The holdings on the VE Commercial Vehicles with 45,6 % and the cellcentric with 50% are classified as joint ventures within the Volvo Group. Please explain the difference between joint venture and joint operations. Is there a different accounting treatment for consolidation?

The holdings on the VE Commercial Vehicles with 45,6 % and the cellcentric with 50% are classified as joint ventures within the Volvo Group. Please explain the difference between joint venture and joint operations. Is there a different accounting treatment for consolidation?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

The holdings on the VE Commercial Vehicles with 45, 6% and the cellcentric with 50% are classified as
joint ventures within the Volvo Group. Please explain the difference between joint venture and joint
operations. Is there a different accounting treatment for consolidation?

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Step 1: Defining IFRS-11 - Joint Arrangement

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