How is an Associate's Income from non-operating sources such as extraordinary gains and losses to be accounted for?

Question

Quizplus · Accepted Answer

According to the equity method of accounting, non-operating sources such as extraordinary gains and losses are shown separately, net of tax below income from operations on the Associate's Income statement. The investor's pro rata share of these after-tax gains and losses are added to or deducted from the Investment account. This treatment provides a clear understanding of the associate's performance and ensures consistency in accounting for such items.

How Is an Associate's Income from Non-Operating Sources Such as Extraordinary