Where is the group's share of associates' profits presented in the financial statements?

The group's share of associates' profits is correctly presented as a single line under non-current assets. This is attributable to the accounting treatment of investments in associates. When a company has significant influence over another entity, typically through ownership of 20% to 50% of the voting power, it accounts for that investment using the equity method. Under this method, the investment is initially recorded at cost and subsequently adjusted to reflect the group's share of the associate's profits or losses.

This presentation under non-current assets aligns with the nature of the investment, as it is not expected to be liquidated or converted into cash within a year but rather provides long-term benefits to the group. As the associates generate profits or incur losses, these are reflected in the carrying amount of the investment on the balance sheet, rather than being shown directly in the income statement.

Other options don’t appropriately represent the accounting standards regarding associates. Current liabilities pertain to obligations to pay short-term debts, operating expenses relate to costs incurred in day-to-day operations, and a deduction in the profit before tax line is not how share of profits from associates is accounted, since this profit contributes positively to the overall profitability of the group. Thus, the correct presentation reflects the equity method's application and the