Professional Documents
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Chapter 1 Joint Arrangements & PE
Chapter 1 Joint Arrangements & PE
Joint arrangements
&
Public Enterprises
IFRS 11
Joint Arrangements
Introduction 3
can be flexible
Figure 1.1 : Assessing joint control
Example : Assessing joint control
Requirement:
Assess whether the arrangement gives all the parties
control of the arrangement collectively.
Example: Assessing joint control
Requirement
Assess whether the arrangement gives all the
parties control of the arrangement collectively.
10
Example: Assessing joint control
Solution
Even though D can block any decision, it does not control the
arrangement because it needs the agreement of either E or F.
In this example, D, E and F collectively control the
arrangement.
Solution
G and H have joint control of the arrangement
only if the contractual arrangement specifies
that decisions about the relevant activities of the
arrangement require both G and H agreeing.
Joint operation or Joint venture
No
Contractual Do the parties have contractual rights to
Joint Operation
terms the assets, and obligations for the Yes
liabilities?
No
Other Is the arrangement designed so:
a) Its activities primarily aim to provide Yes
parties with an output, and
(b) It depends on the parties for settling
liabilities?
No
Joint Venture
Example: Construction and real estate 15
PUBLIC Enterprises
1.2 PUBLIC Enterprises
Defn: are autonomous or semi-autonomous bodies
owned by the gov’t & engaged in providing services
and or products.
Background:
• The growth of public enterprises has been partly by
nationalization and partly through creation of new
ones.
– A supervising authority
– Designated by the Council of Ministers
– Ex: FDRE Public Financial Enterprises
Agency
– Management
– Necessary staff
Accounting for Public Enterprises
• Public enterprises are state owned, state controlled
business enterprises.
• They are characterized by public purpose, public
o/ship & control.
• Their accounting aspect is the same as business
accounting with minor differences in the owners’
equity section as there are no shares and
shareholders in PEs.
Capital Section of PEs
The following are the capital items in PEs
• State capital… original value of NAs of PE formed
• Formation
Assets……………………..xxxx
State Capital……………………..xxxx
• Operation
Income Summary…..xxx
Legal Reserve…….……. xxxx
Other Reserves…….……xxxx
State Dividend Payable.. xxxx
• Privatization
• Liquidation
DISSOLUTION AND WINDING-UP
Grounds for Dissolution.
• An enterprise may be dissolved for any one of the
following reasons:
1.The expiry of the life of the enterprise as fixed in its est. reg.;
2) Completion of the venture for which the enterprise was
established;