What the joint operator recognises

Learning objectives

• Identify the five items that a joint operator recognises in relation to its interest in a joint operation.L1, L2
• Calculate the share of the assets, liabilities, revenue and expenses of the joint operation recognised by the joint operator.L2, L3
• Record the share of an asset, a liability, an expense and revenue of a joint operation.L2, L3

Normative references

• IFRS 11 §20A joint operator recognises in relation to its interest in a joint operation: its assets, including its share of any assets held jointly; its liabilities, including its share of any liabilities incurred jointly; its revenue from the sale of its share of the output; its share of the revenue from the sale of the output by the joint operation; its expenses, including its share of any expenses incurred jointly.

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

4 questions

• Which items does a joint operator recognise in relation to its interest in a joint operation? More than one answer is possible.L2
• Orca SA and Pinson SA operate a refinery together, without a separate vehicle: it is a joint operation. Under the agreement, Orca has rights to {operator_share_percent} of the assets held jointly, while its share of the output is 60% (agreed shares: case data). The jointly held installations have a carrying amount of {joint_asset_amount}. Calculate the share of the jointly held assets that Orca recognises.L2
• Orca SA is a joint operator of a joint operation that has incurred {total_joint_expense} of maintenance expenses, owed to a service provider and borne jointly; Orca's share of those expenses is {operator_share_percent} (agreed share: case data). Case convention: the expense has not yet been paid. Record the entry recognising Orca's share of the expense.L2
• 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?L3