Associate company

Accounting
Part of a series on

Historical cost Constant purchasing power Management Tax
Major types Audit Budget Cost Forensic Financial Fund Governmental Management Social Tax
Key concepts Accounting period Accrual Constant purchasing power Economic entity Fair value Going concern Historical cost Matching principle Materiality Revenue recognition Unit of account
Selected accounts Assets Cash Cost of goods sold Depreciation / Amortization (business) Equity Expenses Goodwill Liabilities Profit Revenue
Accounting standards Generally-accepted principles Generally-accepted auditing standards Convergence International Financial Reporting Standards International Standards on Auditing Management Accounting Principles
Financial statements Annual report Balance sheet Cash-flow Equity Income Management discussion Notes to the financial statements
Bookkeeping Bank reconciliation Debits and credits Double-entry system FIFO and LIFO Journal Ledger / General ledger Trial balance
Auditing Financial Internal Firms Report Sarbanes–Oxley Act
People and organizations Accountants Accounting organizations Luca Pacioli
Development History Research Positive accounting Sarbanes–Oxley Act
Misconduct Creative Earnings management Error account Hollywood Off-balance-sheet Two sets of books
v t e

An associate company (or associate) in accounting and business valuation is a company in which another company owns a significant portion of voting shares, usually 20–50%. In this case, an owner does not consolidate the associate's financial statements. Ownership of over 50% creates a subsidiary, with its financial statements being consolidated into the parent's books. Associate value is reported in the balance sheet as an asset, the investor's proportional share of the associate's income is reported in the income statement and dividends from the ownership decrease the value on the balance sheet. In Europe, investments into associate companies are called fixed financial assets.

Associate value in the enterprise value equation is the reciprocate of minority interest.

Under the UK Companies Act 2006, two companies are "associated" if one company is a subsidiary of the other or both are subsidiaries of the same body corporate.^[1]

References

^ Companies Act 2006, section 256

External links

Basis of Consolidation

Corporate finance and investment banking

Capital structure

Transactions
(terms/conditions)

Equity offerings	At-the-market offering Book building Bookrunner Bought deal Bought out deal Corporate spin-off Direct public offering Equity carve-out Follow-on offering Greenshoe Reverse Initial public offering Pre-IPO Private placement Public offering Rights issue Seasoned equity offering Secondary market offering Underwriting
Mergers and acquisitions	Buy side Contingent value rights Control premium Demerger Divestment Drag-along right Management due diligence Managerial entrenchment Mandatory offer Minority discount Pitch book Pre-emption right Proxy fight Post-merger integration Sell side Shareholder rights plan Special-purpose entity Special situation Squeeze-out Staggered board of directors Stock swap Super-majority amendment Synergy Tag-along right Takeover Reverse Tender offer
Leverage	Debt restructuring Debtor-in-possession financing Dividend recapitalization Financial sponsor Leveraged buyout Leveraged recapitalization High-yield debt Private equity Project finance