Interests in Joint Operations

Interests in Joint Operations records your share of assets you own jointly with another party under an arrangement where each party has rights to the assets and obligations for the liabilities, rather than shares in a separate company. Buying a tourist bus half and half with another agency and sharing its earnings is a joint operation; each party records its share of the bus, its share of the income and its share of the costs. The balance moves when the joint asset is bought, depreciated or sold, and it needs the agreement to say what each share is. It is uncommon for a small business, and most partnerships are better handled as a separate company or a plain shared asset.

Balance = Your share percent x Cost of the jointly held assets - Your share of accumulated depreciation.

1. 01Agree the ownership share in writing with the other party.
2. 02Go to Invoicing > Journal Entry > New dated the purchase; debit this account for your share, credit the bank.
3. 03Submit. The entry above posts for half of a tourist bus.
4. 04Post your share of the bus income and running costs each month to the normal income and expense accounts.
5. 05Depreciate your share by Journal Entry each month or set up an Asset pointing at this account.

Post by Journal Entry for your share of jointly owned equipment or contracts. Uncommon for small businesses.

Dr Interests in Joint Operations Rs 4,00,000, Cr Bank Account Rs 4,00,000 for half of a jointly bought tourist bus.