Skip to main content
IFRS Academy

CERTYNEX IFRS ACADEMY

My account — Professional

Search the Academy

Home
My learning path
Exercises & quizzes
Cases
Workpapers
Exams
My progress

IFRS 11Workpapers (Step 4 of 5)

Workpaper template

Step 4 of 5
WorkpaperIFRS 11 — Joint ArrangementsL2 · L3 · L4

Accounting of the joint operator: share of assets, liabilities, revenues and expenses, transactions with the joint operation, acquisition of an interest and separate financial statements

4 missions10 sections to document75 min
Prepared by
AI-assisted draft
Reviewed by
Not reviewed — human review required
Status
Published

Objective of the workpaper

List the assets, liabilities, revenues and expenses of the joint operation and the operator's share of each item, then compute each share, total revenue and the gain recognised on a sale to the joint operation. Shares come from the arrangement (agreed rights and obligations), not necessarily from capital: they are case data. The standard that applies to each item remains the one for that item (property, leases, revenue).

10 sections · 42 blocks · 6 calculations · 5 entries

  • IFRS 11 §20
  • IFRS 11 §21
  • IFRS 11 §23

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

4 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity
Joint operator: share of assets, liabilities, revenues and expenses, sale of output, lease liability and party without joint control
Case tasks documented here
  • What is the type of arrangement, who has joint control, and what is the position of Pelvane?
  • Compute the share of Larzac in the asset held jointly.
  • Compute the share of Larzac in the expense incurred jointly.
  • Compute the share of Larzac in the revenue from the sale of output by the joint operation.
  • On what basis should the revenue from the sale of Larzac’s own output be recognised: entitlement to output or transfer to customers?
  • Compute the total revenue of Larzac.
  • Who recognises the liability of the compressor lease, and for what amount?
  • Pelvane: compute its share of the expense incurred jointly.
  • Which standard applies to each asset, liability, revenue and expense of Larzac?
  • Record the share of the asset held jointly.
  • Record the share of the expense incurred jointly.
  • Record the revenue from the sale of own output.
  • Record the share of the revenue from the sale of output by the joint operation.
1

Facts and data

Inputs

  • Joint operation: parties, agreed rights and obligations, standard applicable to each item

    TextRequired

    PIPELINE_RUN_BY_CONTRACT_WITHOUT_COMPANY_SHARES_FIXED_FOR_EACH_ITEM

  • Asset held jointly (amount of the joint operation)

    Number

    6,000,000

  • Operator's share of the asset (%)

    Number

    40 %

  • Expense incurred jointly (amount of the joint operation)

    Number

    900,000

  • Operator's share of the expense (%)

    Number

    45 %

  • Revenue from the sale of output by the joint operation

    Number

    1,200,000

  • Operator's share of this revenue (%)

    Number

    40 %

  • Revenue from the operator's own sale of its share of output (measured under IFRS 15)

    Number

    900,000

  • Total gain made on the sale of an asset to the joint operation

    Number

  • Share of the other parties in the joint operation (%)

    Number

  • Cash received for the other parties' share

    Number

  • Carrying amount of the asset corresponding to the other parties' share

    Number

  • Lease liability recognised by the party primarily responsible (contract signed in its own name only)

    Number

    300,000

  • Interest held before in the joint operation, without joint control (%)

    Number

  • Interest acquired giving joint control (%)

    Number

  • Price paid for the interest acquired

    Number

  • Joint operation acquired: processes and inputs, business qualification

    Text

  • Liabilities of the joint operation: party to the contract, primary obligation

    Text

    LEASE_SIGNED_BY_LARZAC_ALONE_IN_ITS_OWN_NAME

  • Output: entitlement of the operator, quantities transferred to customers in the period

    Text

    ENTITLEMENT_FORTY_THOUSAND_UNITS_FORTY_THREE_THOUSAND_RECEIVED_THIRTY_SIX_THOUSAND_DELIVERED_TO_CUSTOMERS

2

Supporting documents

Evidence

  • Documents obtained and referenced (arrangement, statements of the joint operation, sales contracts, asset register)

    EvidenceRequired

3

Analysis of the joint operator accounting

Analysis

IFRS 11 §20IFRS 11 §21IFRS 11 §23IFRS 11IFRS 11IFRS 11

  • Points examined: joint operator accounting

    ChecklistRequired

    • Share of jointly held assets and own assets
    • Share of jointly incurred liabilities and own liabilities
    • Revenue from the sale of the share of output
    • Share of the revenue from the sale of output by the joint operation
    • Share of jointly incurred expenses and own expenses
    • Standard applicable to each asset, liability, revenue and expense
    • Party without joint control: same accounting if it has rights to the assets and obligations for the liabilities
    • Transactions with the joint operation: gain limited to the interests of the other parties
    • Acquisition of an interest in a joint operation that is a business: IFRS 3 principles
    • Separate financial statements: same accounting as in the consolidated statements
    • Interest held before not remeasured when the entity obtains joint control of a joint operation that is a business
4

Calculations

Calculations

IFRS 11 §20

  • Share of the asset (asset × share)

    Calculation

    2,400,000

    Asset held jointly (amount of the joint operation) ; Operator's share of the asset (%)

  • Share of the expense (expense × share)

    Calculation

    405,000

    Expense incurred jointly (amount of the joint operation) ; Operator's share of the expense (%)

  • Share of the revenue of the joint operation (revenue × share)

    Calculation

    480,000

    Revenue from the sale of output by the joint operation ; Operator's share of this revenue (%)

  • Total revenue of the operator (sale of its share + share of the revenue of the joint operation)

    Calculation

    1,380,000

    Revenue from the operator's own sale of its share of output (measured under IFRS 15) ; Share of the revenue of the joint operation (revenue × share)

  • Gain recognised on the sale to the joint operation (total gain × share of the other parties)

    Calculation

    Total gain made on the sale of an asset to the joint operation ; Share of the other parties in the joint operation (%)

  • Gain not recognised (total gain − gain recognised)

    Calculation

    0

    Total gain made on the sale of an asset to the joint operation ; − Gain recognised on the sale to the joint operation (total gain × share of the other parties)

5

Illustrative entries

Entries

  • Entry: share of a jointly held asset

    Entry

    AccountDebitCredit
    Share of the asset held jointly2,400,000
    Joint liability (share)2,400,000

  • Entry: share of an expense incurred jointly

    Entry

    AccountDebitCredit
    Share of the expense405,000
    Joint liability (share)405,000

  • Entry: revenue from the sale of the share of output

    Entry

    AccountDebitCredit
    Cash received from customers900,000
    Revenue from the sale of the share of output900,000

  • Entry: share of the revenue from the sale by the joint operation

    Entry

    AccountDebitCredit
    Cash received480,000
    Share of the revenue of the joint operation480,000

  • Entry: sale of an asset to the joint operation, gain limited to the other parties

    Entry

    Debit Cash received (other parties' share) ← Cash received for the other parties' share ; Credit Asset transferred (other parties' share) ← Carrying amount of the asset corresponding to the other parties' share ; Credit Gain recognised on the sale ← Gain recognised on the sale to the joint operation (total gain × share of the other parties)

6

Judgments: business qualification, primary obligation, entitlement to output

Judgment

IFRS 11 §20IFRS 11 §21IFRS 11 §23IFRS 11IFRS 11IFRS 11

  • Joint operation acquired: business or not

    Judgment

    Business / Not a business / Not applicable

    Professional judgment: the business qualification belongs to IFRS 3; the principles of that standard apply to the interest acquired only if the joint operation is a business.

  • Rationale: processes, inputs and output of the activity

    Text

  • Liability contracted: party to the contract, primarily liable

    Judgment

    Primarily liable: liability recognised in full

    Primarily liable: liability recognised in full / Not primarily liable / Not applicable

  • Rationale: contract entered into and liability

    Text

    SOLE_PARTY_TO_THE_LEASE_WITH_THE_LESSOR

  • Revenue from the sale of output: transfer to customers or entitlement to output

    Judgment

    Revenue reflecting the transfer of output to customers

    Revenue reflecting the transfer of output to customers / Revenue based on the entitlement to output / Not applicable

    Professional judgment: when the output received differs from the operator's entitlement, revenue reflects the transfer of output to its customers for each period, under IFRS 15.

  • Rationale: output transferred in the period

    Text

    REVENUE_REFLECTS_THE_OUTPUT_TRANSFERRED_TO_CUSTOMERS_IN_THE_PERIOD

7

Items to document for the disclosures on joint operations

Disclosure

IFRS 11 §20IFRS 11 §21

  • Information to prepare on joint operations

    Checklist

    • Nature of the interest and relationship with the other parties
    • Judgments that led to the classification as a joint operation
8

Effect on the financial statements

FS impact

  • Effect derived from the entries

    Table

9

Conclusion

Conclusion

  • Items recognised by the joint operator, standard applicable to each, treatment of transactions with the joint operation and judgments retained

    ConclusionRequired

10

Normative references

References

  • Normative references cited in this workpaper

    References

11

Checks and financial statement impact

  • Joint operation describedPass
  • Asset share entry balancedPass
  • Expense share entry balancedPass
  • Own revenue entry balancedPass
  • Revenue share entry balancedPass
  • Sale to the joint operation entry balancedNot evaluated
  • Gain recognised (share of the other parties) no greater than the total gain on the saleNot evaluated
Assets
3,780,000
Liabilities
2,805,000
Profit or loss
975,000
OCI
0
Equity
975,000