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 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 balance sheet as an asset, and dividends from the ownership are reported in income statement. In Europe, investments into associate companies are called fixed financial assets.

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

See also

• Equity method
• Consolidation (business)

External links

• Definition of Associate — Finance dictionary
• Basis of Consolidation

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