Home › CA Final › financialreporting › Ind AS 111 — Joint Operation Accounting, Acquisition of Interest as Business & AS 27 vs Ind AS 111 › Under Ind AS 111, an entity classified an intere…
Under Ind AS 111, an entity classified an interest as a jointly controlled ENTITY under AS 27 and used proportionate consolidation. On Ind AS transition, the same entity holds rights to NET ASSETS (not to specific assets/liabilities). The Ind AS classification and method:
ASubsidiary; full consolidation
BJoint operation; line-by-line proportionate accounting
CFinancial asset; Ind AS 109
DJoint venture; EQUITY METHOD under Ind AS 28 (proportionate consolidation eliminated under Ind AS)
Answer & Solution
Correct answer: D. Joint venture; EQUITY METHOD under Ind AS 28 (proportionate consolidation eliminated under Ind AS)
The right-to-net-assets test classifies it as a joint venture under Ind AS 111. Joint ventures use equity method in consolidated FS. Proportionate consolidation is not available for joint ventures under Ind AS.
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