(IFRS) for Small and Medium-sized Entities (SMEs)

IFRS FOR SMES – JULY 2009Equity method15.13 A venturer shall measure its investments in jointly controlled entities by theequity method using the procedures in paragraph 14.8 (substituting ‘jointcontrol’ where that paragraph refers to ‘significant influence’).Fair value model15.14 When an investment in a jointly controlled entity is recognised initially, aventurer shall measure it at transaction price. Transaction price excludestransaction costs.15.15 At each reporting date, a venturer shall measure its investments in jointlycontrolled entities at fair value, with changes in fair value recognised in profit orloss, using the fair valuation guidance in paragraphs 11.27–11.32. A venturerusing the fair value model shall use the cost model for any investment in a jointlycontrolled entity for which it is impracticable to measure fair value reliablywithout undue cost or effort.Transactions between a venturer and a joint venture15.16 When a venturer contributes or sells assets to a joint venture, recognition of anyportion of a gain or loss from the transaction shall reflect the substance of thetransaction. While the assets are retained by the joint venture, and provided theventurer has transferred the significant risks and rewards of ownership, theventurer shall recognise only that portion of the gain or loss that is attributableto the interests of the other venturers. The venturer shall recognise the fullamount of any loss when the contribution or sale provides evidence of animpairment loss.15.17 When a venturer purchases assets from a joint venture, the venturer shall notrecognise its share of the profits of the joint venture from the transaction until itresells the assets to an independent party. A venturer shall recognise its share ofthe losses resulting from these transactions in the same way as profits except thatlosses shall be recognised immediately when they represent an impairment loss.If investor does not have joint control15.18 An investor in a joint venture that does not have joint control shall account forthat investment in accordance with Section 11 or, if it has significant influence inthe joint venture, in accordance with Section 14 Investments in Associates.Disclosures15.19 An investor in a joint venture shall disclose:(a)the accounting policy it uses for recognising its interests in jointlycontrolled entities.© IASCF 87