Page 350 - F3 -FA Integrated Workbook STUDENT 2018-19

Chapter 22

3.2 A comparison of investments in other entities
Investment Associate Subsidiary

Basic Neither influence Influence Control
definition nor control
Indicative Less than 20% Between 20% and 50% In excess of 50%
investment by
investor
Accounting Usually measure Equity method of Consolidation
treatment in at either cost or accounting
consolidated fair value
FS

Note that IAS 27 Separate Financial Statements permits an entity to record an
investment in a subsidiary or an associate at cost in its own financial statements.
This is normally what you would see in questions dealing with consolidated financial
statements, prior to dealing with the preparation of consolidated financial statements.

Parent

30%
80%

Associate
Subsidiary

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