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- Investments in Associates
- Investments in Joint Ventures
- Investment Property
- Property Plant and Equipment
- Intangible Assets other than Goodwill
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Investments in Associates
|SME Par.||IFRS SME||U.S. GAAP|
|Scope of this section|
|14.1||This section applies to accounting for associates in consolidated financial statements and in the financial statements of an investor that is not a parent but that has an investment in one or more associates. Paragraph 9.26 establishes the requirements for accounting for associates in separate financial statements.||The term“equity-method investee” is used to describe what would be an associate under IFRS.|
|14.2||An associate is an entity, including an unincorporated entity such as a partnership, over which the investor has significant influence and that is neither a subsidiary nor an interest in a joint venture.|
|14.3||Significant influence is the power to participate in the financial and operating policy decisions of the associate but is not control or joint control over those policies.
||First sentence – Same.
|Measurement—accounting policy election|
|14.4||An investor shall account for all of its investments in associates using one of the following:
||Unlike IFRS SMEs, the cost method is not permitted for investments in investees over which the investor has the ability to exercise significant influence.
Like IFRS SMEs, U.S. GAAP allows investors to elect to account for investments that would otherwise be accounted for under the equity method at fair value. Unlike IFRS SMEs, however, the election is made on an investee-by-investee basis. Also unlike IFRS SMEs, when the fair value option is elected, it must be applied to all of the investor’s financial interests in the same entity (equity and debt, including guarantees) that are eligible items.
|14.5||An investor shall measure its investments in associates, other than those for which there is a published price quotation (see paragraph 14.7) at cost less any accumulated impairment losses recognised in accordance with Section 27 Impairment of Assets.||See 14.4.|
|14.6||The investor shall recognise dividends and other distributions received from the investment as income without regard to whether the distributions are from accumulated profits of the associate arising before or after the date of acquisition.||See 14.4.|
|14.7||An investor shall measure its investments in associates for which there is a published price quotation using the fair value model (see paragraph 14.9).||Unlike IFRS SMEs, there is no requirement to use a fair value model for investments in investees over which the investor has significant influence and for which there is a published price quotation.|
|14.8||Under the equity method of accounting, an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investor’s share of the profit or loss and other comprehensive income of the associate.
||First sentence – Same.
|Fair value model|
|14.9||When an investment in an associate is recognised initially, an investor shall measure it at the transaction price. Transaction price excludes transaction costs.||Same.|
|14.10||At each reporting date, an investor shall measure its investments in associates at fair value, with changes in fair value recognised in profit or loss, using the fair valuation guidance in paragraphs 11.27–11.32. An investor using the fair value model shall use the cost model for any investment in an associate for which it is impracticable to measure fair value reliably without undue cost or effort.||Unlike IFRS SMEs, the cost method is not permitted for investments in investees over which the investor has the ability to exercise significant influence. The U.S. GAAP fair value option is irrevocable, and there is no fall-back position in the event “it is impracticable” to measure fair value reliably.|
|Financial statement presentation|
|14.11||An investor shall classify investments in associates as non-current assets.||Unlike IFRS SMEs, balance sheet classification of investments in associates as current or noncurrent is subject to general current/noncurrent classification guidance.|