A method of accounting for associated undertakings in which the investor initially discloses in its financial statements the amount of the investment at its cost, identifying any goodwill arising. In subsequent periods the carrying amount is adjusted by:
The share of the associates’ results is included immediately after the group operating profit in the consolidated profit and loss account. This method is required by Financial Reporting Standard 9. The relevant International Accounting Standard is IAS 28, Investments in Associates. See also gross equity method.