An associated undertaking, or associate, is a company that is not classified as a subsidiary but in which another company or group exercises significant influence. Accounting for associates is regulated by Section 14 of the Financial Reporting Standard Applicable in the UK and Republic of Ireland and International Accounting Standard 28 (IAS 28), Investments in Associates.
The Cost Method is an accounting technique used by a parent company for investments in subsidiary companies, particularly when ownership is less than 20% of the outstanding voting common stock.
Participating Interest refers to an interest held by an entity in the shares of another entity, maintained on a long-term basis to exercise some measure of control or influence over the activities of the second entity.
An influence by one company on the financial and operating policy decisions of another company (including dividend policy) in which it has an interest. The influence does not need to amount to control.
