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).
Joint ventures are structured through a separate vehicle that establishes legal separation between the joint venturer(s) and the assets and liabilities in the vehicle.
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