Appendix D — Accounting for a Joint Venture

D.2 Scope and Scope Exceptions

As noted in ASC 805-60-15-2, the guidance in ASC 805-60 (added by ASU 2023-05) applies “to the financial statements of joint [ventures] as defined in Section 805-60-20.”

ASC 805-60

15-4 The guidance in this Subtopic does not apply to any of the following:

Transactions between a joint venture and its owners other than the formation of a joint venture
Formations of entities determined to be not-for-profit entities in accordance with Topic 958
Combinations between entities, businesses, or nonprofit activities under common control (see paragraph 805-50-15-6 for examples)
Entities in the construction or extractive industries that may be proportionately consolidated by any of their investor-venturers in accordance with paragraph 810-10-45-14
Collaborative arrangements within the scope of Topic 808, except for any part of the arrangement that is conducted in a separate legal entity that meets the definition of a joint venture.

The guidance in ASC 805-60 is intended to only apply to the formation of joint ventures and does not alter the accounting by the venturers. The scope exceptions noted in ASC 805-60-15-4 are generally consistent with exceptions to joint venture accounting in accordance with ASC 323-10.

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This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.