CERTYNEX IFRS ACADEMY

An investment entity obtains control of another entity. How does it generally account for its investment in that subsidiary?

By line-by-line consolidation in consolidated statements, like any parent, since obtaining control requires consolidation whatever the nature of the investor.

By the equity method, its investments being treated as associates over which it does not exercise effective control.

At historical cost, fair value being used at the date of disposal of the subsidiary, when the gain is recognised.

At fair value through profit or loss under IFRS 9, without consolidating the subsidiary or applying IFRS 3, apart from the exception for a subsidiary providing services related to its investments.