The standard applicable to each item

Learning objectives

• Determine the Standard applicable to each asset, liability, revenue or expense recognised by the joint operator (for example IFRS 15 for revenue).L2, L3
• Justify the treatment of an item of a joint operation by reference to the Standard applicable to that item.L3

Normative references

• IFRS 11 §21A joint operator accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the IFRSs applicable to those particular assets, liabilities, revenues and expenses.

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

4 questions

• Which standard does a joint operator apply to account for the assets, liabilities, revenues and expenses relating to its interest in a joint operation?L2
• Orca SA, a joint operator of a joint operation, recognises its share of an industrial installation held jointly, which is an item of property, plant and equipment (case facts). Which standard governs the measurement of this share of the asset?L2
• Orca SA is a joint operator. It must justify the treatment of three items of its interest in a joint operation: (a) its share of an industrial installation, (b) its revenue from selling its share of the output to customers, (c) a provision for the restoration of a site for which it is jointly responsible (case facts). Write a short justification that links each item to the applicable standard, distinguishing rule, case facts and professional judgement.L3
• Orca SA, a joint operator, is entitled to 50% of the output of a joint operation. During the period it received more output than its entitlement and sold part of what it received to its customers (case facts). On what basis does it recognise its revenue for the period, in light of the Interpretations Committee's 2019 decision?L3