Page 30 - PowerPoint Presentation

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Accounting for investments

• Two main kinds of investments in the shares of another

entity are distinguished, namely:

• simple share investments; and

• significant share investments which give the investor entity an

influence over or control of the affairs of the investee entity

• When accounting for significant share investments, it is

necessary to determine:

• the degree of influence exercised by the investor over the investee's

financial and operating policies as this determines the appropriate

accounting method.

• It is also essential to determine the ownership interest as this

determines the degree to which the investor shares in the equity of
the investee.

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