d and e establish a joint arrangement f using a separate vehicle but the legal form 611819

Accounting for rights to assets and obligations for liabilities

D and E establish a joint arrangement (F) using a separate vehicle, but the legal form of the separate vehicle does not confer separation between the parties and the separate vehicle itself. That is, D and E have rights to the assets and obligations for the liabilities of F (F is a joint operation). Neither the contractual terms, nor the other facts and circumstances indicate otherwise. Accordingly, D and E account for their rights to assets and their obligations for liabilities relating to F in accordance with relevant IFRS.

D and E each own 50% of the equity (e.g. shares) in F. However, the contractual terms of the joint arrangement state that D has the rights to all of Building No. 1 and the obligation to pay all the third party debt in F. D and E have rights to all other assets in F, and obligations for all other liabilities in F in proportion to their equity interests (i.e. 50%). F’s balance sheet is as follows (in CUs):

Under IFRS 11, D would record the following in its financial statements, to account for its rights to the assets in F and its obligations for the liabilities in F. This may differ from the amounts recorded using proportionate consolidation.

(1)Since D has the rights to all of Building No. 1, it records that amount in its entirety.

(2)D”s obligations arc for the third-party debt in its entirety.