Advanced Accounting (Canada) · The Equity Method & Investments in Associates

Under the equity method, an associate earns net income and later declares a dividend to the investor. How does each event hit the investor's books?

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More in The Equity Method & Investments in Associates

An investor holds 15% of an investee, but the rest is widely dispersed among passive shareholders and the investor controls voting proxies. Equity method or fair-value investment?

What must be disclosed about investments in associates under IFRS 12?

An associate earns a strong profit but declares no dividend this year. Under the equity method, what income does the investor report, and why?

An investor owns 30% of an investee, but another party holds a controlling interest and keeps the 30% holder off the board and out of policy-making. Equity method or not?

Which factors indicate that an investor has significant influence over an investee?

After acquiring an associate, what does the investor do with the acquisition differential in subsequent periods, and how does it hit income?

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