Objective
Sets out how parties to an arrangement they jointly control determine its type and account for their rights and obligations.
Scope
- All entities that are a party to a joint arrangement.
Key definitions
- Joint arrangement
- An arrangement of which two or more parties have joint control.
- Joint control
- Contractually agreed sharing of control, existing only when decisions about relevant activities require the unanimous consent of the parties sharing control.
- Joint operation
- A joint arrangement where the parties with joint control have rights to the assets and obligations for the liabilities.
- Joint venture
- A joint arrangement where the parties with joint control have rights to the net assets.
Recognition & measurement
Classification
- Not structured through a separate vehicle → joint operation.
- Structured through a separate vehicle → consider the legal form, contractual terms and other facts and circumstances to decide whether parties have rights to assets and obligations for liabilities (joint operation) or rights to net assets (joint venture).
Accounting
- Joint operator: recognise its own assets, liabilities, revenue and expenses, plus its share of those held or incurred jointly — in both individual and consolidated statements.
- Joint venturer: use the equity method under IAS 28.
- A party that participates but does not have joint control accounts for its interest under the relevant standard (e.g. IAS 28 or IFRS 9).
Key disclosures
- Disclosure requirements are in IFRS 12.
Common exam traps
- A separate legal entity does not automatically mean joint venture — the rights and obligations decide.
- Proportionate consolidation is not used for joint ventures.
- Unanimous consent is required for joint control; majority voting among the parties is not joint control.
Worked example: Joint operation
Scenario. Entity A has a 40% share in a jointly controlled pipeline (a joint operation). The pipeline cost $1,000,000 and generates revenue of $300,000 and expenses of $100,000 for the year.
- Share of asset = 40% × 1,000,000 = $400,000.
- Share of revenue = 40% × 300,000 = $120,000; share of expenses = 40% × 100,000 = $40,000.
Answer: A recognises a $400,000 asset, $120,000 revenue and $40,000 expenses, line by line.
Practise MCQs on this standard
Test your understanding of IFRS 11 with free chapter-wise MCQs and explanations in these question banks.
CAF-6 Corporate ReportingICAP CAFACCA FR Financial ReportingACCACA Inter P1 Advanced AccountingICAI CA Intermediate
ICAI CA Intermediate examines Indian Accounting Standards, which are based on but can differ from IFRS. Check your syllabus.