The correct answer is: The parent company exercises significant influence over the associate and therefore includes it in its consolidated accounts using the equity method.

A parent company will not have control over an associate. However it will reflect the degree of significant influence it has by equity accounting for the net assets of the associate and its income statement for the year.

If a company has joint control of an entity it usually has a 50% stake in that venture which confers more than a significant influence. The investment would therefore be accounted for using either equity accounting or proportionate consolidation.