Sunday May 17 2009 9:20 pm (MST)

 A joint venture is a contractual arrangement by two or more parties that undertakes an economic activity that is subject to joint control.

The following are three types:

•        Jointly controlled operations

•        Jointly controlled assets

•        Jointly controlled entities

Joint control exists only when the strategic and operating decisions relating to the economic activity require the unanimous consent of all parties sharing control.

A venturer recognizes its interest in a jointly controlled operation by recognizing in its financial statements the assets that it controls, the liabilities and expenses that it incurs, and its share of the income that it earns from the sale of goods or services by the joint venture.

A venturer recognizes its interest in jointly controlled assets on a proportional basis. It also recognizes any liabilities or expenses it incurs, its share of liabilities or expenses incurred jointly, and any income from the sale or use of its share of the output of the joint venture.

Since joint ventures are partnerships, businesses can join together to work on a project for a ser period of time. Having joint ventures with other businesses can increase your chances of beating your competition, increase sales and increase your profits quickly.

Joint venture also allows you to save money when businesses share operating costs. This means that all the partners, including you, will share costs for maintaining the website, advertising and other expenses but you will save money because you are not the only one spending for it.

By being a partner, your joint venture partners can give you referrals from their clients. This can really increase your profit and sales. It can also increase your reputation and more people will buy from you. In turn, you will also have to refer your partner’s website. It is a give and take relationship.

Since all joint ventures partners share the workload, you can save valuable time and money for your ongoing projects. This means that you have more time for yourself and also, you will not be working alone. It also creates a sense of teamwork and dedication.

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