Entity A acquired 30% of entity B several years ago for £1,000. Entity A accounts for its investment in B as an associate and applies the equity method of accounting. The carrying amount of the investment in associate B is £5,000 in A's financial statements at the year ended December 2007. At 1 January 2008, entity A acquires the remaining 70% stake in B. Based on the acquisition date fair values, the fair value of the previous 30% stake in B is £10,000. Assuming that A has chosen to early adopt IFRS 3 (Revised), Business Combinations (an EU company will be able to early adopt the amendment only once it has been endorsed by the EU), how would it account for its previously held interest on the date of acquisition?
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