Briefly explain scope and forms of Joint Venture as per AS 27.

Scope of AS 27: As per AS 27 ‘Financial Reporting of Interests in Joint Ventures', this Standard should be applied in accounting for interests in joint ventures and the reporting of joint venture assets, liabilities, income and expenses in the financial statements of venturers and investors, regardless of the structures or forms under which the joint venture activities take place. The provisions of this AS need to be referred to for consolidated financial statements only when CFS is prepared and presented by the venturer. Forms of Joint Venture as per AS 27: Joint ventures take many different forms and structures. This Standard identifies three broad types- (i) Jointly controlled operations: Under this set up, venturers do not create a separate entity for their joint venture business but they use their own resources for the purpose. They raise any funds required for joint venture on their own, they incur any expenses and sales are also realised individually, they use same set of fixed and employees for joint venture business and their own business. They do not maintain a separate set of books for joint venture. (ii) Jointly controlled assets: Separate legal entity is not created in this form of joint venture but venturer owns the assets jointly, which are used by them for the purpose of generating economic benefit to each of them. They take up any expenses and liabilities related to the joint assets as per the contract. (iii) Jointly controlled entities: This is the format where venturer creates a new entity for their joint venture business. All the venturers pool their resources under new banner and this entity purchases its own assets, create its own liabilities, expenses are incurred by the entity itself and sales are also made by this entity. The net result of the entity is shared by the venturers in the ratio agreed upon in the contractual agreement. This contractual agreement also determines the joint control of the venturer. Being a separate entity, separate set of books is maintained for the joint venture.