Parties A and B establish an incorporated joint arrangement (entity Z) to operate a gold mine,...

 

Transcribed Image Text:

Parties A and B establish an incorporated joint arrangement (entity Z) to operate a gold mine, in which each party has a 50% ownership interest. Entity Z utilises a nearby processing plant, owned by party A, to extract the gold as part of a Toll Manufacturing Arrangement (TMA). After processing, entity Z sells the gold on the open market. Entity Z subsequently pays dividends to parties A and B based on their ownership interest. Required: Is there a joint operation or a joint venture? Explain your response in detail. 1 Parties A and B establish an incorporated joint arrangement (entity Z) to operate a gold mine, in which each party has a 50% ownership interest. Entity Z utilises a nearby processing plant, owned by party A, to extract the gold as part of a Toll Manufacturing Arrangement (TMA). After processing, entity Z sells the gold on the open market. Entity Z subsequently pays dividends to parties A and B based on their ownership interest. Required: Is there a joint operation or a joint venture? Explain your response in detail. 1

Answer rating: 100% (QA)

Based on the information provided it appears that the arrangement between Parties A and B constitute... View the full answer