Accounting for investments in associates must use the equity method unless held for near-term disposal or subject to severe restrictions.

Investments in associates are accounted for in consolidated financial statements using the equity method: initially recorded at cost with goodwill or capital reserve identified, then adjusted for the investor's post-acquisition share of the associate's net assets and results; distributions reduce carrying amount; unrealised intercompany profits eliminated to the extent of the investor's interest; discontinue equity method when significant influence ceases or when severe restrictions impair transfers, thereafter accounting under the investments standard with the carrying amount treated as cost.

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