CERTYNEX IFRS ACADEMY

Orca SA, a joint operator, is the principal lessee under a lease of equipment used by the joint operation; the other parties reimburse it for their share of the lease payments (case facts). What is concluded in light of the Interpretations Committee's 2019 decision on a joint operator's liabilities?

Orca recognises the liability for which it is primarily responsible as principal lessee, and does not limit itself to the share that falls to it.

Orca recognises its share of the lease payments, the part reimbursed by the other parties being excluded from its liabilities because of that reimbursement expected from the other parties.

Orca recognises nothing until the joint operation has paid the first lease payment, the liability then belonging to the joint operation.

The liability is recognised by the joint operation, in which Orca holds an interest that it equity accounts in its own books.