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.
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Object Of Standard
Operative Date
This standard applies to accounting periods beginning on or after
1. July 1998.
2.1.1 Recognition and measurement requirements of this rule
is half financial reports beginning in mid-year at the
After July 1, 1998.
2.2 This standard may apply to periods beginning
before 1 July 1998 in an election has been made
in accordance with subsection 334 (5) Companies Act
2.3 Once operational, this Standard supersedes Accounting Standard
AASB 1016 "Investment Disclosure
Associates, as approved by notice published in
Commonwealth of Australia Gazette No. S224, 29 June 1989
and amended by Accounting Standard AASB 1025 "Application
the concept that the reporting and other changes. "
2.3.1 Notice of this Standard was published in the Commonwealth of
Australia Gazette August 25, 1998.