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An investor's interest in an associate is held PARTIALLY through a venture capital organisation. Under Ind AS 28:
ABoth portions must be carried at cost less impairment
BThe entire interest must be carried under equity method
CBoth portions must be measured at FVTPL
DThe entity may ELECT to measure the portion held through the venture capital organisation at FVTPL (Ind AS 109), regardless of whether the VC organisation has significant influence over that portion, while applying the equity method to the remaining portion
Answer & Solution
Correct answer: D. The entity may ELECT to measure the portion held through the venture capital organisation at FVTPL (Ind AS 109), regardless of whether the VC organisation has significant influence over that portion, while applying the equity method to the remaining portion
Ind AS 28 Exemption 3 expressly permits a mixed-treatment election: the VC-held portion at FVTPL, and the directly-held portion at equity method. This is regardless of whether the VC entity itself has significant influence over that portion.
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