Question: Entity C is a first-time adopter in 20X9, whereas Entity J (its subsidiary) has applied IFRS since 20X2. Entity J is a controlled subsidiary of

Entity C is a first-time adopter in 20X9, whereas Entity J (its subsidiary) has applied IFRS since 20X2. Entity J is a controlled subsidiary of Entity C under IFRS 10 but was not consolidated under previous GAAP. How should Entity C account for its investment in the subsidiary in its consolidated financial statements? Entity C shall measure the assets and liabilities of the subsidiary at the same carrying amounts of Entity J, after adjusting for consolidation and for the effects of the business combination in which the entity acquired the subsidiary. Entity C shall measure the assets and liabilities of the subsidiary at the fair value of Entity J, after adjusting for consolidation. Entity C shall measure the assets and liabilities of the subsidiary using the carrying amounts based on Entity Js date of transition to IFRS, after adjusting for consolidation and for the effects of the business combination in which the parent acquired the subsidiary. Entity C should account for its investment in its subsidiary under the equity method of accounting.

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