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Kamoroun
Topic Author
Posts: 20
Joined: May 28th, 2018, 7:19 pm

50 -50 partnerships

June 19th, 2018, 6:37 pm

In accounting a shareholder with <50% but >20% accounts for the company on the equity method and not full consolidation. I am interested in knowing how 50-50 partnerships work, as this is not control but rather "significant influence".
How difficult is it for parties to implement their ideas, how are board seats allocated? How is senior management appointed? How are employees hired?
Any interesting case studies?
 
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ppauper
Posts: 68470
Joined: November 15th, 2001, 1:29 pm

Re: 50 -50 partnerships

June 20th, 2018, 1:15 pm

wiki: joint ventures
things like who gets to appoint how many directors are agreed beforehand
 
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citiboy
Posts: 10
Joined: January 12th, 2011, 5:28 pm

Re: 50 -50 partnerships

July 12th, 2018, 12:41 pm

Joint ventures are usually accounted for using equity method (there are some exceptions under IFRS and US GAAP, please check). 

Also if a shareholder owns between 20% and 50%, but doesn't satisfy "significant influence" criteria, the equity method can not used, so it is an important criteria.
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