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The share of profits and losses from the associates should be recorded in the OCI And the risk is that the company may not have done so leading to mistatements if the fs right?
Well, it would be right if that was the appropriate treatment for profits and losses from associates
But unfortunately, it isn’t correct
In a consolidation exercise where associates are also involved, the correct accounting treatment is to include within the profit before taxation the investor’s share of the associate’s profit after tax
Whatever, there does exist the audit risk that the client has inappropriately dealt with the share of associate’s profits / losses
OK?
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