Chapter 12
Tackling Associates
In This Chapter
Understanding what an associate is
Examining the equity method
Pondering presentation issues
Discussing disclosures
Associates are a type of investment. An investor has what’s known as significant influence over an associate, but it doesn’t control the associate. This lack of control sets associates apart from subsidiaries (companies that are controlled by the reporting company) and joint ventures (a contractual arrangement whereby two or more parties undertake an economic activity that’s subject to joint control).
In this chapter I take you through the different sorts of entities that can be an associate, as well as looking at what isn’t an associate. I discuss the concept of significant influence, and look at how you account for an associate in the financial statements. Finally, I take you through how you present associates within a set of IFRS financial statements.
The standard that deals with associates is IAS 28 Investments in Associates ...
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