CERTYNEX IFRS ACADEMY

Alba SA has reduced its interest in Brise, an associate, to zero. Alba has legally undertaken to guarantee a loan of Brise. Its share of the additional losses for the year is 60,000, and the bank has called the guarantee: Alba paid 25,000 on behalf of Brise. What can Alba recognise in respect of these additional losses?

A liability of 60,000, because the equity method requires the share of losses for the year to be recognised in full, even beyond the interest.

A liability to the extent of its legal obligation and of the payments made on behalf of Brise, and not for the whole share of 60,000.

A liability corresponding to the 25,000 paid, the legal guarantee given to the bank not creating a separate obligation to recognise.

An amount recorded in other comprehensive income up to 60,000, the investment being unable to absorb the loss in profit or loss.