IFRS 11 — Sale of output by a joint operator

Date recorded:

Sale of output by a joint operator (Agenda Paper 8)


In November 2018, the Committee discussed a submission about whether the joint operator recognises revenue to depict the transfer of output to its customers in the reporting period or, instead, to depict its share of the output produced from the joint operation’s activities in the period when the output it receives is different from the output to which it is entitled (i.e. its share of the output according to the joint operation agreement (JOA)).

At the end of the November 2018 meeting the Committee agreed to publish an agenda decision stating that the joint operators recognise revenue that depicts the transfer of output to its customers in each reporting period by applying IFRS 15. This is the output it has received from the joint operation and sold, rather than the production of output.

Staff analysis

Comment letters were received and some respondents were concerned about the scope of the agenda decision including a possible expansion of the scope of the asset/liability position, cost of goods sold, inventory and settlement mechanism. Since there is no new information provided, the staff, consistent with the consensus agreed in November 2018 meeting, consider that it is more appropriate to only address the revenue recognition issue but not additional matters.

Staff recommendation

The staff recommend finalising the agenda decision with some editorial changes.


All Committee members were supportive of the Agenda Decision. The Committee decided, by a majority of votes, to publish the Agenda Decision with editorial changes.

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