Definition
Investment in Associates Accounting – The accounting treatment used when a company owns a meaningful but non-controlling stake (typically 20-50%) in another business, called an "associate." Instead of consolidating the associate's full revenue and expenses, the investor books a single line — its share of the associate's net profit — inside its own income statement, and adjusts the investment's carrying value on the balance sheet by that same amount each period. A holding company can show most of its reported profit coming from this one line, even though none of the associate's actual revenue, cash, or debt appears anywhere else in the parent's own financial statements. Found In: Income Statement ("Share of Profit of Associates"), Balance Sheet ("Investment in Associates")