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What is an associate and how do we account for it

For consolidated financial reporting, we need to account for it correctly

IFRS says:

An associate is an entity over which the investor has significant influence.

IFRS says:

Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control of those policies.

What is control compared to significant influence?

Control is typically ownership of 50% or more and the accounts need to be consolidated, which is a different accounting method.

What is the accounting process for significant influence?

It is called "Equity Accounting".

Here is a summary:

The equity method is a method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor’s share of the investee’s net assets.

The investor’s profit or loss includes its share of the investee’s profit or loss and the investor’s other comprehensive income includes its share of the investee’s other comprehensive income.