2011 kpmg ifrg limited a uk company limited by

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: provisions. In 2011 KPMG International Cooperative ("KPMG International"). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 2011 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved. Impact of IFRS: Oil and Gas 13 2011 KPMG International Cooperative ("KPMG International"). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. 2011 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved. 14 Impact of IFRS: Oil and Gas 5 Joint arrangements The term joint venture is a widely used operational term, although not all such arrangements are joint ventures for accounting purposes. A recently issued standard could significantly impact the accounting Determining whether an arrangement is a joint arrangement Companies need to review their arrangements to determine whether they should be accounted for as a joint arrangement Joint arrangements are a common way for oil and gas companies to share the risks and costs of exploration and production activities, and come in a variety of forms. Within the sector, the term joint venture is used widely as an all-encompassing operational expression to describe shared working arrangements. However, under IFRS there are strict criteria that must be met in order for joint arrangement accounting to be applied. For an arrangement to be a joint arrangement for accounting purposes there must be a contractual arrangement that gives joint control. Joint control is not determined by economic interest. Control is based on the contractual arrangements and exists when decisions about the relevant activities require the unanimous consent of more than one party to the arrangement. Companies must review their arrangements to determine whether joint control exists. When the company does not have joint control, the arrangement likely will be accounted for as an investment, subsidiary or associate. before the adoption o...
View Full Document

This note was uploaded on 12/03/2012 for the course ACCOUNTING 102-1132 taught by Professor Accountinggroup during the Fall '11 term at Al-Quds University.

Ask a homework question - tutors are online