International GAAP® 2019: Generally Accepted Accounting Practice under International Financial Reporting Standards
Page 994
conflict between IAS 28 and IFRS 10, Ch. 7,
determining the relevant IFRS, Ch. 12, 6.3
3.3.2, 7.1; Ch. 11, 7.6.5.C
interest in a joint operation without joint control, Ch. 12,
practical application, Ch. 11, 7.6.5.B
6.4
elimination of ‘upstream’ and ‘downstream’
not structured through a separate vehicle, Ch. 12, 6.1
transactions, Ch. 11, 7.6.1
in separate financial statements, Ch. 12, 6.7
loans and borrowings between the reporting entity,
transactions between a joint operator and a joint operation,
Ch. 11, 7.6.3
Ch. 12, 6.6
reciprocal interests, Ch. 11, 7.6.2
with a party that participates in a joint arrangement but
statement of cash flows, Ch. 11, 7.6.4
does not have joint control, Ch. 12, 6.5
classification as held for sale (IFRS 5), Ch. 11, 6
accounting for joint ventures, Ch. 12, 7
definitions, Ch. 11, 3
contributions of non-monetary assets to a joint venture,
disclosures, Ch. 11, 10.2
Ch. 12, 7.2
exemptions from applying the equity method, Ch. 11, 5.3
interest in a joint venture without joint control, Ch. 12, 7.1
investments held in associates/joint ventures held by
in separate financial statements, Ch. 12, 7.3
venture capital organisations, Ch. 11, 5.3
applications to joint arrangements held for sale, Ch. 12, 2.3.2
application of IFRS 9 to exempt, Ch. 11, 5.3.2
classification of, Ch. 12, 5
designation of investments as ‘at fair value through
contractual terms, Ch. 12, 5.3
profit or loss’, Ch. 11, 5.3.2.B
facts and circumstances, Ch. 12, 5.4
entities with a mix of activities, Ch. 11, 5.3.2.A
illustrative examples, Ch. 12, 5.5
application of IFRS 9 to exempt investments in
legal form of the separate vehicle, Ch. 12, 5.2
associates or joint ventures, Ch. 11, 5.3.2
separate vehicle or not, Ch. 12, 5.1
investment entities exception, Ch. 11, 5.3.1
continuous assessment, Ch. 12, 8
future developments, Ch. 11, 11
changes in ownership of a joint arrangement that is not a
impairment losses, Ch. 11, 8
business, Ch. 12, 8.4
objective, Ch. 11, 2.1
joint operator obtains control, Ch. 12, 8.4.1
parents exempt from preparing consolidated financial
parties that participate in a joint arrangement but do
statements, Ch. 11, 5.1
not have joint control obtain joint control, Ch. 12,
partial use of fair value measurement of associates, Ch. 11, 5.4
8.4.1
presentation, Ch. 11, 10.1
single-asset subsidiary becomes joint venture or joint
other items of comprehensive income, Ch. 11, 10.1.3
operation, Ch. 12, 8.4.2
profit/loss, Ch. 11, 10.1.2
changes in ownership of a joint operation that is a
statement of cash flows, Ch. 11, 10.1.4
business, Ch. 12, 8.3
statement of financial position, Ch. 11, 10.1.1
acquisition of an interest in, Ch. 12, 8.3.1
scope, Ch. 11, 2.2
control or joint control over a former joint operation,
separate financial statements, Ch. 11, 9
Ch. 12, 8.3.2
significant influence, Ch. 11, 4
disposal of interest in, Ch. 12, 8.3.5
holdings of less than 20% of the voting power,
former subsidiary becomes, Ch. 12, 8.3.3
Ch. 11, 4.2
other changes in ownership of, Ch. 12, 8.3.4
lack of, Ch. 11, 4.1
changes in ownership of a joint venture that is a business,
potential voting rights, Ch. 11, 4.3
Ch. 12, 8.2
voting rights held in a fiduciary capacity, Ch. 11, 4.4
acquisition of an interest, Ch. 12, 8.2.1
subsidiaries meeting certain criteria, Ch. 11, 5.2
becomes a financial asset (or vice versa), Ch. 12, 8.2.5
becomes an associate (or vice versa), Ch. 12, 8.2.4
Investments in subsidiaries, associates and joint ventures,
control over a former joint venture, Ch. 12, 8.2.2
Ch. 8.2.1, Ch. 20, 12.4
Index
181
disposal of interest in, Ch. 12, 8.2.6
Joint ventures. See also IAS 28– Investments in associates and joint
former subsidiary becomes a joint venture, Ch. 7,
ventures
3.3.2, 7.1; Ch. 12, 8.2.3
accounting for, Ch. 12, 7
interest in a joint venture held for sale, Ch. 12, 8.2.7
contributions of non-monetary assets to a joint venture,
when to reassess under IFRS 11, Ch. 12, 8.1
Ch. 12, 7.2
definition of, Ch. 12, 3; Ch. 13, 2.2.2.B
interest in a joint venture without joint control, Ch. 12,
disclosures, Ch. 12, 9
7.1
guarantees, Ch. 12, 5.3.1
in separate financial statements, Ch. 8, 1.1.1; Ch. 12, 7.3
nature of, Ch. 12, 1.1
cash flows, Ch. 36, 6.4
objective, Ch. 12, 2.2
arising from interests in, Ch. 36, 8.4
scope, Ch. 12, 2.3
cash flows of joint operations, Ch. 36, 6.4.2
application by venture capital organisations and similar
investments in associates and joint ventures, Ch. 36, 6.4.1
entities, Ch. 12, 2.3.1
changes in ownership, Ch. 12, 8.2
application to joint arrangements held for sale, Ch. 12,
disclosure of commitments relating to, Ch. 13, 5.2.1
2.3.2
disclosure of contingent liabilities relating to, Ch. 13, 5.2.2
unit of account, Ch. 12, 3.1
equity transactions in, Ch. 11, 7.11
Joint control, Ch. 12, 4
FVLCD for investments in, Ch. 20, 12.4.1
assessing in extractive industries, Ch. 39, 7.1.1
initial carrying amount of an associate/joint venture, Ch. 11,
meaning of unanimous consent, Ch. 39, 7.1.1.B
7.4
relevant activities, Ch. 39, 7.1.1.A
following loss of control of an entity, Ch. 7, 3.3.2, 7.1;
practical issues with assessing, Ch. 12, 4.4
Ch. 11, 7.4.1
evaluate multiple agreements together, Ch. 12, 4.4.2
piecemeal acquisition, Ch. 11, 7.4.2
undivided share/lease/joint arrangement, Ch. 12, 4.4.1
existing associate that becomes a joint venture, or vice
rights to control collectively, Ch. 12, 4.2
versa, Ch. 11, 7.4.2.C
de facto agents, Ch. 12, 4.2.5
financial instrument becoming an associate/joint
delegated decision-making, Ch. 12, 4.2.4
venture, Ch. 11, 7.4.2.A
evidence of, Ch. 12, 4.2.3
step increase in an existing associate/joint venture
government, role of, Ch. 12, 4.2.6
without a change in status of the investee, Ch. 11,
potential voting rights and joint control, Ch. 12, 4.2.2
7.4.2.B
protective rights, including some veto rights, Ch. 12, 4.2.1
implications of controlling, Ch. 39, 7.1.2.B
sequential activities in, Ch. 12, 4.1.1
investments held in, Ch. 11, 5.3
unanimous consent, Ch. 12, 4.3
loans and borrowings between the reporting entity and,
&nb
sp; arbitration, Ch. 12, 4.3.3
Ch. 11, 7.6.3
arrangements involving passive investors, Ch. 12, 4.3.1
risks associated with interests in, Ch. 13, 5.2
ultimate voting authority, Ch. 12, 4.3.2
separate financial statements and interests in, Ch. 8, 1.1.1
Joint operating agreement (JOA), Ch. 39, 5.6, 17.3.3
share-based payments to employees of, Ch. 30, 12.9
transactions between the reporting entity and, Ch. 11, 7.6
Joint operations
VIU for investments in, calculating, Ch. 20, 12.4.2
accounting for, Ch. 12, 6
based on cash flows generated by underlying assets,
accounting for rights and obligations, Ch. 12, 6.2
Ch. 20, 12.4.2.B
determining the relevant IFRS, Ch. 12, 6.3
using dividend discount models, Ch. 20, 12.4.2.A
interest in a joint operation without joint control, Ch. 12,
6.4
Key management personnel, related party, Ch. 35, 2.2.1.D
not structured through a separate vehicle, Ch. 12, 6.1
Leases (IAS 17), Ch. 23, 1–9. See also IAS 17
in separate financial statements, Ch. 12, 6.7
classification, Ch. 23, 3.2
transactions between a joint operator and a joint operation,
changes to lease terms and provisions, Ch. 23, 3.2.3
Ch. 12, 6.6
determining the substance of transactions, Ch. 23, 3.2.2
with a party that participates in a joint arrangement but
finance lease, Ch. 23, 3.2.1
does not have joint control, Ch. 12, 6.5
operating lease, Ch. 23, 3.2.1
changes in ownership of, Ch. 12, 8.3
defined terms, Ch. 23, 3.4
acquisition of an interest in, Ch. 12, 8.3.1
contingent rents and embedded derivatives, Ch. 23, 3.4.7
control or joint control over a former joint operation,
contingent rents and operating leases, Ch. 23, 3.4.7.A
Ch. 12, 8.3.2
fair value, Ch. 23, 3.4.2
disposal of interest in, Ch. 12, 8.3.5
implicit interest rate and present value of minimum lease
former subsidiary becomes, Ch. 7, 3.3.3, 7.2; Ch. 12,
payments, calculation, Ch. 23, 3.4.9
8.3.3
inception and commencement of the lease, Ch. 23, 3.4.1
implications of controlling, Ch. 39, 7.1.2.A
initial direct costs, Ch. 23, 3.4.8
in separate financial statements, Ch. 8, 1.1.2
interest rate implicit in the lease and incremental
Joint products, extractive industries, Ch. 39, 14.2, 16.1.3.D
borrowing rate, Ch. 23, 3.4.5
lease term and non-cancellable period, Ch. 23, 3.4.4
Joint Transition Resource Group for Revenue Recognition
minimum lease payments, Ch. 23, 3.4.3
(TRG), Ch. 28, 2
182 Index
Leases (IAS 17) —contd
payments made in connection with the termination of
defined terms —contd
operating leases, Ch. 23, 5.3
residual value, Ch. 23, 3.4.6
compensation for loss of profits, Ch. 23, 5.3.1
residual value guarantors, Ch. 23, 3.4.6.A
sale and leaseback transactions, Ch. 23, 7
determining whether an arrangement contains a lease, Ch. 23,
including repurchase agreements and options, Ch. 23, 7.3
2.1
operating leaseback, Ch. 23, 7.2
arrangement conveys a right to use the item, Ch. 23, 2.1.3
sale and finance leaseback, Ch. 23, 7.1
disclosure requirements, Ch. 23, 2.1.7
sub-leases and back-to-back leases, Ch. 23, 8
fixed/current market prices and control of the asset, Ch.
intermediate party, Ch. 23, 8.1.2
23, 2.1.4
original lessor and the ultimate lessee, Ch. 23, 8.1.1
identification of an asset, Ch. 23, 2.1.1
terms of leases, modifying, Ch. 23, 6
parts of assets and the unit of account, Ch. 23, 2.1.2
IAS 17 and accounting for renegotiations, Ch. 23, 6.1
separation of leases from other payments within the
accounting for changes to the terms of operating leases,
arrangement, Ch. 23, 2.1.6
Ch. 23, 6.1.5
when to assess the arrangements, Ch. 23, 2.1.5
accounting for modifications to finance leases, Ch. 23,
transactions that are not, in substance, leases, Ch. 23, 2.2
6.1.3
accounting for assets and liabilities arising under the
accounting for reclassified leases, Ch. 23, 6.1.2
arrangement, Ch. 23, 2.2.2
determining whether there is a different classification,
arrangement, Ch. 23, 2.2.1
Ch. 23, 6.1.1
fee income, Ch. 23, 2.2.3
tax and interest variation clauses, Ch. 23, 6.1.4
presentation and disclosure requirements, Ch. 23,
transactions that are not, in substance, leases, Ch. 23, 2.2
2.2.4
accounting for assets and liabilities arising under the
disclosures required by IAS 17, Ch. 23, 9
arrangement, Ch. 23, 2.2.2
financial assets and liabilities, Ch. 23, 9.1
arrangement, Ch. 23, 2.2.2
by lessees, Ch. 23, 9.2
fee income, Ch. 23, 2.2.3
finance leases, Ch. 23, 9.2.1
presentation and disclosure requirements, Ch. 23, 2.2.4
operating leases, Ch. 23, 9.2.2
Leases (IFRS 16), Ch. 24, 1–10. See also IFRS 16
by lessors, Ch. 23, 9.3
business combinations, Ch. 24, 9–9.2
of finance leases, Ch. 23, 9.3.1
acquiree in a business combination is a lessee, Ch. 24, 9.1
of operating leases, Ch. 23, 9.3.2
acquiree in a business combination is a lessor, Ch. 24, 9.2
finance leases, accounting for, Ch. 23, 4
commencement date of the lease, Ch. 24, 4.2
accounting by lessees, Ch. 23, 4.1
contract combinations, Ch. 24, 3.3
accounting by lessors, Ch. 23, 4.2
definition, Ch. 24, 3–3.3
manufacturer/dealer lessors, Ch. 23, 4.4
determining whether an arrangement contains a lease,
termination of finance leases, Ch. 23, 4.3
Ch. 24, 3.1
early termination by lessees, Ch. 23, 4.3.1.A
flowchart of the decision making process, Ch. 24,
early termination of finance leases for lessors, Ch. 23,
3.1.6
4.3.2.B
identified asset, Ch. 24, 3.1.2
impairment of lease receivables, Ch. 23, 4.3.2.A
joint arrangements, Ch. 24, 3.1.1
by lessees, Ch. 23, 4.3.1.A
reassessment of the contract, Ch. 24, 3.1.7
by lessors, Ch. 23, 4.3.2
right to direct the use of the identified asset, Ch. 24,
as financial instruments, Ch. 23, 3.5
3.1.5
land/finance/operating leases?, Ch. 23, 3.3
how and for what purpose the asset is used,
leases and investment properties, Ch. 23, 3.3.3
Ch. 24, 3.1.5.A
measurement and presentation of operating leases over
protective rights, Ch. 24, 3.1.5.D
land, Ch. 23, 3.3.1
relevant decisions about how and for what purpose
separating land and buildings, Ch. 23, 3.3.2
the asset is used are predetermined, Ch. 24,
operating leases, accounting for, Ch. 23, 5
3.1.5.B
in the financial statement
s of lessees, Ch. 23, 5.1
specifying the output of an asset before the period
lease incentives, Ch. 23, 5.1.4
of use, Ch. 24, 3.1.5.C
leases that include payments for services, Ch. 23, 5.1.1
right to obtain substantially all of the economic
notional/actual interest paid to lessors, Ch. 23, 5.1.3
benefits from use of the identified asset, Ch. 24,
onerous contracts, Ch. 23, 5.1.5
3.1.4
straight-line recognition over the lease term, Ch. 23,
substantive substitution rights, Ch. 24, 3.1.3
5.1.2
identifying and separating lease and non-lease components
operating leases in the financial statements of lessors,
of a contract, Ch. 24, 3.2
Ch. 23, 5.2
determining and allocating the consideration in the
accounting for assets subject to operating leases,
contract–lessees, Ch. 24, 3.2.3
Ch. 23, 5.2.1
determining and allocating the consideration in the
lease incentives-accounting by lessors, Ch. 23, 5.2.2
contract–lessors, Ch. 24, 3.2.4
Index
183
identifying and separating lease components of a
leases of low-value assets, Ch. 24, 5.1.2
contract, Ch. 24, 3.2.1
short-term leases, Ch. 24, 5.1.1
identifying and separating lease from non-lease
lease modifications, Ch. 24, 5.5
components of a contract, Ch. 24, 3.2.2
resulting in a separate lease, Ch. 24, 5.5.1
lessee reimbursements, Ch. 24, 3.2.2.A
lessee accounting for a modification that does not
practical expedient–lessees, Ch. 24, 3.2.2.B
result in a separate lease, Ch. 24, 5.5.2
discount rates, Ch. 24, 4.6
lessee matters, Ch. 24, 5.6
determination of the incremental borrowing rate by a
impairment of right-of-use assets, Ch. 24, 5.6.1
subsidiary with centralised treasury functions, Ch. 24,
income tax accounting, Ch. 24, 5.6.4
4.6.1
leases denominated in a foreign currency, Ch. 24,
economic life, Ch. 24, 4.8
5.6.2
effective date and transition, Ch. 24, 10
portfolio approach, Ch. 24, 5.6.3
amounts previously recognised in a business combination,
presentation, Ch. 24, 5.7
Ch. 24, 10.5.2
remeasurement of lease liabilities and right-of-use assets,
disclosure, Ch. 24, 10.6
Ch. 24, 5.4
effective date, Ch. 24, 10.1
subsequent measurement, Ch. 24, 5.3
lessee transition, Ch. 24, 10.3
expense recognition, Ch. 24, 5.3.3
full retrospective approach, Ch. 24, 10.3.1
lease liabilities, Ch. 24, 5.3.2