CERTYNEX IFRS ACADEMY

Alba SA contributes to Brise SA, its associate, land that does not constitute a business, in exchange for an interest in Brise. What principle governs the treatment of the gain or loss on that contribution in Alba's financial statements?

It is treated like other transactions between the investor and the associate: the gain or loss is recognised only to the extent of unrelated investors' interests.

It is recognised in profit or loss for the total amount at the date of contribution, an exchange of land for an interest being an ordinary sale.

It is deferred in full in the statement of financial position until the interest in Brise is sold, whatever the share held by third parties.

It is recognised in other comprehensive income, then reclassified to profit or loss on the sale of the interest in Brise.