This project will clarify that the guidance relating to the cost method in Section 3051 also applies to interests in jointly controlled enterprises accounted for using the cost method.
In December 2016, paragraph 3051.07A was added to Part II of the CPA Canada Handbook – Accounting. The paragraph describes how to apply the cost method to an investment subject to significant influence to determine the initial measurement of an investment. Section 3056, Interests in Joint Arrangements, permits an investor with an interest in a jointly controlled enterprise to account for its interest using either the equity method or cost method, as defined in Section 3051. Questions have arisen as to whether paragraph 3051.07A also applies to interests in jointly controlled enterprises.