Legal Regulation of Accounting for Joint Arrangements: Domestic Practice and International Experience

In a rapidly developing international economy, joint arrangements are an effective tool for doing business. In Ukraine, joint arrangements are not very often use by economic entities, which is due to the imperfection of the current legislation. The purpose of the article is to study the legal regulation of accounting for joint arrangements in Ukraine and to justify recommendations for its improvement, taking into account international experience. As the analysis of normative legal documents shows, at present there are disagreements of separate norms regulating the accounting for joint arrangements. The types of joint arrangements in accordance with IAS 31 'Interests in Joint Ventures' and IFRS 11 'Joint Arrangements' were defined. An algorithm for determining the type of joint arrangements under IFRS 11 'Joint Arrangements' was disclosed. Key distinctions between IFRS 11 'Joint Arrangements' and US GAAP ASC 323 'Investments – Equity Method and Joint Ventures' were defined, which consist in determining the joint control and conducting the merger (consolidation). It was revealed that the legal regulation of accounting for joint arrangements in Ukraine is fragmentary and does not have a complex nature: for accounting purposes, National Accounting Standard 12 'Financial Investments' very limited regulates the accounting for joint arrangements; for the purposes of tax accounting – the Tax Code of Ukraine does not establish a special procedure for taxing joint arrangements. The necessity of adopting a separate National Accounting Standard for joint arrangements in Ukraine taking into account the international experience was substantiated. This standard should determine the methodological basis for the formation in the accounting of information on joint arrangements (both with the creation and without the creation of a legal entity) and its disclosure in the financial statements.