Home › CA Final › financialreporting › Ind AS 111 — Joint Arrangements: Joint Control, Implicit/Explicit Joint Control, Protective Rights › Two parties to an arrangement bound by a contrac…
Two parties to an arrangement bound by a contract — Ind AS 111 applies when:
ABoth parties have joint control of the arrangement
BBoth parties hold equal voting rights, regardless of other arrangements
CEither party exercises significant influence
DAny party is exposed to variable returns
Answer & Solution
Correct answer: A. Both parties have joint control of the arrangement
Ind AS 111 requires (i) a contractual arrangement, and (ii) joint control by two or more of the parties to that arrangement. Significant influence (associate territory) is Ind AS 28, and exposure to variable returns alone is not control.
Related questions
Which of the following is the BEST characterisation of the difference between a joint operWhen classifying a joint arrangement structured through a separate vehicle as a joint operX Ltd. and Y Ltd. buy land jointly and divide it into 3 equal parts. X manages Part 1 alonABC Ltd. is 50:50 between AB and BC. AB appoints 3 directors and BC appoints 2 (board of 5Four investors A (10%), B (20%), C (30%), D (40%) — articles require majority voting for rRS Ltd. is formed by R (highway construction) and S (highway operation). R decides construEntity A and Entity B have unanimous-consent decision-making over relevant activities. TheDEF Ltd. is established by D, E and F. Unanimous consent of all three is required ONLY for