a and b enter into a joint operation z which is contained in a separate vehicle each 611820

Joint operation with a non-controlling interest passive investor

A and B enter into a joint operation Z, which is contained in a separate vehicle. Each of the two entities owns 40% of the shares of the separate vehicle. The remaining 20% of Z is owned by C, which is not party to the joint agreement and is considered a passive investor. The legal form of the separate vehicle does not confer separation between the parties and the separate vehicle itself. That is, A and B have rights to the assets and obligations for the liabilities of Z (therefore, Z is a joint operation). Neither the contractual terms, nor the other facts and circumstances indicate otherwise. Accordingly, A, B and C recognise their assets, including their share of any assets held jointly, and their liabilities, including their share of any liabilities incurred jointly, in accordance with relevant IFRS.

In A’s financial statements, it recognises its assets, liabilities, revenues and expenses in Z, which would be 40% of Z’s assets, liabilities, revenues and expenses, in accordance with the relevant IFRS. A does not recognise a non-controlling interest related to Z.