Unrealised profits on both upstream and downstream transactions between an investor and an associate are to be eliminated under accounting standard AASB 128 Investments in Associates and Joint Ventures.

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According to AASB 128, unrealised profits on both upstream and downstream transactions between an investor and an associate are to be eliminated. This means that if an investor sells goods or services to an associate or purchases goods or services from an associate, any unrealized profits on those transactions must be eliminated to reflect the investor's true percentage ownership of the associate.

Unrealised Profits on Both Upstream and Downstream Transactions Between an Investor