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INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

Intragroup transactions

• The broad concepts underlying the consolidation

procedures applied in the acquisition of a subsidiary

are adopted in accounting for the acquisition of an
investment in an associate. (IAS 28.26)

• When an associate is accounted for using the equity

method, unrealised profits and losses resulting from

transactions between an investor (or its consolidated
subsidiaries) and associates should be eliminated only

to the extent of the investor’s interest in the associate.

• Therefore such unrealised profits and losses are

recognised in the investor’s financial statements only to
the extent of unrelated investors' interest in the

associate. (IAS 28.28)

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