Professional Advice on Joint Venture Consolidation

[tariqab]

Dear Mr. Kamran

a) I am only talking about consolidation not about the individual accounts of Venturer A.

Where A & B venturer with 45% and 55% holding respectively we are consolidating for A Venturer.

You suggested following elimination entry (eliminating upto45% for CF)

Revenue (50*45%)= 22.5

Cost (40*45%) = 18

Profit (10*45%)= 4.5



My working for net effects after elimination entry (directly taking 55% for CF)


Revenue (50x55%) 27.5
Cost (40x55%) 22.0
Profit (10x55%) 5.5

Both are one and same only.

b) I studied IAS-31 para-48, it is ok now.

c) If both venturers have mutual understanding that they will not include inter joint venture revenue for consolidation purpose and only they will take upto share holding for each venturer from sale made by JV to thirty parties. I mean to say 100% elimination of internal sale for consolidation purpose. For this 100% elimination we have two practical references here in UAE but both are Korean companies.


Thanks you all for contributing your valuable suggestions for query

Warm Regards
Tariq