When equity accounting is applied,how is the account balance of the investment in the associate measured?

Question

Quizplus · Accepted Answer

When equity accounting is applied, the account balance of the investment in the associate is measured at cost initially, and thereafter at fair value, plus adjustments for post-acquisition movements of profits and reserves. This is in line with the accounting standard for associates, which requires the equity method to recognize changes in the investee's net assets as adjustments to the carrying amount of the investment. Therefore, the correct option is D, which states that the investment is measured at cost plus adjustments for post-acquisition movements of profits and reserves.

When Equity Accounting Is Applied,how Is the Account Balance of the Investment