Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 5 terms
A joint arrangement, under Ind AS 111, in which the parties sharing joint control have rights to the net assets of a separate vehicle — accounted for by the equity method.
The accounting sense is narrower than the everyday one. It is the classification that puts a whole business, its revenue and its borrowings behind a single line of profit in your accounts.
The treatment of an associate or joint venture under which the investment starts at cost and is then increased by the investor’s share of the investee’s profit, reduced by its share of losses, and reduced again by dividends received.
One post-tax line of profit and one line of carrying amount. No revenue, no assets, no borrowings and no interest cost from the investee reach your accounts at all.
A withdrawn treatment under which an investor included its percentage share of each line of a jointly controlled entity. Ind AS 111 removed it as an option for joint ventures, which are equity-accounted instead.
Worth knowing because older reports and a good deal of commentary still use the phrase. A joint operation looks similar on the face of the accounts but is a different thing: recognition of the party’s own assets and obligations, not a proportion of somebody else’s.
The amount at which an asset is stated on the balance sheet after deducting accumulated depreciation, amortisation, impairment or — for an equity-accounted investment — the investor’s share of losses.
For a loss-making associate or joint venture it acts as a floor at zero. Once it is exhausted, further losses stop being recognised, and reported profit improves with nothing having changed.
A joint arrangement in which each party has direct rights to the assets and direct obligations for the liabilities, so each recognises its own share of the assets, liabilities, revenue and expenses.
The case where "it is a joint venture, so the debt is off the balance sheet" is simply wrong. Unincorporated arrangements such as jointly held oil and gas exploration blocks commonly fall here.