I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART G: PREPARING SIMPLE CONSOLIDATED FINANCIAL STATEMENTS 

 

412

 

In the following year, the share of A's profit is $6,500 and no dividend is received. The figure for  

'Investment in associate' in the consolidated financial statements will be calculated as follows.  

 

$     

Investment in associate b/f 

64,500 

Share of A's profit for the year 

   6,500 

Investment in associate c/f 

 71,000 

3.2.5 No consolidated accounts 

Equity accounting is available for consolidated accounts and individual accounts. A company only has to 

prepare consolidated accounts if it has one or more subsidiaries. If a company has no subsidiaries, then 

it is not required to prepare consolidated accounts and so any investments in associates can be 

accounted for as an investment at cost or by using the equity method, in the parent company's individual 

accounts. 

 

3.3 Trade investments 

A trade investment is a simple investment in the shares of another entity that is not an associate or a 

subsidiary.  

A trade investment is a simple investment in the shares of another entity, that is held for the accretion of 

wealth, and is not an associate or a subsidiary.  

Trade investments are simply shown as investments under non-current assets in the consolidated 

statement of financial position of the group.