In short
A joint venture is an entity jointly controlled by two or more venturers, none of whom controls it alone. The venturers usually account for their investments using the equity method.
Key takeaways
- Joint ventures formed on or after January 1, 2025 measure the assets and liabilities contributed at formation at fair value in their own statements.
- Joint control means major decisions need the consent of the venturers.
- A venturer with control consolidates instead.
Where it's tested
BAR: Business Combinations (Advanced) — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A parent owning 80% of a subsidiary purchases an additional 10% from noncontrolling shareholders for an amount exceeding the carrying value of the interest acquired. How is the excess recorded?