Where an associate has made losses, IAS 28, paragraph 30, states: After the investors interest is reduced
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Where an associate has made losses, IAS 28, paragraph 30, states:
After the investor’s interest is reduced to zero, additional losses are provided for, and a liability is recognised, only to the extent that the investor has incurred legal or constructive obligations or made payments on behalf of the associate. If the associate subsequently reports profits, the investor resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised.
Explain why profits are recognised only after its share of the profits equals the share of losses not recognised.
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Related Book For
Financial Accounting And Reporting
ISBN: 9781292255996
19th Edition
Authors: Barry Elliott, Jamie Elliott
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