Joint operation is a type of a joint arrangement whereby the parties that have joint control have rights to net assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control over an economic activity, and exists when the strategic financial and operating decisions relating to the activity require a unanimous consent of the parties sharing control.
If an entity being a part of the Group participates in a joint operation, the Group, as a party to such operation, recognises the following in connection with its interest in such operation:
The Group accounts for the assets, liabilities, revenue and expenses relating to its interests in joint operations in accordance with the relevant IFRS related to individual components of the assets, liabilities, revenue and expenses. If a Group company enters into transactions with a joint operation to which a different entity not being part of the Group is a party, it is deemed that the Group entered into transactions with other parties to the joint operation, and gains and losses arising from the transactions are recognised in the Group’s consolidated financial statements only to the extent related to the interest of the other party in the joint operation.
If a Group company enters into a transaction involving joint operation to which a different Group company is a party, the Group does not recognise its share of profits or losses until the resale of those assets to a third party.
