If, after reporting losses, a joint venture earns a profit, the entity does not recognize a share of profits.

Name: If, after reporting losses, a joint venture earns a profit, the entity does not recognize a share of profits.
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If a joint venture reports losses in prior periods and earns a profit in the current period, the entity recognizes a share of the profits based on the terms of the joint venture agreement. The share of profit recognized should not exceed the share of losses previously recognized.

If, After Reporting Losses, a Joint Venture Earns a Profit