Material joint arrangements and associates

Learning objectives

• Explain that the entity discloses the nature, extent and financial effects of its interests in joint arrangements and associates.L1
• Identify the disclosures required for a material joint venture or associate.L2

Normative references

• IFRS 12 §20The entity discloses information that enables users to evaluate the nature, extent and financial effects of its interests in joint arrangements and associates, including the nature and effects of its contractual relationship with the other investors, and the nature of, and changes in, the associated risks.
• IFRS 12 §21The entity discloses: (a) for each joint arrangement and associate that is material, the name, the nature of the relationship (for example, the nature of the activities and whether they are strategic), the principal place of business (and country of incorporation if different), the proportion of ownership interest or participating share held and, if different, the proportion of voting rights held; (b) for each material joint venture and associate, the measurement basis (equity method or fair value), summarised financial information (B12 and B13) and, if the equity method is used, the fair value of the investment if there is a quoted market price; (c) aggregated information (B16) about joint ventures and, separately, about associates that are not individually material. An investment entity is exempt from (b) and (c) (para. 21A).

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

4 questions

• For which interests does IFRS 12 require the name, nature of the relationship, principal place of business, ownership held, measurement method and summarised financial information?L1
• What information does IFRS 12 require for a material joint venture or associate? More than one answer is possible.L2
• Lys Group holds three interests: an associate Alpha and a joint venture Bêta, which management considers material, and an associate Gamma, considered not material (case facts, materiality judgement included). Write a short note stating the information to provide for each, distinguishing rule, case facts and professional judgement.L2
• What is the objective of the IFRS 12 disclosures on interests in joint arrangements and associates?L1