or obligations of the arrangement.</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Revenues, expenses, profit or loss</td><td style="width:97.2pt; border:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes the allocation of revenues and expenses on the basis of the relative performance of each party to the joint arrangement. For example, the contractual arrangement might establish that revenues and expenses are allocated on the basis of the capacity that each party uses in a plant operated jointly, which could differ from their ownership interest in the joint arrangement. In other instances, the parties might have agreed to share the profit or loss relating to the arrangement on the basis of a specified proportion such as the parties’ ownership interest in the arrangement. This would not prevent the arrangement from being a joint operation if the parties have rights to the assets, and obligations for the liabilities, relating to the arrangement.</td><td style="width:102pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The contractual arrangement establishes each party’s share in the profit or loss relating to the activities of the arrangement.</td></tr><tr><td style="width:55.8pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">Guarantees</td><td colspan="2" style="width:207.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding:3.62pt 3.62pt 1.62pt; vertical-align:top">The parties to joint arrangements are often required to provide guarantees to third parties that, for example, receive a service from, or provide financing to, the joint arrangement. The provision of such guarantees, or the commitment by the parties to provide them, does not, by itself, determine that the joint arrangement is a joint operation. The feature that determines whether the joint arrangement is a joint operation or a joint venture is whether the parties have obligations for the liabilities relating to the arrangement (for some of which the parties might or might not have provided a guarantee).</td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="width:255.9pt; margin-left:56.45pt; border-collapse:collapse"><thead><tr><td style="width:116.8pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td colspan="3" style="width:116.75pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">Company E’s share in the assets and liabilities related to Joint Operation D</td></tr></thead><tbody><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Property, plant and equipment</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">48%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Intangible assets (excluding goodwill)</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">90%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Accounts receivable</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">40%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Inventory</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">40%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Retirement benefit obligations</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">15%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Accounts payable</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">40%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.48pt; vertical-align:bottom">Contingent liabilities</td><td style="width:36.4pt; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.48pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.48pt; vertical-align:bottom">56%</td></tr></tbody><tbody><tr style="height:0pt"><td style="width:127.6pt"></td><td style="width:7.1pt"></td><td style="width:47.2pt"></td><td style="width:73.25pt"></td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="width:255.9pt; margin-left:56.45pt; border:0.75pt solid #000000; border-collapse:collapse"><thead><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom"></td><td colspan="2" style="width:109.65pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">Fair value or other measure specified by AASB 3 for Company E’s shares in the identifiable assets and liabilities of Joint Operation D CU</td></tr></thead><tbody><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Property, plant and equipment</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">138</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Intangible assets (excluding goodwill)</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">72</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Accounts receivable</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">84</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Inventory</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">70</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Retirement benefit obligations</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">(12)</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Accounts payable</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">(48)</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Contingent liabilities</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">(52)</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Deferred tax liability</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">(24)</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Net assets</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; border-top:0.75pt solid #000000; border-bottom:1.5pt double #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">228</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom"></td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; border-top:1.5pt double #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom"></td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="width:255.9pt; margin-left:56.45pt; border-collapse:collapse"><thead><tr><td style="width:116.8pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td colspan="3" style="width:116.75pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">Company E’s share in the assets and liabilities related to Joint Operation D</td></tr></thead><tbody><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Property, plant and equipment</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">48%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Intangible assets (excluding goodwill)</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">90%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Accounts receivable</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">40%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Inventory</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">40%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Retirement benefit obligations</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">15%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.85pt; vertical-align:bottom">Accounts payable</td><td style="width:36.4pt; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.85pt; vertical-align:bottom">40%</td></tr><tr><td colspan="2" style="width:123.9pt; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.03pt; padding-bottom:2.48pt; vertical-align:bottom">Contingent liabilities</td><td style="width:36.4pt; border-bottom:0.75pt solid #000000; padding-right:5.4pt; padding-left:5.4pt; padding-bottom:2.48pt; vertical-align:bottom"></td><td style="width:62.45pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; padding-bottom:2.48pt; vertical-align:bottom">56%</td></tr></tbody><tbody><tr style="height:0pt"><td style="width:127.6pt"></td><td style="width:7.1pt"></td><td style="width:47.2pt"></td><td style="width:73.25pt"></td></tr></tbody></table> ``` <table cellspacing="0" cellpadding="0" style="width:255.9pt; margin-left:56.45pt; border:0.75pt solid #000000; border-collapse:collapse"><thead><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom"></td><td colspan="2" style="width:109.65pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">Fair value or other measure specified by AASB 3 for Company E’s shares in the identifiable assets and liabilities of Joint Operation D CU</td></tr></thead><tbody><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Property, plant and equipment</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">138</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Intangible assets (excluding goodwill)</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">72</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Accounts receivable</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">84</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Inventory</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">70</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Retirement benefit obligations</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">(12)</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Accounts payable</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">(48)</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Contingent liabilities</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">(52)</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Deferred tax liability</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">(24)</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom">Net assets</td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; border-top:0.75pt solid #000000; border-bottom:1.5pt double #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom">228</td></tr><tr><td style="width:123.9pt; padding-right:5.4pt; padding-left:5.03pt; vertical-align:bottom"></td><td style="width:31.7pt; padding-right:5.4pt; padding-left:5.4pt; vertical-align:bottom"></td><td style="width:67.15pt; border-top:1.5pt double #000000; padding-right:5.03pt; padding-left:5.4pt; vertical-align:bottom"></td></tr></tbody></table> ```

joint arrangement	An arrangement of which two or more parties have joint control.
joint control	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.
joint operation	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.
joint operator	A party to a joint operation that has joint control of that joint operation.
joint venture	A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
joint venture	A party to a joint venture that has joint control of that joint venture.
party to a joint arrangement	An entity that participates in a joint arrangement, regardless of whether that entity has joint control of the arrangement.
separate vehicle	A separately identifiable financial structure, including separate legal entities or entities recognised by statute, regardless of whether those entities have a legal personality.

joint arrangement	An arrangement of which two or more parties have joint control.
joint control	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.
joint operation	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.
joint operator	A party to a joint operation that has joint control of that joint operation.
joint venture	A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
joint venture	A party to a joint venture that has joint control of that joint venture.
party to a joint arrangement	An entity that participates in a joint arrangement, regardless of whether that entity has joint control of the arrangement.
separate vehicle	A separately identifiable financial structure, including separate legal entities or entities recognised by statute, regardless of whether those entities have a legal personality.

Application examples
Example 1
Assume that three parties establish an arrangement: A has 50 per cent of the voting rights in the arrangement, B has 30 per cent and C has 20 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of B. The terms of their contractual arrangement requiring at least 75 per cent of the voting rights to make decisions about the relevant activities imply that A and B have joint control of the arrangement because decisions about the relevant activities of the arrangement cannot be made without both A and B agreeing.
Example 2
Assume an arrangement has three parties: A has 50 per cent of the voting rights in the arrangement and B and C each have 25 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of either B or C. In this example, A, B and C collectively control the arrangement. However, there is more than one combination of parties that can agree to reach 75 per cent of the voting rights (ie either A and B or A and C). In such a situation, to be a joint arrangement the contractual arrangement between the parties would need to specify which combination of the parties is required to agree unanimously to decisions about the relevant activities of the arrangement.
Example 3
Assume an arrangement in which A and B each have 35 per cent of the voting rights in the arrangement with the remaining 30 per cent being widely dispersed. Decisions about the relevant activities require approval by a majority of the voting rights. A and B have joint control of the arrangement only if the contractual arrangement specifies that decisions about the relevant activities of the arrangement require both A and B agreeing.

Application examples

Example 1

Assume that three parties establish an arrangement: A has 50 per cent of the voting rights in the arrangement, B has 30 per cent and C has 20 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of B. The terms of their contractual arrangement requiring at least 75 per cent of the voting rights to make decisions about the relevant activities imply that A and B have joint control of the arrangement because decisions about the relevant activities of the arrangement cannot be made without both A and B agreeing.

Example 2

Assume an arrangement has three parties: A has 50 per cent of the voting rights in the arrangement and B and C each have 25 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of either B or C. In this example, A, B and C collectively control the arrangement. However, there is more than one combination of parties that can agree to reach 75 per cent of the voting rights (ie either A and B or A and C). In such a situation, to be a joint arrangement the contractual arrangement between the parties would need to specify which combination of the parties is required to agree unanimously to decisions about the relevant activities of the arrangement.

Example 3

Assume an arrangement in which A and B each have 35 per cent of the voting rights in the arrangement with the remaining 30 per cent being widely dispersed. Decisions about the relevant activities require approval by a majority of the voting rights. A and B have joint control of the arrangement only if the contractual arrangement specifies that decisions about the relevant activities of the arrangement require both A and B agreeing.

Application example
Example 4
Assume that two parties structure a joint arrangement in an incorporated entity. Each party has a 50 per cent ownership interest in the incorporated entity. The incorporation enables the separation of the entity from its owners and as a consequence the assets and liabilities held in the entity are the assets and liabilities of the incorporated entity. In such a case, the assessment of the rights and obligations conferred upon the parties by the legal form of the separate vehicle indicates that the parties have rights to the net assets of the arrangement.
However, the parties modify the features of the corporation through their contractual arrangement so that each has an interest in the assets of the incorporated entity and each is liable for the liabilities of the incorporated entity in a specified proportion. Such contractual modifications to the features of a corporation can cause an arrangement to be a joint operation.

Application example
Example 5
Assume that two parties structure a joint arrangement in an incorporated entity (entity C) in which each party has a 50 per cent ownership interest. The purpose of the arrangement is to manufacture materials required by the parties for their own, individual manufacturing processes. The arrangement ensures that the parties operate the facility that produces the materials to the quantity and quality specifications of the parties.The legal form of entity C (an incorporated entity) through which the activities are conducted initially indicates that the assets and liabilities held in entity C are the assets and liabilities of entity C. The contractual arrangement between the parties does not specify that the parties have rights to the assets or obligations for the liabilities of entity C. Accordingly, the legal form of entity C and the terms of the contractual arrangement indicate that the arrangement is a joint venture.However, the parties also consider the following aspects of the arrangement:The parties agreed to purchase all the output produced by entity C in a ratio of 50:50. Entity C cannot sell any of the output to third parties, unless this is approved by the two parties to the arrangement. Because the purpose of the arrangement is to provide the parties with output they require, such sales to third parties are expected to be uncommon and not material.The price of the output sold to the parties is set by both parties at a level that is designed to cover the costs of production and administrative expenses incurred by entity C. On the basis of this operating model, the arrangement is intended to operate at a break-even level.
From the fact pattern above, the following facts and circumstances are relevant:The obligation of the parties to purchase all the output produced by entity C reflects the exclusive dependence of entity C upon the parties for the generation of cash flows and, thus, the parties have an obligation to fund the settlement of the liabilities of entity C.The fact that the parties have rights to all the output produced by entity C means that the parties are consuming, and therefore have rights to, all the economic benefits of the assets of entity C.These facts and circumstances indicate that the arrangement is a joint operation. The conclusion about the classification of the joint arrangement in these circumstances would not change if, instead of the parties using their share of the output themselves in a subsequent manufacturing process, the parties sold their share of the output to third parties.
If the parties changed the terms of the contractual arrangement so that the arrangement was able to sell output to third parties, this would result in entity C assuming demand, inventory and credit risks. In that scenario, such a change in the facts and circumstances would require reassessment of the classification of the joint arrangement. Such facts and circumstances would indicate that the arrangement is a joint venture.

Application example

Example 5

Assume that two parties structure a joint arrangement in an incorporated entity (entity C) in which each party has a 50 per cent ownership interest. The purpose of the arrangement is to manufacture materials required by the parties for their own, individual manufacturing processes. The arrangement ensures that the parties operate the facility that produces the materials to the quantity and quality specifications of the parties.The legal form of entity C (an incorporated entity) through which the activities are conducted initially indicates that the assets and liabilities held in entity C are the assets and liabilities of entity C. The contractual arrangement between the parties does not specify that the parties have rights to the assets or obligations for the liabilities of entity C. Accordingly, the legal form of entity C and the terms of the contractual arrangement indicate that the arrangement is a joint venture.However, the parties also consider the following aspects of the arrangement:The parties agreed to purchase all the output produced by entity C in a ratio of 50:50. Entity C cannot sell any of the output to third parties, unless this is approved by the two parties to the arrangement. Because the purpose of the arrangement is to provide the parties with output they require, such sales to third parties are expected to be uncommon and not material.The price of the output sold to the parties is set by both parties at a level that is designed to cover the costs of production and administrative expenses incurred by entity C. On the basis of this operating model, the arrangement is intended to operate at a break-even level.

From the fact pattern above, the following facts and circumstances are relevant:The obligation of the parties to purchase all the output produced by entity C reflects the exclusive dependence of entity C upon the parties for the generation of cash flows and, thus, the parties have an obligation to fund the settlement of the liabilities of entity C.The fact that the parties have rights to all the output produced by entity C means that the parties are consuming, and therefore have rights to, all the economic benefits of the assets of entity C.These facts and circumstances indicate that the arrangement is a joint operation. The conclusion about the classification of the joint arrangement in these circumstances would not change if, instead of the parties using their share of the output themselves in a subsequent manufacturing process, the parties sold their share of the output to third parties.

If the parties changed the terms of the contractual arrangement so that the arrangement was able to sell output to third parties, this would result in entity C assuming demand, inventory and credit risks. In that scenario, such a change in the facts and circumstances would require reassessment of the classification of the joint arrangement. Such facts and circumstances would indicate that the arrangement is a joint venture.

Application examples
Example 1
Assume that three parties establish an arrangement: A has 50 per cent of the voting rights in the arrangement, B has 30 per cent and C has 20 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of B. The terms of their contractual arrangement requiring at least 75 per cent of the voting rights to make decisions about the relevant activities imply that A and B have joint control of the arrangement because decisions about the relevant activities of the arrangement cannot be made without both A and B agreeing.
Example 2
Assume an arrangement has three parties: A has 50 per cent of the voting rights in the arrangement and B and C each have 25 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of either B or C. In this example, A, B and C collectively control the arrangement. However, there is more than one combination of parties that can agree to reach 75 per cent of the voting rights (ie either A and B or A and C). In such a situation, to be a joint arrangement the contractual arrangement between the parties would need to specify which combination of the parties is required to agree unanimously to decisions about the relevant activities of the arrangement.
Example 3
Assume an arrangement in which A and B each have 35 per cent of the voting rights in the arrangement with the remaining 30 per cent being widely dispersed. Decisions about the relevant activities require approval by a majority of the voting rights. A and B have joint control of the arrangement only if the contractual arrangement specifies that decisions about the relevant activities of the arrangement require both A and B agreeing.

Application examples

Example 1

Example 2

Example 3

Application example
Example 4
Assume that two parties structure a joint arrangement in an incorporated entity. Each party has a 50 per cent ownership interest in the incorporated entity. The incorporation enables the separation of the entity from its owners and as a consequence the assets and liabilities held in the entity are the assets and liabilities of the incorporated entity. In such a case, the assessment of the rights and obligations conferred upon the parties by the legal form of the separate vehicle indicates that the parties have rights to the net assets of the arrangement.
However, the parties modify the features of the corporation through their contractual arrangement so that each has an interest in the assets of the incorporated entity and each is liable for the liabilities of the incorporated entity in a specified proportion. Such contractual modifications to the features of a corporation can cause an arrangement to be a joint operation.

Application example
Example 5
Assume that two parties structure a joint arrangement in an incorporated entity (entity C) in which each party has a 50 per cent ownership interest. The purpose of the arrangement is to manufacture materials required by the parties for their own, individual manufacturing processes. The arrangement ensures that the parties operate the facility that produces the materials to the quantity and quality specifications of the parties.The legal form of entity C (an incorporated entity) through which the activities are conducted initially indicates that the assets and liabilities held in entity C are the assets and liabilities of entity C. The contractual arrangement between the parties does not specify that the parties have rights to the assets or obligations for the liabilities of entity C. Accordingly, the legal form of entity C and the terms of the contractual arrangement indicate that the arrangement is a joint venture.However, the parties also consider the following aspects of the arrangement:The parties agreed to purchase all the output produced by entity C in a ratio of 50:50. Entity C cannot sell any of the output to third parties, unless this is approved by the two parties to the arrangement. Because the purpose of the arrangement is to provide the parties with output they require, such sales to third parties are expected to be uncommon and not material.The price of the output sold to the parties is set by both parties at a level that is designed to cover the costs of production and administrative expenses incurred by entity C. On the basis of this operating model, the arrangement is intended to operate at a break-even level.
From the fact pattern above, the following facts and circumstances are relevant:The obligation of the parties to purchase all the output produced by entity C reflects the exclusive dependence of entity C upon the parties for the generation of cash flows and, thus, the parties have an obligation to fund the settlement of the liabilities of entity C.The fact that the parties have rights to all the output produced by entity C means that the parties are consuming, and therefore have rights to, all the economic benefits of the assets of entity C.These facts and circumstances indicate that the arrangement is a joint operation. The conclusion about the classification of the joint arrangement in these circumstances would not change if, instead of the parties using their share of the output themselves in a subsequent manufacturing process, the parties sold their share of the output to third parties.
If the parties changed the terms of the contractual arrangement so that the arrangement was able to sell output to third parties, this would result in entity C assuming demand, inventory and credit risks. In that scenario, such a change in the facts and circumstances would require reassessment of the classification of the joint arrangement. Such facts and circumstances would indicate that the arrangement is a joint venture.

Application example

Example 5

Application examples
Example 1
Assume that three parties establish an arrangement: A has 50 per cent of the voting rights in the arrangement, B has 30 per cent and C has 20 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of B. The terms of their contractual arrangement requiring at least 75 per cent of the voting rights to make decisions about the relevant activities imply that A and B have joint control of the arrangement because decisions about the relevant activities of the arrangement cannot be made without both A and B agreeing.
Example 2
Assume an arrangement has three parties: A has 50 per cent of the voting rights in the arrangement and B and C each have 25 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of either B or C. In this example, A, B and C collectively control the arrangement. However, there is more than one combination of parties that can agree to reach 75 per cent of the voting rights (ie either A and B or A and C). In such a situation, to be a joint arrangement the contractual arrangement between the parties would need to specify which combination of the parties is required to agree unanimously to decisions about the relevant activities of the arrangement.
Example 3
Assume an arrangement in which A and B each have 35 per cent of the voting rights in the arrangement with the remaining 30 per cent being widely dispersed. Decisions about the relevant activities require approval by a majority of the voting rights. A and B have joint control of the arrangement only if the contractual arrangement specifies that decisions about the relevant activities of the arrangement require both A and B agreeing.

Application examples

Example 1

Example 2

Example 3

Application examples
Example 1
Assume that three parties establish an arrangement: A has 50 per cent of the voting rights in the arrangement, B has 30 per cent and C has 20 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of B. The terms of their contractual arrangement requiring at least 75 per cent of the voting rights to make decisions about the relevant activities imply that A and B have joint control of the arrangement because decisions about the relevant activities of the arrangement cannot be made without both A and B agreeing.
Example 2
Assume an arrangement has three parties: A has 50 per cent of the voting rights in the arrangement and B and C each have 25 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of either B or C. In this example, A, B and C collectively control the arrangement. However, there is more than one combination of parties that can agree to reach 75 per cent of the voting rights (ie either A and B or A and C). In such a situation, to be a joint arrangement the contractual arrangement between the parties would need to specify which combination of the parties is required to agree unanimously to decisions about the relevant activities of the arrangement.
Example 3
Assume an arrangement in which A and B each have 35 per cent of the voting rights in the arrangement with the remaining 30 per cent being widely dispersed. Decisions about the relevant activities require approval by a majority of the voting rights. A and B have joint control of the arrangement only if the contractual arrangement specifies that decisions about the relevant activities of the arrangement require both A and B agreeing.

Application examples

Example 1

Example 2

Example 3

Application example
Example 4
Assume that two parties structure a joint arrangement in an incorporated entity. Each party has a 50 per cent ownership interest in the incorporated entity. The incorporation enables the separation of the entity from its owners and as a consequence the assets and liabilities held in the entity are the assets and liabilities of the incorporated entity. In such a case, the assessment of the rights and obligations conferred upon the parties by the legal form of the separate vehicle indicates that the parties have rights to the net assets of the arrangement.
However, the parties modify the features of the corporation through their contractual arrangement so that each has an interest in the assets of the incorporated entity and each is liable for the liabilities of the incorporated entity in a specified proportion. Such contractual modifications to the features of a corporation can cause an arrangement to be a joint operation.

Application example
Example 5
Assume that two parties structure a joint arrangement in an incorporated entity (entity C) in which each party has a 50 per cent ownership interest. The purpose of the arrangement is to manufacture materials required by the parties for their own, individual manufacturing processes. The arrangement ensures that the parties operate the facility that produces the materials to the quantity and quality specifications of the parties.The legal form of entity C (an incorporated entity) through which the activities are conducted initially indicates that the assets and liabilities held in entity C are the assets and liabilities of entity C. The contractual arrangement between the parties does not specify that the parties have rights to the assets or obligations for the liabilities of entity C. Accordingly, the legal form of entity C and the terms of the contractual arrangement indicate that the arrangement is a joint venture.However, the parties also consider the following aspects of the arrangement:The parties agreed to purchase all the output produced by entity C in a ratio of 50:50. Entity C cannot sell any of the output to third parties, unless this is approved by the two parties to the arrangement. Because the purpose of the arrangement is to provide the parties with output they require, such sales to third parties are expected to be uncommon and not material.The price of the output sold to the parties is set by both parties at a level that is designed to cover the costs of production and administrative expenses incurred by entity C. On the basis of this operating model, the arrangement is intended to operate at a break-even level.
From the fact pattern above, the following facts and circumstances are relevant:The obligation of the parties to purchase all the output produced by entity C reflects the exclusive dependence of entity C upon the parties for the generation of cash flows and, thus, the parties have an obligation to fund the settlement of the liabilities of entity C.The fact that the parties have rights to all the output produced by entity C means that the parties are consuming, and therefore have rights to, all the economic benefits of the assets of entity C.These facts and circumstances indicate that the arrangement is a joint operation. The conclusion about the classification of the joint arrangement in these circumstances would not change if, instead of the parties using their share of the output themselves in a subsequent manufacturing process, the parties sold their share of the output to third parties.
If the parties changed the terms of the contractual arrangement so that the arrangement was able to sell output to third parties, this would result in entity C assuming demand, inventory and credit risks. In that scenario, such a change in the facts and circumstances would require reassessment of the classification of the joint arrangement. Such facts and circumstances would indicate that the arrangement is a joint venture.

Application example

Example 5

Application example
Example 4
Assume that two parties structure a joint arrangement in an incorporated entity. Each party has a 50 per cent ownership interest in the incorporated entity. The incorporation enables the separation of the entity from its owners and as a consequence the assets and liabilities held in the entity are the assets and liabilities of the incorporated entity. In such a case, the assessment of the rights and obligations conferred upon the parties by the legal form of the separate vehicle indicates that the parties have rights to the net assets of the arrangement.
However, the parties modify the features of the corporation through their contractual arrangement so that each has an interest in the assets of the incorporated entity and each is liable for the liabilities of the incorporated entity in a specified proportion. Such contractual modifications to the features of a corporation can cause an arrangement to be a joint operation.

Application example
Example 5
Assume that two parties structure a joint arrangement in an incorporated entity (entity C) in which each party has a 50 per cent ownership interest. The purpose of the arrangement is to manufacture materials required by the parties for their own, individual manufacturing processes. The arrangement ensures that the parties operate the facility that produces the materials to the quantity and quality specifications of the parties.The legal form of entity C (an incorporated entity) through which the activities are conducted initially indicates that the assets and liabilities held in entity C are the assets and liabilities of entity C. The contractual arrangement between the parties does not specify that the parties have rights to the assets or obligations for the liabilities of entity C. Accordingly, the legal form of entity C and the terms of the contractual arrangement indicate that the arrangement is a joint venture.However, the parties also consider the following aspects of the arrangement:The parties agreed to purchase all the output produced by entity C in a ratio of 50:50. Entity C cannot sell any of the output to third parties, unless this is approved by the two parties to the arrangement. Because the purpose of the arrangement is to provide the parties with output they require, such sales to third parties are expected to be uncommon and not material.The price of the output sold to the parties is set by both parties at a level that is designed to cover the costs of production and administrative expenses incurred by entity C. On the basis of this operating model, the arrangement is intended to operate at a break-even level.
From the fact pattern above, the following facts and circumstances are relevant:The obligation of the parties to purchase all the output produced by entity C reflects the exclusive dependence of entity C upon the parties for the generation of cash flows and, thus, the parties have an obligation to fund the settlement of the liabilities of entity C.The fact that the parties have rights to all the output produced by entity C means that the parties are consuming, and therefore have rights to, all the economic benefits of the assets of entity C.These facts and circumstances indicate that the arrangement is a joint operation. The conclusion about the classification of the joint arrangement in these circumstances would not change if, instead of the parties using their share of the output themselves in a subsequent manufacturing process, the parties sold their share of the output to third parties.
If the parties changed the terms of the contractual arrangement so that the arrangement was able to sell output to third parties, this would result in entity C assuming demand, inventory and credit risks. In that scenario, such a change in the facts and circumstances would require reassessment of the classification of the joint arrangement. Such facts and circumstances would indicate that the arrangement is a joint venture.

Application example

Example 5

Application examples
Example 1
Assume that three parties establish an arrangement: A has 50 per cent of the voting rights in the arrangement, B has 30 per cent and C has 20 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of B. The terms of their contractual arrangement requiring at least 75 per cent of the voting rights to make decisions about the relevant activities imply that A and B have joint control of the arrangement because decisions about the relevant activities of the arrangement cannot be made without both A and B agreeing.
Example 2
Assume an arrangement has three parties: A has 50 per cent of the voting rights in the arrangement and B and C each have 25 per cent. The contractual arrangement between A, B and C specifies that at least 75 per cent of the voting rights are required to make decisions about the relevant activities of the arrangement. Even though A can block any decision, it does not control the arrangement because it needs the agreement of either B or C. In this example, A, B and C collectively control the arrangement. However, there is more than one combination of parties that can agree to reach 75 per cent of the voting rights (ie either A and B or A and C). In such a situation, to be a joint arrangement the contractual arrangement between the parties would need to specify which combination of the parties is required to agree unanimously to decisions about the relevant activities of the arrangement.
Example 3
Assume an arrangement in which A and B each have 35 per cent of the voting rights in the arrangement with the remaining 30 per cent being widely dispersed. Decisions about the relevant activities require approval by a majority of the voting rights. A and B have joint control of the arrangement only if the contractual arrangement specifies that decisions about the relevant activities of the arrangement require both A and B agreeing.

Application examples

Example 1

Example 2

Example 3

Application example
Example 4
Assume that two parties structure a joint arrangement in an incorporated entity. Each party has a 50 per cent ownership interest in the incorporated entity. The incorporation enables the separation of the entity from its owners and as a consequence the assets and liabilities held in the entity are the assets and liabilities of the incorporated entity. In such a case, the assessment of the rights and obligations conferred upon the parties by the legal form of the separate vehicle indicates that the parties have rights to the net assets of the arrangement.
However, the parties modify the features of the corporation through their contractual arrangement so that each has an interest in the assets of the incorporated entity and each is liable for the liabilities of the incorporated entity in a specified proportion. Such contractual modifications to the features of a corporation can cause an arrangement to be a joint operation.

Application example
Example 5
Assume that two parties structure a joint arrangement in an incorporated entity (entity C) in which each party has a 50 per cent ownership interest. The purpose of the arrangement is to manufacture materials required by the parties for their own, individual manufacturing processes. The arrangement ensures that the parties operate the facility that produces the materials to the quantity and quality specifications of the parties.The legal form of entity C (an incorporated entity) through which the activities are conducted initially indicates that the assets and liabilities held in entity C are the assets and liabilities of entity C. The contractual arrangement between the parties does not specify that the parties have rights to the assets or obligations for the liabilities of entity C. Accordingly, the legal form of entity C and the terms of the contractual arrangement indicate that the arrangement is a joint venture.However, the parties also consider the following aspects of the arrangement:The parties agreed to purchase all the output produced by entity C in a ratio of 50:50. Entity C cannot sell any of the output to third parties, unless this is approved by the two parties to the arrangement. Because the purpose of the arrangement is to provide the parties with output they require, such sales to third parties are expected to be uncommon and not material.The price of the output sold to the parties is set by both parties at a level that is designed to cover the costs of production and administrative expenses incurred by entity C. On the basis of this operating model, the arrangement is intended to operate at a break-even level.
From the fact pattern above, the following facts and circumstances are relevant:The obligation of the parties to purchase all the output produced by entity C reflects the exclusive dependence of entity C upon the parties for the generation of cash flows and, thus, the parties have an obligation to fund the settlement of the liabilities of entity C.The fact that the parties have rights to all the output produced by entity C means that the parties are consuming, and therefore have rights to, all the economic benefits of the assets of entity C.These facts and circumstances indicate that the arrangement is a joint operation. The conclusion about the classification of the joint arrangement in these circumstances would not change if, instead of the parties using their share of the output themselves in a subsequent manufacturing process, the parties sold their share of the output to third parties.
If the parties changed the terms of the contractual arrangement so that the arrangement was able to sell output to third parties, this would result in entity C assuming demand, inventory and credit risks. In that scenario, such a change in the facts and circumstances would require reassessment of the classification of the joint arrangement. Such facts and circumstances would indicate that the arrangement is a joint venture.

Application example

Example 5

Consideration transferred	CU300
Company E’s shares in the identifiable assets and liabilities relating to its interest in the joint operation	CU228
Goodwill	CU72

Consideration transferred	CU300
Company E’s shares in the identifiable assets and liabilities relating to its interest in the joint operation	CU228
Goodwill	CU72

26In its separate financial statements, a joint operator or joint venturer shall account for its interest in:

Get a plain-English read of 26

Joint operations Joint operations

Joint operations

Joint ventures Joint ventures

Joint ventures

Separate financial statements Separate financial statements

Separate financial statements

APPENDIX A APPENDIX A

APPENDIX A

Defined Terms

Defined Terms Defined Terms

Defined Terms

APPENDIX B APPENDIX B

Classification of a joint arrangement: assessment of the parties’ rights and obligations arising from the arrangement

Application guidance Application guidance

Joint arrangements Joint arrangements

Classification of a joint arrangement: assessment of the parties’ rights and obligations arising from the arrangement

Contractual arrangement (paragraph 5) Contractual arrangement (paragraph 5)

Joint control (paragraphs 7—13) Joint control (paragraphs 7—13)

Types of joint arrangement (paragraphs 1 Types of joint arrangement (paragraphs 14—19)

Classification of a joint arrangement Classification of a joint arrangement

Structure of the joint arrangement Structure of the joint arrangement

Classification of a joint arrangement: assessment of the parties’ rights and obligations arising from the arrangement

Joint arrangements not structured throug Joint arrangements not structured through a separate vehicle

Joint arrangements structured through a Joint arrangements structured through a separate vehicle

Classification of a joint arrangement: a Classification of a joint arrangement: assessment of the parties’ rights and obligations arising from the arrangement

Classification of a joint arrangement: assessment of the parties’ rights and obligations arising from the arrangement

The legal form of the separate vehicle The legal form of the separate vehicle

Assessing the terms of the contractual a Assessing the terms of the contractual arrangement

Assessing other facts and circumstances Assessing other facts and circumstances

Accounting for acquisitions of interests Accounting for acquisitions of interests in joint operations

Financial statements of parties to a joi Financial statements of parties to a joint arrangement (paragraphs 21A-22)

Classification of a joint arrangement: assessment of the parties’ rights and obligations arising from the arrangement

Accounting for sales or contributions of Accounting for sales or contributions of assets to a joint operation

Accounting for purchases of assets from Accounting for purchases of assets from a joint operation

Appendix C Appendix C

Appendix C

Effective date and transition

Effective date

Transition

Joint ventures – transition from proportionate consolidation to the equity method

Joint operations – transition from the equity method to accounting for assets and liabilities

Transition provisions in an entity’s separate financial statements

References to the ‘immediately preceding period’

References to AASB 9

Withdrawal of other IFRSs

Effective date and transition Effective date and transition

Effective date and transition

Effective date Effective date

Effective date

Transition Transition

Transition

Joint ventures — transition from proport Joint ventures — transition from proportionate consolidation to the equity method

Joint ventures – transition from proportionate consolidation to the equity method

Joint operations — transition from the e Joint operations — transition from the equity method to accounting for assets and liabilities

Joint operations – transition from the equity method to accounting for assets and liabilities

Transition provisions in an entity’s sep Transition provisions in an entity’s separate financial statements

Transition provisions in an entity’s separate financial statements

References to the ‘immediately preceding References to the ‘immediately preceding period’

References to the ‘immediately preceding period’

References to AASB 9 References to AASB 9

References to AASB 9

Accounting for acquisitions of interests Accounting for acquisitions of interests in joint operations

Withdrawal of other IFRSs Withdrawal of other IFRSs

Withdrawal of other IFRSs

Illustrative examples Illustrative examples

Contents

Example 1 – Construction services

Example 2 – Shopping centre operated jointly

Example 3 – Joint manufacturing and distribution of a product

Variation

Example 4 – Bank operated jointly

Example 5 – Oil and gas exploration, development and production activities

Shareholders’ agreement

Joint Operating Agreement (JOA)

Example 6 – Liquefied natural gas arrangement

Contents Contents

Contents

Illustrative examples Illustrative examples