FRS 102 - Section 14 Summary – Investment in Associates Summary. How to Account for Joint Ventures. Joint ventures (JVs) are accounted for using equity accounting (same as associates) but also occasionally using the proportional consolidation method. The accounting for a joint venture depends upon the level of control exercised over the venture. An associate is an entity over which the investor has significant influence and which is not a subsidiary or a joint venture … The nature of the joint venture accounting depends on whether … [FRS 102 paras 15.3–15.8]. How does FRS 102 impact investment property on the financial statement? Section 14 defines what an associate is, how it should be recognised, measured, derecognised and disclosed. In this article, we address the concept of significant influence, as well as how to account for an investment in a joint venture using the equity method. FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. [IFRS 11 para 24]. How does FRS 102 impact the allocation of impairment loss? Reporting Standard applicable to the Micro-entities Regime, must adopt FRS 102 for accounting periods starting on or after 1 January 2016 (although early adoption was permissible). This guide will walk you through the basics of JV accounting. Old GAAP also required disclosure on the face of the balance sheet of the assets and liabilities of the associate to be shown, under FRS 102, the net figure need only be shown on the face of the balance sheet. What impact does FRS 102 have on goodwill? Accounting for joint ventures. FRS 116 Leases Amendments to FRS 110 Consolidated Financial Statements and FRS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Amendments to FRS 102 Share-based Payment: Classification and Measurement of Share-based Payment Transactions If a significant amount of control is exercised, the equity method of accounting must be used. Joint venture accounting is used when two or more businesses want to carry out a business venture together under a joint venture agreement. Organisation of FRS 102 (vi) FRS 102 is organised by topic with each topic presented in a separate numbered section. FRS 102 contains a section specifically for small companies referred to as section 1A ‘Small Entities’, which was first introduced into the September 2015 edition of (vii) Terms defined in the Glossary are in bold type the first time they appear in each section, and sub-section within Section 34. Liabilities. It is similar in nature to a partnership except that the businesses form the joint venture for a specific business transaction, and once that transaction is completed the joint venture ends.. FRS 102 applies to accounting periods beginning on or after 1 January 2015. Associates and joint venture accounting is an important topic for financial analysts to understand. What impact does FRS 102 have on the valuation of non-specialised property? Early application is permitted for accounting periods ending on or after ... example, if it is an associate or a joint venture), it does not meet the definition of a qualifying entity and cannot use the reduced disclosure exemptions in FRS 102. Under IFRS 11, a joint venturer accounts for its interest in a joint venture using the equity method in accordance with IAS 28, unless it is exempted from doing so by that standard. 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