An associate company (or associate) in

accounting Accounting, also known as accountancy, is the process of recording and processing information about economic entity, economic entities, such as businesses and corporations. Accounting measures the results of an organization's economic activit ...

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 A subsidiary, subsidiary company, or daughter company is a company (law), company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidia ...

, with its financial statements being consolidated into the parent's books. Associate value is reported in the

balance sheet In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business ...

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.Companies Act 2006
section 256

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Basis of Consolidation
Corporate law Mergers and acquisitions Financial accounting {{accounting-stub