Associate to Associate

Hi All,

I’m sure this is a very minor question and the chances of having to put it into practice are low but here goes:-

If we own 25% of a company and purchase another 10%, which accounting method would we follow, I am unsure whether to:-

1. Add the additional paid to the cost of the investment, that way you’d recognise a gain/loss on disposal (whether that is to consolidate the full entity, downgrade to a financial instrument or dispose of all together)

2. Remeasure according to fair value when the further 10% if purchase, in essence recognising a gain/loss at the point of purchase.

Any pointers would be helpful.

Cheers