Unlike joint ventures, IFRS 12 requires only limited quantitative disclosures for joint operations, including information about significant judgments and assumptions made in determining the classification of a joint arrangement that is structured through a separate entity. [IFRS 12 7 (c) and IFRS 12 21 (a)] Disclosures material joint operations
The classification of joint arrangements is discussed here. Disclosures material joint operations
BHP Annual Report 2018 [page 159] – Accounting policies:
Joint arrangements: The Group undertakes a number of business activities through joint arrangements, which exist when two or more parties have joint control. Joint arrangements are classified as either joint operations aor joint ventures, based on the contractual rights and obligations between the parties of the arrangement.
The Group has two types of joint arrangements:
- Joint operations: A joint operation is an arrangement in which the Group shares joint control, primarily via contractual arrangements with other parties. In a joint operation, the Group has rights to the assets and obligations for the liabilities relating to the arrangement. This includes situations where the parties benefit from the joint activity through a share of the output, rather than by receiving a share of the results of trading. In relation to the Group’s interest in a joint operation, the Group recognises: its share of assets and liabilities; revenue from the sale of its share of the output and its share in any revenue generated from the sale of the output by the joint operation; and its share of expenses. All such amounts are measured in accordance with the terms of the arrangement, which is usually in proportion to the Group’s interest in the joint operation.
- Joint ventures: A joint venture is a joint arrangement in which the parties that share joint control have rights to the net assets of the arrangement. A separate vehicle, not the parties, will have the rights to the assets and obligations to the liabilities relating to the arrangement. More than an insignificant share of output from a joint venture is sold to third parties, which indicates the joint venture is not dependent on the parties to the arrangement for funding, nor do the parties have an obligation for the liabilities of the arrangement. Joint ventures are accounted for using the equity accounting method.
BHP Annual Report 2018 [page 198] – Note 25 Employees:
BHP Annual Report 2018 [page 203] – Note 29 Interests in joint operations:
BHP Annual Report 2018 [page 204] – Note 30 Related party transactions: