CERTYNEX IFRS ACADEMY

Alba SA sells part of its interest in Brise SA, an associate. Case convention: the analysis of the facts concludes that Alba loses significant influence at the date of the sale, and the retained interest is a financial asset. What treatment does Alba apply from that date?

It continues to equity-account the retained interest until the next reporting date, then reclassifies that interest as a financial asset at that time.

It keeps the interest at its previous carrying amount, with no remeasurement, and recognises no gain or loss at the date of loss of influence, any difference being carried forward.

It discontinues the equity method, measures the retained interest at fair value and recognises in profit or loss the gain or loss relating to the loss of influence.

It discontinues the equity method and takes the gain or loss relating to the loss of influence directly to equity, outside profit or loss.