Separate statements: the interest in a joint operation

Learning objectives

• Determine the accounting for an interest in a joint operation in the separate financial statements of the joint operator.L2, L3
• Justify why the joint operator does not also recognise its shareholding in the separate vehicle.L3

Normative references

• IFRS 11 §26In its separate financial statements, a joint operator or joint venturer accounts for its interest in a joint operation in accordance with paras. 20 to 22, and for its interest in a joint venture in accordance with IAS 27 para. 10, which permits cost, IFRS 9 or the equity method described in IAS 28, the same method being applied to each category of investments.

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

2 questions

• In its separate financial statements, the joint operator recognises its shares of assets, liabilities, revenues and expenses, and in addition its interest in the separate vehicle, at cost or at fair value.L2
• Orca SA is a joint operator of a joint operation carried by a separate vehicle. In its consolidated statements, it recognises its shares of assets, liabilities, revenues and expenses. For its separate statements, its finance team proposes to additionally recognise its interest in the vehicle at cost (case facts). What is concluded in light of the Interpretations Committee's 2015 decision?L3