Glossary

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Joint ventures

Performing construction work in joint ventures is a characteristic of the construction industry, influencing both the balance sheets and the income statements of the construction companies involved. A joint venture is an entity with independent accounts, which is formed by two or more construction companies for the duration of a building contract. Profits and losses are taken over pro-rata into the income statements of the individual partners in line with their respective share and are stated as revenues, whereby in accordance with International Accounting Standards (IAS) profits are realized according to the performance progress. Expected losses are either written off immediately when they are perceived or accounted for by respective write downs or provisions and included in the financial statements. Furthermore, the partnering companies derive revenues from services rendered to the joint venture, such as by leasing equipment or by providing technical and commercial services. On the balance sheet, the exchange of services between the partnering companies and the joint venture is accounted for under ”Receivables from joint ventures ” and ”Liabilities to joint ventures”.