Associate: Difference between revisions
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For financial reporting purposes, an investment is normally classed and accounted for as an associate (or associated undertaking) when: | For financial reporting purposes, an investment is normally classed and accounted for as an associate (or associated undertaking) when: | ||
(i) the investor exercises significant influence over the operating and financial policies of the other entity, which is normally through holdings of over 20%, but less than 50%; and | (i) the investor exercises significant influence over the operating and financial policies of the other entity, which is normally through holdings of over 20%, but less than 50%; and <br> | ||
(ii) that other entity is not a subsidiary undertaking and the investment does not constitute an interest in a joint venture. | (ii) that other entity is not a subsidiary undertaking and the investment does not constitute an interest in a joint venture. | ||
Revision as of 15:54, 13 May 2016
Financial accounting.
For financial reporting purposes, an investment is normally classed and accounted for as an associate (or associated undertaking) when:
(i) the investor exercises significant influence over the operating and financial policies of the other entity, which is normally through holdings of over 20%, but less than 50%; and
(ii) that other entity is not a subsidiary undertaking and the investment does not constitute an interest in a joint venture.
Relevant accounting standards include Section 14 and Section 15 of FRS 102.
