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Notes to the Financial Statements
Washington H. Soul Pattinson and Company Limited
Annual Report 2016
74
Accounting for Our Investments
9
NOTE 9
INVESTMENTS IN JOINTLY CONTROLLED ENTITIES
(JOINT OPERATIONS AND JOINT VENTURES)
Accounting policy –
Investments in Joint arrangements
A joint arrangement is an arrangement where two or more parties share control. Joint arrangements are classified
as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of
each investor, rather than the legal structure.
Joint operations
A joint operation is a joint arrangement in which the parties that share joint control, have rights to the assets, and
obligations for the liabilities relating to the arrangement. The Group recognises its direct right to the assets, liabilities;
revenues and expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and
expenses. These have been incorporated into the Group’s financial statements under the appropriate headings.
Joint ventures
A joint venture is a joint arrangement in which the parties that share joint control have rights to the net assets
of the arrangement. Interests in joint ventures are accounted for using the equity method, after initially being
recognised at cost.
Through New Hope Corporation Limited and its subsidiaries, the Group holds interests in the following Joint
arrangements, each of which have been accounted for as a Joint operation as described in the accounting
policy above.
Name
Accounted for as:
Group’s interest
Segment allocated to:
Bengalla Joint Venture
Joint operation
40%
Energy operations
Lenton Joint Venture
Joint operation
90%
Energy operations
Yamala Joint Venture
Joint operation
70%
Energy operations
Cuisiner Joint Venture – Barta projects
Joint operation
15%
Energy operations
Cuisiner Joint Venture – Wompi project
Joint operation
17.5%
Energy operations
Key judgement
Classification of joint arrangements as a joint operation
The Group assesses whether it has the power to direct the relevant activities of the investee by considering the
rights it holds with respect to the work programme and budget approval, investment decision approval, voting
rights in joint operating committees and changes to the joint arrangement participant holdings. Where the Group
has control, judgement is also required to assess whether the arrangement is a joint operation or a joint venture.