Associate
Accounting glossary · Understand, connect, apply
An associate is an investee over which the investor has significant influence. The investor can participate in policy decisions while control and joint control remain absent.
Example
A company appoints a representative to an investee’s board and takes part in policy decisions. If those rights give significant influence, the investee is an associate.
Remember the difference
IAS 28 ordinarily applies the equity method to associates, subject to its specified exceptions.
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Prepared with AI assistance. Examples are fictional and simplified for learning.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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