Accounting for associates and joint ventures - FRS 9
FRS 9 - in force for year ends after 22 June 1998
This reviews and updates and in substance broadly follows its predecessor (SSAP 1). Most of the detail and impact of FRS 9 applies only to consolidated accounts; most of the text is concerned with providing an accounting framework for investment activities falling between subsidiary holdings (where control is exercised) and passive investment. FRS 9:
- distinguishes a "joint venture" (control shared between the venturers) from an associate (significant influence but no share in control) and then
- requires for joint ventures a variant of equity accounting involving additional disclosures (called the gross equity method by both the ASB and its detractors)
- requires that all disclosures for joint ventures are given separately from those relating to associates
- increases the extent of disclosure (compared with SSAP 1)
- effectively outlaws proportional consolidation (which is the accounting method the Companies Act has in mind for it calls joint ventures!)
This website is intended for general guidance only. No responsibility for loss occasioned to any person acting as a result of any material in this publication can be accepted.
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