Account for associates and joint ventures

1Know what the equity method does

In July 2026, Your Group buys 30% of Company G for 300,000. It has significant influence over Company G but not control, so Company G is an associate. Company G reports in SGD, like the group.

Company G’s own revenue, costs, assets and liabilities stay out of the group’s statements.

2Set up the associate accounts

1. Open Ownership & Equity → Ownership, and click the Posting accounts gear beside Group structure.
2. Open Not used by your group. For each of the four Associate/JV accounts, choose a group account, or click + Create, enter the Account code and Account name, and click Create Account.
3. Click Save.

For Your Group:

Name the investment account Investment in Associates (or Investment in Joint Ventures) when you create it. BrizoConsol places it on the Investment in Associates line from its name. You can also choose it on Investment in Associates on the Balance Sheet tab of the Accounting Standard page. A share of profit account named Share of Profit of Associates goes on its P&L line the same way.

Until an associate is recorded, these four are listed under Not used by your group, because a group without associates doesn’t need them. A group with an associate does: BrizoConsol posts nothing for the associate until all four are saved.

3Classify the share of OCI

1. Open Settings → Organisation Settings → Accounting Standard, and under Account Classifications choose Equity in the Type column.
2. On Share of OCI of Associates, click Select accounts, tick 3700 Share of OCI of Associates, and click Apply.
3. Click Save Changes.

The reserve then shows under Other Components of Equity on the statement of financial position, and on the Share of OCI of Associates line of the OCI statement. Classifying equity is covered in Switch on Local GAAP and classify equity.

4Record the stake

1. Back on Ownership & Equity → Ownership, click Company G in Group structure.
2. Under Share purchases and sales, click + Record, then Bought shares.
3. Choose Your Group as Parent entity, Jul-2026 as the Month, 30 as the % transacted, and JV / Associate.
4. Enter the Investment cost (300,000), in the group currency, and click Add Record.
5. Open Totals and accounts for this company. For Investment in Company G (in Your Group’s books), choose the account Your Group’s own ledger carries the stake in, and click Save.

The relationship is your judgement: JV / Associate means the group has significant influence or joint control, not control. No fair value of net assets is asked for. For an associate, the investment account in Your Group’s books is the only account Totals and accounts for this company needs.

5See what BrizoConsol posts

BrizoConsol posts the purchase, then one entry each month from July, all to the group. Open Review → Elim. & Journals Report and search for JV-AUTO.

The share of profit is 30% of Company G’s profit after tax — its whole P&L, not line by line. The dividend comes from Company G’s Dividends Paid account, and the OCI from its reserves, such as Revaluation Reserve. The dividend entry takes the 15,000 back out of dividend income, where the group company that received it recorded it.

6Check the Local GAAP statements

1. Open Reports → All Reports → Consolidated Statement of Financial Position for Sep-2026.
2. Open Consolidated Statement of Profit or Loss, Consolidated Statement of Profit or Loss and Other Comprehensive Income and Consolidated Statement of Cash Flows for the same month.

7Know what else BrizoConsol handles

Some adjustments need judgement, so you post them as journals of type JV / Associate: extra depreciation on assets that were valued above book value at the purchase, income where the price was below the group’s share of the net assets at fair value, unrealised profit on sales between the group and Company G, impairment of the investment, and adjustments to bring Company G onto the group’s accounting policies.

8If something goes wrong