Question 1

(a) Define an associate. [2 marks]

(b) Explain how to account for associates in the separate financial statements of the investor. [4 marks]

(c) Explain the effect of equity method on the consolidated income statement and statement of financial position. [4 marks]

(d) Describe the requirement of MFRS 3 Business Combination in relation to the revaluation of a subsidiary company's assets to fair value at the acquisition date.