How do you account for joint arrangements under IFRS 11?

IFRS 11 classifies joint arrangements into two distinct types based on the rights and obligations of the parties:

1. Joint Operations: The parties have rights to the assets and obligations for the liabilities. Each operator recognizes its specific assets, liabilities, revenues, and expenses.
2. Joint Ventures: The parties have rights to the net assets of the arrangement. A joint venture must be accounted for using the equity method in accordance with IAS 28. Equity accounting involves recognizing the investment initially at cost and subsequently adjusting it for the post-acquisition change in the investor’s share of the net assets.