If the investor is required to prepare consolidated financial statements,it recognises its investment in an associate by applying the equity method of accounting in its consolidated financial statements,and by applying the cost method in its separate financial statements.

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If an investor is required to prepare consolidated financial statements, it must use the equity method of accounting to recognize its investment in an associate. However, in its separate financial statements, the investor may choose to use either the equity method or the cost method to account for its investment in the associate.

If the Investor Is Required to Prepare Consolidated Financial Statements,it