CERTYNEX IFRS ACADEMY

Alpha SA acquires 5% of the shares of a listed company, not held for trading, and elects to measure them at FVOCI. A year later, it sells these shares with accumulated gains of 12,000 in OCI. How should this accumulated amount be treated?

It stays in OCI, with no reclassification to profit or loss on sale.

It is reclassified to profit or loss at the date of sale.

It is reclassified to profit or loss, because the election lapses at the date of sale.

It is reclassified to profit or loss if the sale yields a gain, and stays in OCI in case of a loss.