IFRS 11 - joint venture recognition

[Andrf]

Hello,
I hope somebody can give me some advice on this:

My company is just founding a joint venture in another country together with the joint venture partner. Only 10% of the 50% share of my company are brought in in Cash (the rest (40%) are brought in using intangible assets (customers relations --> customers of my group that are transferred to become customers of the newly founded joint venture)).

My question now is how to account for this scenario in IFRS.

I know that when the cash transfer (the 10%) happens, following transaction is recorded in our holding company:
debit: Investment in associates (value: 10%)
credit: Bank (value: 10%)

But what about the 40%? Actually I would assume that my company can activate 50% investment in associates in the holding company. Is this correct? And if so, is the remaining 40% recorded as some kind of badwill (negative goodwill) income in the P&L?
If that is true, I would record following booking in addition to the one described above:
debit: Investment in associates (value: 40%)
credit: Non Operating Income (special items) (value: 40%)

Any help is very much appreciated. I did not find any case like this on the Internet.

Thanks

 

[smallbushelp]

I'm not as familiar with IFRS as I could be but I think you got it almost right. Looks like you'll find your answer in IAS 28.

Initial accounting. An investment is accounted for using the equity method from the date on which it becomes an associate or a joint venture. On acquisition, any difference between the cost of the investment and the entity’s share of the net fair value of the investee's identifiable assets and liabilities in case of goodwill is included in the carrying amount of the investment (amortization not permitted) and any excess of the entity's share of the net fair value of the investee's identifiable assets and liabilities over the cost of the investment is included as income in the determination of the entity's share of the associate or joint venture’s profit or loss in the period in which the investment is acquired. Adjustments to the entity's share of the associate's or joint venture's profit or loss after acquisition are made, for example, for depreciation of the depreciable assets based on their fair values at the acquisition date or for impairment losses such as for goodwill or property, plant and equipment. [IAS 28(2011).32]


Looks the like difference is included in income in the period in which the investment is acquired. But there's no such thing as negative goodwill.