Koninklijke Ahold N.V., a food retailer headquartered in the Netherlands, reported in notes to its annual report that it owns \(60 \%\) of the outstanding common shares in a joint venture, ICA. Selected notes to Ahold's annual report (prepared under IFRS) follow:

Required

a. What is a joint venture?

b. Given that Ahold owns more than \(50 \%\) of this joint venture, why does the company not consolidate this investment? Does this differ from U.S. GAAP?

c. What method does Ahold use to report the ICA joint venture? Explain how this method works.

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The 60% shareholding does not entitle Ahold to unilateral decision-making authority over ICA due to the shareholders' agreement with the joint venture partner, which provides that strategic, financial and operational decisions will be made only on the basis of mutual consent. On the basis of this shareholders' agreement, the Company concluded that it has no control over ICA and, consequently, does not consolidate ICA's financial statements.