Part B 4

d. participate in the financial and operating policy decisions of an investee. (4) Where an investor sells inventories to an associate and the inventories are still on hand at the end of the year the investor's share of the associate's profits is: a. decreased by the investor's share of the unrealised profit. b. increased by the investor's share of the unrealised profit. c. not affected as the unrealised profit is in the books of the investor, not the associate. d. not affected as unrealised profits are only considered to arise in a parent-subsidiary relationship