20. Associates Flashcards
1
Q
What is the definition of an associate?
A
An entity over which the investor has significant influence
2
Q
What is Significant influence?
A
Significant influence is the power to participate in the financial and
operating policy decisions of the investee but is not control or joint
control over those policies
3
Q
How do we include the associate in the SFP?
A
As a line called investment in associate which consists of
- Cost of investment
- Plus group share of associate profit after tax
4
Q
What are the two reasons you don’t have to equity account an associate?
A
- Its classified as held for sale
- The parent is exempts on grounds that its a wholly are partially owned subsidiary
