An arrangement that arises between at least two parties who have joint control. In other words, it that arrangement where two entities or more come together for a specific purpose and as a result share control (joint control). In most cases, the arrangement is set out in a written contract clarifying the purpose and activity of the joint arrangement and any processes related to joint decision making.

Joint arrangements come in two forms: joint ventures and joint operations. A joint venture is a joint arrangement in which the parties (i.e., joint venturers) in possession of joint control (of the underlying arrangement) have rights only to the net assets of the underlying arrangement. Each party to the joint venture (or each “joint venturer”) recognizes, in its own books, an investment corresponding to its rights in the net assets. This is accounted for using the equity method (equity method accounting).

A joint operation is a joint arrangement that confers on the parties (known as joint operators) enjoying joint control (as to the arrangement) specific rights to the assets and places on such parties specific obligations for the liabilities that correspond to this arrangement. Joint operations differ from joint ventures in that the latter entail rights to the net assets of an arrangement.