IAS 28 Investments in Associates and Joint Ventures
IAS 28 addresses investments in associates and joint ventures, including application of the equity method. For FA, the key associate concept is significant influence: participation in policy decisions without control. A 20% voting-power holding normally indicates influence unless contrary evidence exists. The equity method adjusts investment cost for relevant post-acquisition results and other movements, with distributions reducing the investment balance.
Worked example
A 30% associate earns $10,000 after acquisition: the investor’s equity-accounted investment normally increases by $3,000 before other relevant adjustments.
Common mistake
A holding below 50% is not automatically an associate: consider whether there is control, joint control, significant influence or none.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | FR | Direct | Official assessment-window verification pending |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | F2 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: IAS 28 Investments in associates