Tute 6 SolutionsJoint venture（三）.docVIP

Tute 6 Solutions:Joint venture AF203(DFL) 1) A joint venture is defined in AASB 131/IAs 31 as a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. The contractual arrangement between the parties establishes the operation and management of the joint venture. The economic activity being undertaken by the entity is the subject of joint control (if one organisation controlled the venture then it would not be classified as a joint venture). In relation to ‘joint control’, paragraph 3 of AASB 131/IAS 31 states: Joint control is the contractually agreed sharing of control over an economic activity and exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control (the venturers). Joint ventures can be established through the creation of a separate entity—a jointly controlled entity. Joint ventures can also exist when a separate entity has not been established but where the arrangement involves the shared used of assets, other resources and expertise of the venturers—such joint ventures are referred to as jointly controlled operations. Where the joint venture simply involves the joint control of one or more assets then such an arrangement is referred to as ‘jointly controlled assets’. As AASB 131/IAS 31 states: Joint ventures take many different forms and structures. This Standard identifies three broad types—jointly controlled operations, jointly controlled assets and jointly controlled entities—that are commonly described as, and meet the definition of, joint ventures. The following characteristics are common to all joint ventures: (a) two or more venturers are bound by a contractual arrangement; and (b) the contractual arrangement establishes joint control. Joint ventures can take many different forms and structures, such as partnerships, trusts, and incorporated entities. Where a separate entity is formed, the joint