Professional Advice on Joint Venture Consolidation

[tariqab]

There are two venturers A & B with interest holding 45% & 55% resp. in Joint venture JV

For internal purpose we are using proportionate consolidation.

Total revenue of JV 100Million

So our portion 100x45% 45Million

Venturer A sale to JV 20Millon

So what will be consolidated Revenue figures, if take 45+20=75Million is this correct, but, I have confusion because this 20M is Venturer A sale and as well as cost of JV, from where we are getting 45M.

Regards
Tariq

[tariqab]

Dear Members

Please reply, for further information i can send excel working.

Regards
Tariq

[tariqab]

as per my understanding, Venturer A `other than from JV` can only book revenue upto extend of other venturer interest.

Venturer A sale to JV is 20M and A has interest holding is 45%, so He can recognize income upto 55%.

Please comments

Regards
Tariq

[tariqab]

Dear Members

I still waiting for your suggestion or opinion.

Regards
Tariq

[awaisaftab]

Tariq

send me excel sheet. I will see it but I cannot promise to solve your problem but I will try my best

[tariqab]

Dear awais

Just give me clue, how did you understand above posts, b4 sending u excel working.

Regards
Tariq

[tariqab]

Dear Awais

Can you tell me your email.

Regards
Tariq

[awaisaftab]

[email protected]

[tariqab]

Hi Awais

I have sent attached working of JV to you,nd waiting for your reply.

Regards
Tariq

[tariqab]

Dear Kamran

I have forwarded working of JV to you. Please consider it if it is possible.

Regards
Tariq

[kamranACA]

Tariq,

Where are you located and for which company do you work?

If the forum is not a right place, do e-mail me.

Regards,


KAMRAN.

[tariqab]

Mr. Kamran,

1. Company located in Abu Dhabi.
2. Big Group of Companies. (Name Confidential)
3. Me working in Head office (Accounts/finance department).

For time being, the query I raised, where one venturer provides some service to JV and recorded it as sale in venturer book. For consolidation purpose, I eliminated entire (100%)sale of services made to JV.

Regards
Tariq

[kamranACA]

You will hopefully get the response soon.

Regards

[kamranACA]

Tariq,

You have not mentioned in your sheet that what JV has done with the goods purchased from venturer.

Were such goods included in JV's reported revenue of Rs. 120?

If not then these should make a part of the stock of JV. If this is the case, how you have charged cost of Rs. 50 in total cost of JV. You must appreciate that the cost of inventories (or goods) cannot be charged to P/L account unless these have been sold.

Please explain whether these were included in JV's sales/revenue of Rs 120 or not and if not, were these fully retained in stocks? Please also explain how you can charge cost of goodS/inventories to P/L account unless these have been sold?

The only reason could be that such goods were fixed assets for JV. If this was the case even then whole of their cost could not be charged to P/L account. Rather, it may have to be capitalzied and depreciated.

Please remove these confusions so that I may suggest answer to your query, which appears very simple if these ambiguities are removed.

Regards,


KAMRAN.

[tariqab]

Kamran

This 50M is various services provided by Venturer A to JV.

Regards
Tariq