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Features of Joint Venture

  • There is an agreement between two or more persons for a single venture
  • A joint venture comes to an end on completion of a specific venture
  • Co-ventures share profits and losses in agreed proportion
  • Since a joint venture is for a single venture, generally no firm name is used
  • There will be no closing stock as it will be either sold or taken away by any of the venturers at the end of the venture
  • Generally profit/loss of the venture is computed on completion of the venture


  • Going concern assumption of accounting is not appropriate for joint venture accounting. The problem of distinction between capital and revenue expenditure does not arise.
  • Plant and machinery and other fixed assets, when used in a venture, are first charged to Venture account at cost. On completion of the venture, such assets are re-valued and shown as the revenue of the venture. Thus, the accounting approach for measurement of venture profit is totally different.
  • Joint venture follows cash basis of accounting.

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