What is a joint arrangement?

A joint arrangement is defined as a cooperative agreement between two or more parties who share control over the arrangement. This concept is particularly significant in the context of corporate reporting, as it reflects how entities engage in business ventures collectively. Under this structure, all involved parties have rights and obligations related to the arrangement, which is crucial for financial reporting and decision-making processes.

The notion of shared control is fundamental because it implies that no single party can unilaterally make significant decisions related to the arrangement. Instead, the success and direction of the joint arrangement depend on collaboration and mutual consent among all participants. This structure differs from situations where one party has control (which would not qualify as a joint arrangement) or where the agreement is limited to specific financial transactions or employee benefit contracts, which do not encompass the broader collaborative and control-sharing aspects of joint arrangements.