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Chapter 24

3.4 Associates

An associate is a company over which an investor has significant influence.

Associates are not part of the group and therefore cash flows between the group and
the associate must be reported in the statement of cash flows.

These cash flows could include:

 dividends received from an associate

 cash paid to acquire an associate

 cash proceeds from selling an associate

 loans to an associate.

These cash flows are presented as cash flows from investing activities.

Illustrations and further practice

Now try Illustration 3 from Chapter 24.

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