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Under Ind AS 109, an entity that makes the IRREVOCABLE election to measure an equity instrument at FVOCI:
ARecognises fair-value changes in OCI only until the investment exceeds 20% of voting rights
BRecognises fair-value changes in P&L by default but moves them to OCI on impairment
CRecognises fair-value changes in OCI and recycles them to P&L on disposal of the instrument
DRecognises all subsequent fair-value changes in OCI; gains/losses are NEVER recycled to profit or loss, even on disposal
Answer & Solution
Correct answer: D. Recognises all subsequent fair-value changes in OCI; gains/losses are NEVER recycled to profit or loss, even on disposal
Para 5.7.5 + B5.7.1 — the FVOCI election for equity instruments is irrevocable at initial recognition. Subsequent FV changes go through OCI, and crucially they are NEVER recycled to P&L (even on disposal — accumulated gains/losses transfer within equity but don't enter P&L). This is a key contrast to FVOCI debt-instrument treatment, where amounts ARE recycled to P&L on derecognition.
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