Trade investment
In basic group accounting, a simple or trade investment refers to an investment in another entity that is neither a subsidiary nor an associate. In group questions, classify the investee by considering control and significant influence before deciding whether it is a subsidiary, associate or simple investment. A small ownership percentage is a useful starting clue but rights and other facts can matter.
Worked example
A small shareholding with no control or significant influence may be treated as a simple investment.
Common mistake
The terminology is used inconsistently. Do not assume a short-term trading intention or a measurement basis without the facts and applicable standard.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: Simple investment, Trade (simple) investment