IFRS Notes

Sale and purchase between venturer and joint venture


IAS 31-pr48
Venturer contributes or sells an asset to joint venture
Venturer's recognition of a gain or loss
should reflect the substance of transaction


IAS 31-pr49
Venturer purchases an asset from joint venture
Venturer does not recognise
its share of profit or loss from the transaction
until (1)

(1) when venturer sells the asset to independent party


SIC Interpretation 13
Issued in December 1998
Jointly controlled entities: non-monetary contributions by venturers

If venturer contributes a non-monetary asset to JCE,
and receives an equity interest in JCE,
venturer recognises only the portion of gain or loss
attributable to the interests of other venturers.

JCE: Jointly controlled entities

In the following cases,
venturer does not recognise gain or loss,
regard it as unrealised.

(1) transaction does not have commercial substance
(2) gain or loss cannot be reliably measured
(3) risks and rewards of ownership were not transferred