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Explain what an associate investment is under IaS 28?

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Question added by Frank Mwansa , ACCOUNTING LECTURER , FREELANCER
Date Posted: 2017/09/23
ahsan farooq
by ahsan farooq , Senior Financial Analyst , 3E Consultancy

IAS 28 Investment in associate outlines the accounting for investment in associates. An associate is an entity over which an investor has significant influence i.e investor holds the power to participate in the financial and operational policy decisions of the invitee. 

In its consolidated financial statements an investor should use the equity method of accounting for its investment in associate. Under this method of accounting an equity investment is initially recorded at cost and is subsequently adjusted to reflect the investors share of the profit or loss of the associate.

Hope this answers the question

Regards

Ahsan Farooq

Senior Financial Consultant

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