CERTYNEX IFRS ACADEMY

A colleague writes: "IFRS 11 says nothing about the share of profit, dividends or impairment of an interest in a joint venture; these topics therefore do not have to be examined for a joint venture." What is the error in this reasoning?

It forgets that IFRS 11 refers to IAS 28: the joint venturer applies the equity method, whose rules apply to its interest in the joint venture.

It forgets that these topics fall under IFRS 12, which sets the accounting for the share of profit and dividends of a joint venture.

It wrongly assumes that the share of profit is recognised at the end of each year without the interest being equity accounted.

It overlooks that dividends from a joint venture are recognised as income, impairment being ruled out for an interest of this kind in the joint venturer's statements.