CERTYNEX IFRS ACADEMY

Orme SA held 80% of Pin SA and sells 60 points of it: it loses control and keeps 20%. Orme's share of the carrying amount of Pin's net assets for that 20% is 240,000, and the fair value of the retained interest at the date of loss of control is 300,000 (case data). At what amount is the retained interest recognised?

At its fair value at the date of loss of control, i.e. 300,000; the difference from 240,000 is taken into account in calculating the gain or loss.

At the share of the carrying amount of Pin's net assets, i.e. 240,000, with no difference to recognise since the investment has not been sold.

At the original cost of the stake in Pin, loss of control not changing the entry value of the investment.

At the average of fair value and share of carrying amount, i.e. 270,000, in order to smooth the effect of the loss of control.