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X Ltd. and Y Ltd. buy land jointly and divide it into 3 equal parts. X manages Part 1 alone (its own returns), Y manages Part 2 alone (its own returns); Part 3 is managed jointly with unanimous consent for both decisions and returns. Identify what is a joint arrangement under Ind AS 111.
AOnly Part 3 — the jointly managed land — is a joint arrangement. Parts 1 and 2 are not joint arrangements (each party controls its part)
BAll three parts are part of one joint arrangement
CNone of the parts are joint arrangements because the land is undivided initially
DParts 1 and 2 are joint arrangements; Part 3 is not
Answer & Solution
Correct answer: A. Only Part 3 — the jointly managed land — is a joint arrangement. Parts 1 and 2 are not joint arrangements (each party controls its part)
Joint control must be assessed per asset / per economic unit. Parts 1 and 2 are individually controlled (no joint control). Part 3 meets the unanimous-consent test and is the joint arrangement.
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