Which of the following is included in the calculation of investment in associates?

The calculation of investment in associates reflects the equity method of accounting, which requires recognizing not just the original cost of the investment but also the share of the associate's profits and losses after acquisition. Under this method, the investor reports its share of the net assets of the associate on its balance sheet.

Including the share of post-acquisition changes in net assets allows the investing company to recognize how much the value of the investment has increased or decreased due to the associate's operations and financial performance after the acquisition. This means that factors such as the associate's earnings, losses, and any other changes in equity contribute to the carrying amount of the investment.

This approach aligns with the underlying principle of consolidating financial information to represent a more complete and accurate picture of the economic reality of the relationships between entities. Thus, recognizing the share of post-acquisition changes in net assets ensures that the financial statements of the investor reflect the true performance and value of the investment in the associate over time.