Page 9 - PowerPoint Presentation

INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

Equity accounting (.10 - .15 & .25 - .43)

• The recognition of an investor’s share of the losses of

the associate (investee) will decrease the carrying

amount of the investment in the associate.

• When the investor’s share of the losses equals or

exceeds its interest in the associate, the investor will

discontinue recognising any further share of losses.

• Should the investee once again make profits, such

profits will only be recognised after the share of profits

equals the losses not recognised.

• Any dividends received from the associate will be

accounted for as a reduction in the carrying amount of

the investment in the associate.

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