Committee decision of 2015: enforceable rights and obligations

Learning objectives

• Assess, in the light of the 2015 Committee decision, whether the facts of a case create enforceable rights to assets and legal or constructive obligations for liabilities.L3, L4

Normative references

• IFRS 11 §14An entity determines the type of joint arrangement in which it is involved: classification as a joint operation or a joint venture depends on the rights and obligations of the parties arising from the arrangement.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• Saturne SA is a party, with another company, to a joint arrangement structured through a separate vehicle. Its management argues, to classify it as a joint operation, that the arrangement was designed to supply it with the output, that it needs that output and that it has bought it for several years. No clause or fact gives it enforceable rights to the assets or legal or constructive obligations for the vehicle's liabilities (case facts). What is concluded in light of the Interpretations Committee's 2014-2015 decision?L3