IFRS 11 Joint Arrangements

A joint arrangement is a contractual arrangement where at least two parties agree to share control over the activities of the arrangement. Unanimous consent towards decisions about relevant activities between the parties sharing control is a requirement in order to meet the definition of joint control.

 Joint arrangements can be joint operations or joint ventures. 

The classification is principle-based, and it depends on the parties' rights and obligations in relation to the arrangement. Where the parties' exposure to the arrangement only extends to the net assets of the arrangement, the arrangement is a joint venture.

 Joint operators have rights to assets and obligations for liabilities. Joint operations are often not structured through separate vehicles. Where a joint arrangement is included in a separate vehicle, it can be either a joint operation or a joint venture. 

Joint operators account for their rights to assets and obligations for liabilities. Joint ventures account for their interest by using the equity method of accounting