Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised inmmediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operation policies of the entitiy so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence wher it has the power to participate in the financial and operation decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly cntrolled entities.