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Chapter 19

(W6) Investment in associate

An associate is an entity over which the parent has significant influence.
This is typically achieved via a shareholding of between 20–50%.

Associates are accounted for using the equity method, as follows:

$m
Cost of investment X
P’s % of associate’s post-acq reserves X
Impairment to-date (X)
––––
Investment in associate X
––––

Illustrations and further practice

You can now attempt Illustration 1 from Chapter 19.

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