What is accounting interest of a joint venture?

Answer 1

Accounting for interests in joint ventures is governed by IAS 31.

A Joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control, defined as the contractually agreed sharing of control over an economic activity such that no individual contracting party has control.

IAS 31 allows two treatments of accounting for an investment in jointly controlled entities :
Proportionate consolidation. [IAS 31.30]
Equity method of accounting. [IAS 31.38]
However please note that there are exceptions to the above.

The IASB and the FASB are carrying out a short-term convergence project, the objective of which is to amend IAS 31 Interests in Joint Ventures, by removing the main difference between US GAAP and IAS 31. This will be done by removing the existing option of proportionate consolidation for accounting for joint venture entities. The project is expected to be completed by 2008.

The standard is too complex to be discussed fully here. Please read the relevant standard for the details.

Answer 2

Read about joint venture here.