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John sir ,
can you explain associates and equity accounting and can you tell me the difference between accounting for simple investment and accounting for AssociatesAll investments appear at cost in the SOFP of the company owning the investment.
If, and only, if consolidated accounts are being prepared (because the company has a subsidiary) then the investment in the associate is shown at cost plus the group’s share of post- acquisition retained earnings on the consolidated SOFP.
This is explained in Chapter 25 of our free lecture notes and in the lecture working through this chapter.
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