IAS 28Chapter 5Lesson 1
When losses exceed the investment: the cap and the liability
Step 1 of 8Learning objectives
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The investor stops recognising its share of losses when it equals or exceeds its interest in the associate (investment and long-term interests); beyond that, a liability exists only if there is an obligation or payments on behalf of the associate.
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Learning objectives
- Calculate the share of losses recognised within the limit of the interest and the unrecognised part.
- Determine what the interest includes, including long-term interests, and the order of allocation.
- Explain when a liability is recognised beyond the interest.