Investment in Associate Video Lecture | Advanced Accounting for CA Intermediate

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FAQs on Investment in Associate Video Lecture - Advanced Accounting for CA Intermediate

1. What is an investment in associate in the context of CA Intermediate?
Ans. An investment in associate refers to when an entity has significant influence over another entity, but does not have control or joint control over it. This usually involves owning between 20% to 50% of the voting rights in the associate company.
2. How is the initial recognition of an investment in associate done in CA Intermediate?
Ans. The initial recognition of an investment in associate is done at cost. This includes the purchase price and any directly attributable costs, such as legal fees or brokerage fees.
3. How is the investment in associate accounted for after initial recognition in CA Intermediate?
Ans. After initial recognition, the investment in associate is accounted for using the equity method. This involves recognizing the investor's share of the associate's profit or loss in the investor's income statement.
4. How is the investment in associate reported in the financial statements in CA Intermediate?
Ans. The investment in associate is reported in the investor's balance sheet as a non-current asset. The investor's share of the associate's profit or loss is then reported in the income statement.
5. What disclosures are required for an investment in associate in CA Intermediate financial statements?
Ans. Disclosures required for an investment in associate include the carrying amount of the investment, the investor's share of the associate's profit or loss, any changes in the investor's share of the associate's equity, and any significant restrictions on the ability to access or use the investment.
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