- This topic has 3 replies, 2 voices, and was last updated 13 years ago by
.
-
Posts
-
From F6 i learned that a company is an Associate if ones interest in it is >50%. So in example 2, why would one refer to the company invested in as an Associate when the size of the investment is less than 50%?
I have no idea why F6 treats a company as an associate if the investor has >50%. Maybe the word “associate” is being used not in a technical way but rather in an everyday type of speech way. For instance, I have person acquaintances with whom I am associated but I’m not necessarily friends with these people and I certainly don’t own >50% of them! Equally, for F7 purposes, I don’t own between 20% and 50% of these same people. This is the use of the word “associate” in a non-technical way and it could be that your F6 studies were using the word in that way.
For F7, Associate takes on a technical meaning
“Associate” (>50%) in F6 has Corporation Tax (CT) implications w.r.t. tax rate used in calculating CT Liability. So maybe we have two definitions of “associate” – one for taxation purposes and another for financial management!
- You must be logged in to reply to this topic.