Perennial has successfully launched its second, 4-year, 4.55% retail bond this week. For a discussion on whether the bond has sufficient margin of safety, you can refer to the analysis for its first retail bond here. The purpose of this post is to discuss the accounting treatment of joint ventures (JVs) and associates, using Perennial as an example as it has a fairly detailed breakdown of them.
Fig. 1 below shows Perennial's balance sheet as at Dec 2015, extracted from its annual report. As the info in the screenshots are rather small, please refer to the annual report for better clarity of the info.
| Fig. 1: Perennial's Balance Sheet |
As shown in the figure above, it has total current and non-current loans, borrowings and bonds of $2,055.6 million (shown in lines 12 & 13 in Fig. 1). Note that there is an item called "Associates and Joint Ventures" ...
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