The equity method
You'll learn how to account for investments in associates using the equity method, a key technique for CIMA and ACCA financial reporting papers.
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In this lesson
- 0:00 Equity method for associates explained
- 0:45 Investment presentation on statement of financial position
- 1:30 Share of profit and comprehensive income
- 2:40 Inter-group transactions with associates
- 4:23 Worked example: calculating investment in associate
- 6:28 Fair value adjustments and depreciation treatment
About this lesson
This video covers why associates aren't consolidated, how to calculate the investment balance on the statement of financial position, and how to record the investor's share of profits and losses. You'll discover how fair value adjustments and unrealised profits affect associate valuations, and work through a practical example showing the complete calculation. Master this method and you'll confidently handle associate accounting in your exams and professional work.
Duration: 7m
Transcript
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