IPSAS 37
Active
Joint Arrangements
Requires an entity that is a party to a joint arrangement to determine its type – joint operation or joint venture – and to account for it on that basis: a joint operation is recognised on a look-through basis (the entity's share of assets, liabilities, revenue and expenses), while a joint venture continues to use the equity method. Effective 1 January 2017. (IFRS 11 equivalent; supersedes IPSAS 8.)
Active Standard
IPSAS 37 Joint Arrangements is the current, active standard issued by the IPSASB for accounting by entities that are parties to joint arrangements – distinguishing joint operations (look-through) from joint ventures (equity method). Effective for periods beginning on or after 1 January 2017 (earlier application encouraged). Paras. 1–38. It supersedes IPSAS 8.
IPSAS 37 is the IPSASB's adaptation of IFRS 11 Joint Arrangements for the public sector – retaining the joint-operation vs joint-venture distinction and the unanimous-consent control test, with public-sector commentary on service delivery partnerships.
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Objective, Scope & Definitions (paras. 1–7)
Objective & scope (para. 1)
Establishes principles for financial reporting by entities with an interest in JOINTLY controlled arrangements – requiring them to determine the TYPE of arrangement (operation or venture) and account for it accordingly.
Key definitions
Joint arrangement
A contract or arrangement that gives two or more parties joint control.
Joint control
Joint decision-making authority over the relevant decisions of the arrangement.
2
Joint Control – the Unanimous Consent Test (paras. 9–18)
Joint control (para. 9)
Joint control exists when decisions about the relevant decisions of the arrangement require the UNANIMOUS consent of the partners – i.e. a simple majority is NOT enough. This is the gateway test for all joint-arrangement accounting.
In the public sector, joint control frequently arises over shared infrastructure, regional services and cross-boundary projects.
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Types of Joint Arrangement – Operation vs Venture (paras. 19–22)
The split (para. 19)
A joint arrangement is a JOINT OPERATION if it is jointly controlled AND the partners have JOINT RIGHTS to the assets, liabilities, revenue and expenses – accounted for on a LOOK-THROUGH basis. It is a JOINT VENTURE if it is jointly controlled but does NOT give joint rights to the assets/liabilities – accounted for using the EQUITY METHOD.
TypeAccounting
Joint operationLook-through (share of A/L, revenue, expense)
Joint ventureEquity method (IPSAS 36)
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Joint Operations – the Look-Through Recognition Model (paras. 23–24)
Your share (para. 23)
ItemRecognise
Jointly controlled assetsRight to use (asset)
Jointly controlled liabilitiesYour share of obligation
Revenue from joint activityYour share of revenue
Expenses incurredYour share of expense
No goodwill arises in a joint operation – the partners hold the underlying assets directly.
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Non-Controlling Parties & Acquisitions of Interests in Joint Operations (paras. 24A–26)
Third parties (para. 24A)
Where a joint operation includes NON-CONTROLLING parties (the partners do not jointly own 100%), those parties' share of the joint operation's assets/liabilities/revenue/expenses is recognised in the same way – on a look-through basis – and disclosed.
Acquisition of an additional interest in a joint operation: treat the difference between cost and the previous carrying amount of the acquired share as an adjustment to the joint operation account (equity-method-like for JVs).
6
Joint Ventures – the Equity Method (paras. 27–28)
Equity method (para. 27)
A joint venture (jointly controlled but no joint rights to assets/liabilities) is accounted for using the EQUITY METHOD per IPSAS 36 – recognise the investor's share of the JV's profit/loss and OCI, and adjust for dividends received. See IPSAS 36 for full mechanics.
Look-through
Recognition of the investor's share of underlying assets and liabilities.
7
Separate Financial Statements (paras. 29–30)
Separate option (para. 29)
In separate financial statements, a joint arrangement may be accounted for under the cost model (IPSAS 31 intangibles / IPSAS 17) instead of look-through – but the equity method remains available for joint ventures.
Transition uses the same IPSAS 33 first-time-adoption approach if moving from a prior framework.
8
Transitional Provisions – Joint Ventures: Proportionate Consolidation to the Equity Method
Old to new (para. 31)
Before IPSAS 37After IPSAS 37
Proportionate consolidationEquity method (IPSAS 36)
Apply retrospectively; restate prior periods as if the equity method had always been used.
9
Transitional Provisions – Joint Operations: Equity Method to Assets & Liabilities
Remodel (para. 37)
Where an existing joint operation was previously accounted for under the equity method (pre-IPSAS 37), the entity retrospectively recognises its share of the underlying assets and liabilities of the arrangement, with a corresponding adjustment to retained earnings at the date of transition.
Retrospective application
Apply as if the new model had always been used; adjust retained earnings.
10
Effective Date & Amendment Timeline (paras. 42–42E)
Timeline
DateEvent
Jan 2015Issued
1 Jan 2017Effective date
2023Amended (latest)
IPSAS 37 superseded IPSAS 8 (Interests in Joint Ventures); transition is prospective with retrospective restatement.
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Relationship to IFRS 11
Twin (para. 42F)
IPSAS 37 mirrors IFRS 11 – the joint-operation look-through model and joint-venture equity method, the unanimous-consent control test, and the proportionate-consolidation-to-equity-method transition – with public-sector commentary on shared service delivery.
IFRF 11 joint controlIPSAS 37 sameIFRS 11 operation vs ventureIPSAS 37 sameIFRS 11 transitionIPSAS 37 same
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Statement / Process Mapping
Where it flows
ProcessLedger
Partner allocationJoint-Activity Register → share split
JV equity accountingAssociate Module → equity method
TransitionJV Transition Module → retrospective
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Related Standards – Cross-Reference Map
See also
StandardRelation
IPSAS 36Equity-method joint ventures
IPSAS 35Consolidation (control vs joint control)
IPSAS 33First-time transition
IFRS 11Direct equivalent
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Quick-Reference Glossary
Joint control
Decisions require unanimous consent of partners.
Joint operation
Jointly controlled with joint rights; look-through.
Joint venture
Jointly controlled, no joint rights; equity method.
Look-through
Recognise share of underlying assets/liabilities.
Proportionate consolidation
Pre-37 method; now equity method.
Service delivery partnership
Typical public-sector joint arrangement over infrastructure.