Question

An investment in an associate is normally accounted for using the equity accounting method. This method requires that the investment in the associate is
Select one:
O a. initially recorded at cost and then adjusted in each subsequent accounting period to reflect the investor's share of the associate's profit or loss for the year
• b. initially recorded at cost and not adjusted thereafter
O c. initially recorded at fair value and the only
adjustments are for dividend income that is declared and paid
• d. initially recorded at cost and then adjusted to fair value at each sudsequent reporting period

Answer 1

a. initially recorded at cost and then adjusted in each subsequent accounting period to reflect the investor's share of the associate's profit or loss for the year