Construction Groups · Track 2 · Tutorial 1 of 2
Account for a construction joint venture
A project company you own jointly with another contractor isn’t consolidated line by line: the group carries one investment and its share of the project’s profit. BrizoConsol posts that every month from the joint venture’s own figures, once the stake is recorded.
1Decide whether it is a joint venture
Your Group and another contractor set up Harbour Link Project Co in January 2026 to deliver one contract. Each holds 50%, and the shareholders’ agreement needs both to agree the decisions that matter. That is joint control. Under IFRS 11 the next question is what each partner has rights to:
| Arrangement | What the partners have | How it is accounted for |
|---|---|---|
| Joint venture | Rights to the net assets of a separate company, such as a project company. | The equity method (IAS 28), in this tutorial. |
| Joint operation | Rights to the assets and obligations for the liabilities, as in most unincorporated contracting JVs. | Each partner recognises its share of the assets, liabilities, revenue and costs in its own books. That share reaches BrizoConsol with that company’s figures: don’t record a joint operation as a JV / Associate. |
Whether the group has control, joint control or significant influence is your judgement from the agreements. BrizoConsol doesn’t decide it from the percentage.
2Bring in the joint venture’s figures
The equity method is worked out from Harbour Link Project Co’s own profit, dividends and reserves, so it needs its figures in BrizoConsol. Add it to your hierarchy, load its months and map its accounts, as in steps 2 to 4 of Buy a new subsidiary.
Once its stake is recorded as JV / Associate, its revenue, costs, assets and liabilities stay out of the group statements.
3Record the stake
- Open Ownership & Equity → Ownership, and click Harbour Link Project Co in Group structure.
- Under Share purchases and sales, click + Record, and choose Bought shares.
- In Add Ownership Record, choose Your Group as Parent entity, Jan-2026 as the Month, and 50 in % transacted.
- Under Relationship type from this record date onward, choose JV / Associate.
- Enter the Investment cost (group currency), 2,000,000, and click Add Record.
No fair value of net assets is asked for. In Group structure, Harbour Link Project Co is marked Associate/JV, and its Method reads Equity.
4Choose the accounts
- Open Totals and accounts for this company. In Investment in Harbour Link Project Co (in Your Group’s books), choose the account Your Group’s own books carry the 2,000,000 in, and click Save.
- Click Choose accounts in the banner, or the Posting accounts icon beside Group structure.
- Choose Associate/JV - investment, Associate/JV - share of profit, Associate/JV - dividend income and Associate/JV - share of OCI, and click Save.
Posting accounts also asks for NCI - net assets and NCI - share of profit: nothing posts until those two are chosen, even in a group with no minority shareholders.
Your Group paid for the stake in its own books, so BrizoConsol posts no cash. It moves the cost out of Your Group’s investment account into Associate/JV - investment, the one asset the equity method adjusts.
5Know what posts each month
| Entry | Posted |
|---|---|
| Cost, once | Dr Associate/JV - investment / Cr Your Group’s investment in Harbour Link Project Co, in January. Journal JV-AUTO-COST. |
| Share of profit | 50% of its profit after tax for the month, on one line: Dr Associate/JV - investment / Cr Associate/JV - share of profit. Journal JV-AUTO-PNL. |
| Dividends | 50% of the dividends it pays, read from its own dividends-paid accounts: Dr Associate/JV - dividend income / Cr Associate/JV - investment. |
| Share of OCI | 50% of the movement in its reserves: Dr Associate/JV - investment / Cr Associate/JV - share of OCI. |
If the project makes losses, the share of losses stops when the investment reaches zero. The losses not recognised are kept and set against later profits before any of that profit is posted.
6Post what the joint venture’s books don’t hold
Some adjustments need facts outside Harbour Link Project Co’s books. Post each as a journal of type JV / Associate: on Ownership & Equity → JV / Associate, click Add Manual JV Journal, and choose Harbour Link Project Co · JV / Associate as Related company. Post only the group’s 50%.
| Adjustment | When | Journal |
|---|---|---|
| Margin on work your companies do for the joint venture | Your contracting company bills Harbour Link Project Co, and at the month end the joint venture still holds the work as an asset rather than as a cost of its contract. | Dr Associate/JV - share of profit / Cr Associate/JV - investment, for 50% of that margin. Reverse it when the joint venture expenses the work. |
| Losses beyond the investment | The investment has reached zero, and the group has also lent to the joint venture in a way that is in substance part of its investment, or has guaranteed its obligations. | IAS 28 continues to recognise the share of losses against that loan, then as a liability for the obligation. BrizoConsol stops at the investment, so post the rest by journal. |
| Impairment | The impairment review values the investment below its carrying amount. | Dr an impairment loss account / Cr Associate/JV - investment. |
How to enter each journal is in Adjust the equity method by journal.
7Check the result
- Open Ownership & Equity → JV / Associate Report, choose Actual, YTD and Oct-2026, and click Harbour Link Project Co’s row.
- Open Ownership & Equity → JV / Associate for Oct-2026, and look at Auto JV Journals and Manual JV Journals.
- Open Reports → Profit & Loss for Oct-2026 with Show Entities on.
Check
The card’s heading shows Associate · held by Your Group (50%), and Total share of profit, under Share of profit by Harbour Link Project Co’s P&L line, is half of its profit after tax for the year to date. Every JV journal has a Diff of 0.00. The group profit and loss shows the share of profit on one line, and none of the joint venture’s revenue or costs.
8If something goes wrong
| What you see | What to do |
|---|---|
| Select the account that carries Harbour Link Project Co in its holder’s books before posting an associate or joint venture. | Choose Investment in Harbour Link Project Co (in Your Group’s books) under Totals and accounts for this company, and save. |
| Configure the associate investment, share of profit, dividend income and share of OCI accounts in Posting accounts on the Ownership page before posting an associate or joint venture. | Choose all four Associate/JV accounts in Posting accounts. |
| The joint venture’s revenue is in the group profit and loss | Its record is set to Subsidiary. Click Edit on the record, and choose JV / Associate. |
| No dividend entry, though the joint venture paid one | Its dividend account must be one BrizoConsol recognises as dividends paid, such as an account named Dividends Paid. |
| No JV / Associate share of profit found for this selection. | The joint venture has no profit and loss loaded for the period, or the period is before January 2026. |
| JV journals require a related subsidiary selection. | Choose Harbour Link Project Co as Related company. |
Want more detail? See the documentation