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

Context

Veltor Group SA (fictitious entity) is a joint operator of the Ormel terminal (40 %, by contract), acquires an interest in the Granit quarry and holds 25 % of Karval SAS. You prepare the 20X6 year-end note on the transactions with the joint operation, the acquisition, the separate financial statements and the classification.

Assignment

Sale to Ormel and acquisition of Granit

Purpose 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).

Questions of the file covered by this workpaper

• Sale to Ormel: to what extent can Veltor recognise the gain, and why?
• Compute the gain recognised on the sale.
• Compute the gain not recognised on the sale.
• Record the sale to the joint operation, limited to the share of the other parties.
• Granit: is the joint operation acquired a business, and which rules does the acquirer apply to its interest?
• Granit: what happens to the 10 % interest held before when Veltor obtains joint control?

• MemoGroup profile and case conventionsOpen
• ContractSale of an item of equipment to the Ormel joint operationOpen
• MemoAcquisition of an interest in the Granit quarryOpen
• ExtractKarval SAS: extract of the accounts and policy of the separate statementsOpen
• MemoNote of the chief financial officer on the classification of KarvalOpen
• InvoiceFinancial communication feesOpen