What is a collaboration arrangement?
Alliances come in many forms – although they often come together through a legal entity that is jointly operated, they also may be created through a series of contracts. Collaboration arrangements broadly refer to the latter where two parties partner together for a specific goal through a contract or a series of contracts.
These arrangements involve two (or more) parties that meet both of the following requirements:
- They are active participants in the activity
- They are exposed to significant risks and rewards dependent on the commercial success of the activity