Construction and real estate sales A separate vehicle is established, over which two parties have joint control. Neither the legal form nor the contractual terms of the joint arrangement give the parties rights to the assets or obligations for the liabilities of the arrangement. Other facts and circumstances are as follows: the purpose of the joint arrangement is to construct a residential complex for selling […]

Shopping centre operated jointly Two real estate companies (the parties) set up a separate vehicle (entity X) for the purpose of acquiring and operating a shopping centre. The contractual arrangement between the parties establishes joint control of the activities that are conducted in entity X. The main feature of entity X’s legal form is that the entity, not the parties, has rights to the assets, […]

Joint manufacturing and distribution of a product Companies A and B (the parties) have set up a strategic and operating agreement (the framework agreement) in which they have agreed the terms according to which they will conduct the manufacturing and distribution of a product (product P) in different markets. The parties have agreed to conduct manufacturing and distribution activities by establishing joint arrangements, as described […]

Bank operated jointly Banks A and B (the parties) agreed to combine their corporate, investment banking, asset management and services activities by establishing a separate vehicle (bank C). Both parties expect the arrangement to benefit them in different ways. Bank A believes that the arrangement could enable it to achieve its strategic plans to increase its size, offering an opportunity to exploit its full potential […]

Oil and gas exploration, development and production activities Companies A and B (the parties) set up a separate vehicle (entity H) and a Joint Operating Agreement (JOA) to undertake oil and gas exploration, development and production activities in country O. The main feature of entity H’s legal form is that it causes the separate vehicle to be considered in its own right (i.e. the assets […]

Liquefied natural gas arrangement Company A owns an undeveloped gas field that contains substantial gas resources. Company A determines that the gas field will be economically viable only if the gas is sold to customers in overseas markets. To do so, a liquefied natural gas (LNG) facility must be built to liquefy the gas so that it can be transported by ship to the overseas […]

Joint arrangement with liability for the obligations of the arrangement A and B jointly establish an entity (C), which is considered a separate legal structure distinct from its members in the jurisdiction in which it is formed. This jurisdiction requires that such a legal structure has at least two partners but does not have any minimum capital requirements. A and B each have a 50 […]

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 […]

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 […]

Contribution of subsidiary to form a joint venture or an associate applying IFRS 10 A and B are two major pharmaceutical companies, which agree to form a joint venture (JV Co). A will own 40% of the joint venture, and B 60%. The parties agree that the total value of the new business of JV Co is £250 million. A”s contribution to the venture is […]