CERTYNEX IFRS ACADEMY

Rhône SA and Seine SA have joint control of a pipeline operation, governed by a contract that allocates the operation and the funding between them. No separate entity has been created to carry this operation (case facts). How is the joint arrangement classified?

As a joint venture, because the two parties share control and the results of the operation of the pipeline.

As a joint venture, because the contract creates in effect an entity whose net assets the parties hold, as in a company.

The classification remains undetermined until the parties have chosen the legal form of a vehicle.

As a joint operation, because the joint arrangement is not structured through a separate vehicle.