Joint venture

Financial Accounting

1. WELCOME

2. JOINT VENTURE Joint Venture is a particular venture undertaken by two or more persoons (known as co- venturers ) cntributing capital for a temporary period with an agreement to share profit or loss in an agreed ratio.

3. PARTNERSHIP Partnership is a continuing business with a name undertaken by a minimum of two persons (known as partners) with an agreement to share profit or loss in an agreed ratio as governed by Indian Partnership Act, 1932.

4. CONSIGNMENT Consignment in an agency agreement under which a manufacturer or a wholesaler (consignor) sends his goods at his own risk to his agent (consignee) in different place for the purpose of sale on commission basis.

5. DISTINCTION BETWEEN JOINT VENTURE AND PARTNERSHIP Basis of Distinction Joint Venture Partnership Name Without Name With Name Venture Particular Venture Continuing Business Persons Co- venturers Partners Governing Act No Specific Act Indian Partnership Act 1932 Basis of Accoounting Cash Basis Accrual Basis

6. DISTINCTION BETWEEN JOINT VENTURE AND PARTNERSHIP Basis Joint Venture Partnership Closing of Accounts On Completion of Venture On Completion of Every Business Year Suits Cannot Sue and Cannot be Sued (as no name) Can Sue and Can be Sued Competing Business by Persons Indulged Not Indulged Liability Depends on Mode of Contract (Joint or Individual) Jointly and Severally Liable Doctrine of Implied Authority Not Applicable to Co- venturers Applicable to Partners

7. DISTINCTION BETWEEN JOINT VENTURE AND CONSIGNMENT Basis of Distinction Joint Venture Consignment Relationship Between Persons Like Partners in Partnership Principal and Agent Nature of Goods Movable as well as Immovable Only Movable Ownership With All Co- venturers Only with Consignor Term Used for Returns Profit or Loss Commission Profit Sharing Ratio As per Agreement or Equal Ratio Wholly only to Consignor

8. DISTINCTION BETWEEN JOINT VENTURE AND CONSIGNMENT Basis of Distinction Joint Venture Consignment Financier Co- venturers Only Consignor Account Sales No Need Sent by Consignee to Consignor Governance Only Agreement Agreement as well as Law of Agency Number of Methods of Accounting Three Only One Right to Choice of Goods With All Co- venturers Only with Consignor

9. JOINT VENTURE (METHODS OF ACCOUNTING) Keeping a Separate Set of Books: a) Joint Venture A/C (Nominal) Co- venturers A/C (A, B)-(Personal) Joint Bank A/c –(Personal) Not Keeping a Separate Set of Books: a) Books of A – Joint Venture A/C & B A/C b) Books of B – Joint Venture A/C & A A/C iii) Memorandum Joint Venture Method: a) Books of A – M emorandum J.V A/C & J.V withB A/C b) Books of B – M emorandum J.V A/C & J.V withA A/C

10. THANK YOU