Joint control

The contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.

In assessing whether an entity has joint control of an arrangement, an entity shall assess first whether all the parties, or a group of the parties, control the arrangement. When all the parties, or a group of the parties, considered collectively, are able to direct the activities that significantly affect the returns of the arrangement (ie the relevant activities), the parties control the arrangement collectively. (IFRS 11 B5 – B8)

An entity shall assess whether it has joint control of the collectively controlled arrangement. Joint control exists only when decisions about the relevant activities require the unanimous consent of the parties that collectively control the arrangement. Assessing whether the arrangement is jointly controlled by all of its parties or by a group of the parties, or controlled by one of its parties alone, can require judgement.

Sometimes the decision-making process that is agreed upon by the parties in their contractual arrangement implicitly leads to joint control. In other circumstances, the contractual arrangement requires a minimum proportion of the voting rights to make decisions about the relevant activities, as such this will not lead top joint control in a frequent manner.

This is part of the following definitions relating to IFRS 11 Joint arrangement:

Joint arrangement – An arrangement of which two or more parties have joint control.
Joint operation – A joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.
Joint operator – A party to a joint operation that has joint control of that joint operation.
Joint venture – A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
Joint venturer – A party to a joint venture that has joint control of that joint venture.
Party to a joint arrangement – An entity that participates in a joint arrangement, regardless of whether that entity has joint control of the arrangement.
Separate vehicle – A separately identifiable financial structure, including separate legal entities or entities recognised by statute, regardless of whether those entities have a legal personality.


General model of measurement of insurance contracts

Joint control

Joint control

Joint control Joint control Joint control Joint control Joint control Joint control

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