Example: Acquisition of interest in a joint operation

Entity A pays $100 million to acquire 50% interest in existing Entity X which is a business as defined by IFRS 3. The selling company previously held 100% shares. Entity A concludes that the Entity X is a joint operation. Entity A determines that the fair value of Entity’s X net assets is $160 million. Entity A incurred also transaction costs of $3 million.

The following entries are made by Entity A with respect to its 50% interest in the joint operation:

Relevant Sources:

1. ifrscommunity . com/knowledge-base/ifrs-11-joint-arrangements/

2. Phnom Penh HR