IASB (International Accounting Standard Board) does its annual exercise for finalizing/ accepting certain amendments in accounting standards. As a part of this improvement cycle, IASB recently has issued certain amendments in which we gonna now discuss about an amendment which has been made in IFRS-11 – JOINT ARRANGEMENTS (Indian standard Ind-As 111, however ICAI still to notify these changes for India) –
Recent change in IFRS-11 –
“A company does not remeasure its previously held interest in a joint operation when it obtains joint control of the business”
What does it mean for an entity:
A Joint operator (under Joint Operations as per IFRS-11/ Ind-As -111) when obtains a JOINT CONTROL which means a control ( control as per IFRS-10/Ind-As 110 which is not absolute but JOINT CONTROL) over a business activity & where two or more parties require JOINT CONSENT over any such decisions on relevant activities of the business then there is no need to REMEASURE previously held interest in the capacity as Joint Operator….
Becoming a JOINT CONTROLLER from existing joint- operator does not required any re-measurement because it is altogether different business economies between these two events…
IASB has stated that the such amendment is applicable from 1-1-2019 however earlier application is permitted.