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    This document provides an overview of Module 2 which covers joint arrangements. It defines a joint arrangement as an agreement where two or more parties have joint control. The module differentiates between two types of joint arrangements: joint operations and joint ventures. It states that joint operations give the parties control over the assets and liabilities of the arrangement, while joint ventures give the parties control over the equity. The document outlines learning activities for understanding the accounting treatment of each type of joint arrangement.

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    This document provides an overview of Module 2 which covers joint arrangements. It defines a joint arrangement as an agreement where two or more parties have joint control. The module differentiates between two types of joint arrangements: joint operations and joint ventures. It states that joint operations give the parties control over the assets and liabilities of the arrangement, while joint ventures give the parties control over the equity. The document outlines learning activities for understanding the accounting treatment of each type of joint arrangement.

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    © All Rights Reserved
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    177 views5 pages

    Module 2 - Joint Arrangements

    Uploaded by

    Potato Commissioner
    This document provides an overview of Module 2 which covers joint arrangements. It defines a joint arrangement as an agreement where two or more parties have joint control. The module differentiates between two types of joint arrangements: joint operations and joint ventures. It states that joint operations give the parties control over the assets and liabilities of the arrangement, while joint ventures give the parties control over the equity. The document outlines learning activities for understanding the accounting treatment of each type of joint arrangement.

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    © All Rights Reserved
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    of 5

    MODULE 2

    JOINT ARRANGEMENTS

    INTRODUCTION
    PFRS 11 defines Joint Arrangement as an arrangement where two or more persons have joint control. In
    this module, you will learn about the types of Joint Arrangement, the difference of those types and the
    accounting for such transactions. For this module, the relevant standards are PFRS 11 Joint Arrangements,
    PAS 28 Investments in Associates and Joint Ventures and Section 15 of the PFRS for SMEs.

    LEARNING OUTCOMES
    At the end of the module, you should be able to:
    5. Define a joint arrangement and state its characteristics.
    6. Differentiate between a joint operation and a joint venture.
    7. Account for joint operations.
    8. Describe the accounting requirements for joint ventures

    ACTIVITIES AND RESOURCES


    Self-directed and reflective learning characterize this printed modular approach in this subject. You are
    expected to read concepts and answer the exercises in the prescribed textbook. You will also encounter
    reflective exercise and we will have weekly wrap-up and consultation meetings to strengthen your
    knowledge and skills acquired from reading and doing learning activities. You will submit your outputs at
    designated pick-up points or using the communication channels available to you on a specified date and
    time.

    TOPIC 2.1 TYPES OF JOINT ARRANGEMENT


    There are two essential elements of a Joint Arrangement and that is there must be a contractual
    arrangement between the parties and that at least two of these persons have joint control to a joint
    arrangement. These two elements are particularly important in better understanding what a Joint
    Arrangement is. Now, after learning about the elements of a Joint Arrangement, we go to the two types
    of Joint Arrangements, Joint Operations and Joint Ventures. The main difference between the two is on
    which side of the balance sheet the parties of the Joint Arrangement have control over, if its control over
    Assets and Liabilities then it is a Joint Operation while if it is Control over the equity then it is a Joint
    Venture. It is important to understand this because the two types have significantly different accounting
    procedures.

    Accounting for Special Transactions


    19
    Related Standards:
    PFRS 11 Joint Arrangements
    PAS 28 Investments in Associates and Joint Ventures

    To better understand this topic, do the learning activities below:

    LEARNING ACTIVITY 2.1.1

    Concept-building
    Read the concepts and study the illustrative cases about Joint Arrangements and how to
    determine its type on pages 195- 204 of your textbook.

    LEARNING ACTIVITY 2.1.2

    Concept-review
    To validate your understanding of the concepts learned from reading activity, answer the
    following:
    True or False exercise on page 235
    Multiple-choice Theory on pages 236-238

    TOPIC 2.2 ACCOUNTING FOR JOINT OPERATION


    In the previous sub-topic, you have learned about the two types of Joint Arrangement. In this sub-topic,
    you will delve deeper into the first type which is Joint Operation and how you will account for this
    transaction. In Joint Operation, separate books may or not be used and you will understand how to
    account for both in this sub-topic.

    Refer to the learning activities below to have a better understanding of the topic.

    LEARNING ACTIVITY 2.2.1

    Concept-building
    Read the concepts and study the illustrative cases about Joint Operations on pages 205- 230
    of your textbook.

    Accounting for Special Transactions


    20
    LEARNING ACTIVITY 2.2.2

    Concept-application
    To apply the concepts and engage on some simulations on how to account for Joint
    Oprerations, do the following:
    Solve problem on pages - 238-239
    Answer multiple choice - 239-243

    TOPIC 2.3 JOINT VENTURE


    Accounting for Joint Venture will serve as a review of your Intermediate Accounting as it uses the same
    method of accounting for Investment in Associates.

    Refer to the learning activities below to have a better understanding of the topic.

    LEARNING ACTIVITY 2.3

    Concept-building

    Read the concepts and study the illustrative cases about Joint Ventures on pages 229- 230 of
    your textbook and review your Intermediate Accounting.

    LEARNING ACTIVITY 2.4.1

    Concept-building

    Read the relevant provisions of the PFRS for SMEs particularly Section 15 Investment in Joint
    Ventures.

    LEARNING ACTIVITY 2.4.2

    Concept-review
    To validate your understanding of the concepts learned from reading activity, answer the
    following:
    Multiple-choice Theory on pages 244-247

    Accounting for Special Transactions


    21
    ASSESSMENT
    Formative assessments are non-graded assessments but aim to validate the concepts learned from
    reading activity. This is important for you to have a strong foundation and knowledge of the concepts. So
    make the most of this module, your textbook and most important in this course. Your textbook provides
    an opportunity for you to review and apply your time. Answer as many as you can the exercises and
    problems in your textbook.

    Summative assessments form part of your final grade in this course. In this module, these are your quizzes
    and submissions of the following:
    at least 10 answered items from the concept-review
    at least 10 answered items from concept-application (show your solutions)

    Submission of more than the minimum numbers will be given extra points.

    Major exams are likewise graded. Place and time will be announced.

    Accounting for Special Transactions


    22
    WRAP-UP AND CONSULTATION

    Before this session, answer the following questions:

    What you have learned the most in this module?


    ______________________________________________________________________
    ______________________________________________________________________
    ______________________________________________________________________
    ______________________________________________________________________
    ______________________________________________________________________
    ______________________________________________________________________
    _____
    What topics need further discussions?
    ______________________________________________________________________
    ______________________________________________________________________
    ______________________________________________________________________
    ______________________________________________________________________
    ______________________________________________________________________
    ______________________________________________________________________
    _____

    KEY TAKEAWAYS
    For mastery of key concepts on consolidated financial statements, read chapter summary on page 231
    of your textbook

    REFERENCE
    Millan, Z. (2020). Accounting for special transactions (advanced accounting 1). Bandolin
    Enterprise

    Accounting for Special Transactions


    23

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