Question bank — IFRS 11 — Joint Arrangements
53 questions in FR/EN/ES, scored by the real scoring engine.
The joint arrangement: an agreement with shared control3 questions
- Two companies each hold half of the capital of the same entity; this equal holding is enough to make the situation a joint arrangement under IFRS 11.True / falseL1
- What characterises a joint arrangement under IFRS 11?Single choiceL1
- Which statements about the notion of a joint arrangement are correct? More than one answer is possible.Multiple choiceL2
Joint control and unanimous consent3 questions
- Joint control exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.True / falseL1
- Alpha SA and Bêta SA each hold 50% of the capital of Gamma SA. Under the agreement, decisions about Gamma's relevant activities are taken by simple majority of the board seats, and Alpha holds 5 of the 9 seats (case data). What is concluded about joint control of Gamma?Single choiceL2
- Delta SA and Epsilon SA have entered into an agreement to operate a logistics platform together. The agreement provides that the annual budget, the choice of strategic customers and the appointment of the manager must be approved by both parties; other day-to-day decisions are delegated to the manager (case facts). Write a short justification stating whether the two parties have joint control, distinguishing rule, case facts and professional judgement.JudgmentL2
Collective control first, unanimity second3 questions
- What approach does a party follow to determine whether it has joint control of an arrangement?Single choiceL2Variant
- An analyst writes: "Decisions about Orion's relevant activities require the agreement of Pôle and Quai; there is therefore joint control, with no need to examine whether Pôle and Quai control Orion collectively." What is the error in this reasoning?Single choiceL2Variant
- Mer SA, Lac SA and Fleuve SA hold 40%, 35% and 25% respectively of the voting rights of Delta SA. Under the agreement, decisions about Delta's relevant activities are taken at 70% or more of the voting rights (decision rule: case data, not a threshold of the standard). Write a short note analysing which groups of parties can decide, whether one party can prevent the others from controlling, and what follows for joint control, distinguishing rule, case facts and professional judgement.JudgmentL3
Parties without joint control2 questions
- All the parties to a joint arrangement are joint operators or joint venturers, including those whose consent is not required for decisions about the relevant activities.True / falseL1
- A colleague writes: "Zéphyr SA holds 10% of a joint venture whose decisions about the relevant activities require the agreement of the two other parties, but not its own (case data); Zéphyr is therefore a joint venturer on the same footing as they are." What is the error in this reasoning?Single choiceL2
Decision rules and voting patterns2 questions
- Pic SA, Roc SA and Sol SA hold 34%, 33% and 33% respectively of the voting rights of Atlas SA. Under the agreement, decisions about the relevant activities are taken at 66% or more of the voting rights (decision rule: case data). Every combination of two parties reaches this threshold. What is concluded about joint control of Atlas?Single choiceL2
- Three parties hold 40 %, 35 % and 25 % of the voting rights of an arrangement respectively. Decisions about the relevant activities require at least 65 % of the voting rights, and the arrangement does not specify any combination of parties whose unanimous consent would be required (case facts). Is the arrangement a joint arrangement under IFRS 11?Single choiceL2
Classification by rights and obligations3 questions
- The classification of a joint arrangement as a joint operation or a joint venture depends on the rights and obligations of the parties arising from the arrangement.True / falseL1
- Which statements about the classification of joint arrangements are correct? More than one answer is possible.Multiple choiceL2
- Where a joint arrangement is housed in a separate company, it is classified as a joint venture, with no need to examine the rights and obligations of the parties.True / falseL2
No separate vehicle: a joint operation3 questions
- A joint arrangement that is not structured through a separate vehicle is a joint operation.True / falseL1Variant
- Rhône SA and Seine SA have joint control of a pipeline operation, governed by a contract that allocates the operation and the funding between them. No separate entity has been created to carry this operation (case facts). How is the joint arrangement classified?Single choiceL2Variant
- A colleague writes: "Without a separate vehicle, the North-South joint arrangement has no legal form to examine; we must therefore study its contractual terms and its other facts and circumstances before classifying it." What is the error in this reasoning?Single choiceL2
With a separate vehicle: three elements of analysis3 questions
- When a joint arrangement is structured through a separate vehicle, on what do the parties base its classification as a joint operation or a joint venture?Single choiceL2
- Which statements about the classification of a joint arrangement structured through a separate vehicle are correct? More than one answer is possible.Multiple choiceL2
- Cobalt SA and Dune SA create Éolia SAS, a separate vehicle that operates a wind farm. By its legal form, Éolia owns the turbines and is solely liable for its debts. The contractual arrangement nevertheless provides that Cobalt and Dune share all of Éolia's output equally and bear its expenses and debts equally (case facts). Write a short note justifying the classification of the joint arrangement, distinguishing rule, case facts and professional judgement, and dealing with the disagreement between legal form and contractual terms.JudgmentL3
The legal form of the vehicle2 questions
- A colleague writes: "The joint arrangement is housed in a public limited company, whose assets belong to the company and not to the parties; it is therefore a joint venture, with no need to read the contractual arrangement." What is the error in this reasoning?Single choiceL2
- Hélios SARL, a separate vehicle held by Alpha SA and Bêta SA, has a legal form that gives its members rights to its net assets and not to its assets taken one by one (case data). Examination of the contractual arrangement and of other facts and circumstances reveals nothing that modifies this situation (case data). What classification results?Single choiceL2
The terms of the contractual arrangement2 questions
- Which statements about the role of the terms of the contractual arrangement in classification are correct? More than one answer is possible.Multiple choiceL2
- Vega SA and Rigel SA have created Arion SA, a separate company whose legal form suggests rights to net assets. The contractual arrangement nevertheless provides that each party bears half of Arion's debts and receives half of its revenues and expenses (case facts). What is concluded about the role of the contractual terms?Single choiceL2
Committee decision of 2015: enforceable rights and obligations1 question
What the joint operator recognises3 questions
- Which items does a joint operator recognise in relation to its interest in a joint operation? More than one answer is possible.Multiple choiceL2
- 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 … 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 …. Calculate the share of the jointly held assets that Orca recognises.CalculationL2
- Orca SA is a joint operator of a joint operation that has incurred … of maintenance expenses, owed to a service provider and borne jointly; Orca's share of those expenses is … (agreed share: case data). Case convention: the expense has not yet been paid. Record the entry recognising Orca's share of the expense.Journal entryL2
The standard applicable to each item3 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?Single choiceL2
- 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?Single choiceL2
- 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.JudgmentL3
Party without joint control in a joint operation2 questions
- A party that takes part in a joint operation without having joint control accounts for its interest using the joint operator's rules where it has rights to the assets and obligations for the liabilities of the joint operation.True / falseL2
- Nova SA holds a 10% interest in a joint operation, without having joint control. The agreement gives it neither rights to the assets nor obligations for the liabilities of the joint operation (case facts). How does Nova account for its interest?Single choiceL2
Transactions with the joint operation: limited gain2 questions
- Orca SA, a joint operator, sells an item of equipment to the joint operation that it runs with other parties. The total gain on the sale is …. The other parties' interests in the joint operation represent … (case data). Calculate the gain recognised by Orca and the gain that is not recognised.CalculationL3Variant
- A colleague writes: "Orca, a joint operator, sells an item of equipment to the joint operation at a gain of 150,000; it recognises the whole gain, since the sale is made with an entity separate from itself." What is the error in this reasoning?Single choiceL2Variant
Acquiring an interest in a joint operation1 question
Previously held interests1 question
Decision of 2019: liabilities for which the operator is primarily liable1 question
Decision of 2019: sale of output1 question
The joint venture: the equity method3 questions
- A joint venturer accounts for its interest in a joint venture by including, line by line, its share of the joint venture's assets and liabilities in its own financial statements.True / falseL1
- Solis SA holds … of a joint venture accounted for using the equity method. Carrying amount at the beginning of the year: …. During the year, the joint venture reports a profit of …; Solis's share of its other comprehensive income is …; Solis receives … in dividends (case data). Case convention: no fair value adjustment or goodwill, no impairment. Calculate the share of profit and the closing carrying amount of the interest.CalculationL2Variant
- Delta SA holds … of a joint venture that it accounts for using the equity method. The joint venture distributes … in dividends, which Delta collects to the extent of its share (case data). Case convention: the dividend is collected on the day it is paid. Record the entry for the dividend received by Delta.Journal entryL2Variant
Party without joint control in a joint venture2 questions
- Kappa SA takes part in a joint venture without having joint control. It sits on the board and takes part in the joint venture's financial and operating policy decisions; the analysis of those facts concludes that it has significant influence (judgement established by the case). How does Kappa account for its interest?Single choiceL2Variant
- A colleague writes: "A party that does not have joint control of a joint venture applies IFRS 9 to its interest; it does not have to look for whether it has significant influence." What is the error in this reasoning?Single choiceL2Variant
Separate statements: the interest in a joint operation2 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.True / falseL2Variant
- 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?Single choiceL3Variant