CERTYNEX IFRS ACADEMY

Alba SA holds 30% of Brise SA, an associate. Brise reports a profit of 400,000. At the acquisition date, a building of Brise had a fair value 500,000 above its carrying amount; it is depreciated on a straight-line basis over the remaining 10 years (case data). What share of profit does Alba recognise?

120,000, i.e. 30% of the profit of 400,000 with no adjustment for the fair value excess.

135,000, i.e. 30% of the profit of 400,000 increased by 50,000 of additional depreciation.

15,000, i.e. 30% of the additional depreciation of 50,000 taken in isolation, without taking Brise's profit into account.

105,000, i.e. 30% of the profit of 400,000 reduced by 50,000 of additional depreciation.