Object Of Standard

The purpose of this standard is:

(A) specify the circumstances in which investors use

the method of accounting ("equivalence") to

Investments in associated companies

(B) prescribe how the equivalence should be used

(C) require certain information regarding investment in

shareholders.

3.1.1 In some cases, the relationship between an investor and its investment

investor does not exceed a relationship between the sender. However,

in other cases, a special relationship between the investor and

investments are characterized by control of the investor or

significant influence over the investee. This standard deals

in a situation where the investor has significant influence

investment. In these cases, the investor known as associate members.

IAS International Accounting Standard 1024 "Consolidated Accounts" offers

accounting and its subsidiaries (subsidiaries).

3.1.2 Where the investor has significant influence over the investee, it is

ability to significantly affect one or both of the investee

financial and operating policies. Therefore, the investor must

be able to achieve some protection against changes in the operation

and conditions of the financial statements of the subsidiary, which would undermine

And also to achieve broad consistency in areas of mutual interest,

implementation of policies. Under these conditions, the investor

a measure of responsibility for the performance of partners.

Since the performance of resources and economic partners

underlying investment can have a significant effect

investors, the data must be reported in financial

Report of the investor.

3.1.3 Under the equity method, investment is initially recorded at

cost and adjusted thereafter for post acquisition

changes in investor participation in the net assets of the issuing company. The

income statement reflects the investor's share of profits or

loss of the issuing company.

3.1.4 require the use of equity investments in

and related information contained in this standard should lead

in general purpose financial reports that reflect the importance of


Investments in associated companies for investors. This

information should help users of the evaluation reports of the investor

performance, financial position and financing and investment

activities.