When the parent has previously held equity interest in the subsidiary, in accordance with IFRS 3.42, the parent revalues the previously held investment to fair value, recognizing the increment in ___________________.
A)retained earnings.
B)net income.
C)assets.
D)other comprehensive income.

Question

Quizplus · Accepted Answer

Under IFRS 3.42, when a parent acquires control of a subsidiary and has previously held an equity interest in the subsidiary, the parent revalues its previously held equity interest to its fair value at the acquisition date. The difference between the fair value and the carrying amount of the previously held equity interest is recognized in net income.

When the Parent Has Previously Held Equity Interest in the Subsidiary