Share of profit and of other comprehensive income

Learning objectives

• Calculate the investor's share of the investee's profit or loss and other comprehensive income after acquisition.L1, L2, L3
• Record the share of profit or loss and of other comprehensive income in the carrying amount of the investment.L2, L3

Normative references

• IAS 28 §10Under the equity method, the investment in an associate or a joint venture is initially recognised at cost, and its carrying amount is then increased or decreased to recognise the investor's share of the investee's profit or loss after the date of acquisition, that share being recognised in the investor's profit or loss; distributions received reduce the carrying amount; adjustments are also required for the investor's share of changes in the investee's other comprehensive income (for example, revaluation of property, plant and equipment, foreign exchange translation differences), recognised in the investor's other comprehensive income.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

3 questions

• Alba SA holds {ownership} of Brise SA, an associate. Brise reports a profit of {associate_profit} after the acquisition. Case convention: no fair value adjustment, no difference in policies and no intragroup elimination. Calculate Alba's share of profit.L1
• Alba SA holds {ownership} of Brise SA, an associate. Brise recognises {associate_oci} of other comprehensive income during the year (case data). Record the entry that recognises Alba's share of that other comprehensive income.L2
• Explain how the carrying amount of an interest in an associate changes after initial recognition, stating the effect of profit or loss, other comprehensive income and distributions.L3