Pharma is a group of companies listed in the EU reporting under IFRS Standards. The company develops and makes a large portfolio of pharmaceutical products, both for the healthcare and beauty markets. Pharma's customers include hospitals, governments, pharmacies and retail pharmacy and supermarket chains. The company has two divisions: Research & Development and Fabrication. In addition to working for the Pharma group, the Research & Development division also conducts research and development on behalf of smaller pharmaceutical companies and for governments.

During the period Pharma set up a joint (50:50) arrangement with a competitor to market and distribute certain over the counter products in the EU market. The joint arrangement is set up as a separate company which will pay dividends to the investors. Pharma transferred a portfolio of distribution assets and a significant amount of cash to the entity as part of the set-up arrangement. The investors do not have direct rights to or ownership of the assets of the joint arrangement once contributed unless the entity is wound up, when the proceeds from the sale of the assets less liabilities would be distributed 50:50. No guarantees were entered into for the liabilities of the joint arrangement. The joint arrangement has been loss making so far, mainly due to set-up costs and has paid no dividends but is expected to be profitable in the future.

Explain the implications of the above information for the financial statements for the year ending 30 September 20X7.