An entity has long-term loan ₹3,00,000 to an associate (substantively part of net investment), preference shares ₹5,50,000 (Ind AS 109 fair-value uplift ₹30,000 to ₹5,80,000), and equity shares ₹2,00,000 carrying amount at start of year 5. The associate earned ₹10,00,000 profit attributable to the entity. The ENTIRE share of profit allocated to which instrument?

When the entity has previously absorbed losses against equity first, then preference / long-term receivables (in reverse order of seniority), the subsequent profits are reallocated in the OPPOSITE order — equity first. With no prior losses on preference shares or loan, profits return entirely to equity shares. Closing equity carrying amount: 2,00,000 + 10,00,000 = 12,00,000.