Document ID: chunk:federal_register_of_legislation:F2019C00335:body:0:p33
Version: federal_register_of_legislation:F2019C00335
Segment Type: other
Provision Reference: 
Character Range: 87953–92443

only its share in each of the assets that are jointly held and in each of the liabilities that are incurred jointly, as stated in the contractual arrangement. Company E does not include in its assets and liabilities the shares of the other parties in Joint Operation D.
IE59 AASB 3 requires the acquirer to measure the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values with limited exceptions; for example, deferred tax assets and deferred tax liabilities are not measured at fair value but are measured in accordance with AASB 112 Income Taxes. Such measurement does not conflict with this Standard and thus those requirements apply.
IE60 Consequently, Company E determines the fair value, or other measure specified in AASB 3, of its share in the identifiable assets and liabilities related to Joint Operation D. The following table sets out the fair value or other measure specified by AASB 3 of Company E's shares in the identifiable assets and liabilities related to Joint Operation D:

                                        Fair value or other measure specified by AASB 3 for Company E's shares in the identifiable assets and liabilities of Joint Operation D
                                        CU
Property, plant and equipment                                                                                                                                                   138
Intangible assets (excluding goodwill)                                                                                                                                          72
Accounts receivable                                                                                                                                                             84
Inventory                                                                                                                                                                       70
Retirement benefit obligations                                                                                                                                                  (12)
Accounts payable                                                                                                                                                                (48)
Contingent liabilities                                                                                                                                                          (52)
Deferred tax liability                                                                                                                                                          (24)
Net assets                                                                                                                                                                      228

IE61 In accordance with AASB 3, the excess of the consideration transferred over the amount allocated to Company E's shares in the net identifiable assets is recognised as goodwill:

Consideration transferred                                                                                         CU300
Company E's shares in the identifiable assets and liabilities relating to its interest in the joint operation     CU228
Goodwill                                                                                                          CU72

IE62 Acquisition-related costs of CU50 are not considered to be part of the consideration transferred for the interest in the joint operation. They are recognised as expenses in profit or loss in the period that the costs are incurred and the services are received (see paragraph 53 of AASB 3).

Example 8—Contributing the right to use know-how to a joint operation in which the activity constitutes a business
IE63 Companies A and B are two companies whose business is the construction of high performance batteries for diverse applications.
IE64 In order to develop batteries for electric vehicles they set up a contractual arrangement (Joint Operation Z) to work together. Companies A and B share joint control of Joint Operation Z. This arrangement is a joint operation in which the activity constitutes a business, as defined in AASB 3.
IE65 After several years, the joint operators (Companies A and B) concluded that it is feasible to develop a battery for electric vehicles using Material M. However, processing Material M requires specialist know-how and thus