EB Inc makes batteries and other parts for mobile devices. EB Inc operates in a non UK tax jurisdiction called FarAway. It prepares its financial statements using IFRS. Set out below are draft extracts from EB Inc's financial statements for the year ended 31 March 2022. Extracts from: Statement of comprehensive income for the year ended 31 March 2022 000 Profit before tax 4,917 Income tax - to be completed Profit for the year 4,917 Other comprehensive income to be completed Total comprehensive income 4,917 Statement of financial position for the year ended 31 March 2022 000 Property plant and equipment (Note 3) Plant and machinery Building Investment (Note 1) Receivables and cash (Note 3) Total assets Share capital Retained earnings Other reserves Non-current liabilities Deferred tax at 1 April 2021 (Note 2) Current liabilities (Note 3) Total equity and liabilities 45,554 9,500 12,100 10,900 78,054 20,000 24,405 6,000 5,250 3,482 18,917 78,054 The financial controller has prepared EB Inc's financial statements for the year ended 31 March 2022. However no adjustments have been made for EB Inc's investment (See Note 1) and for current and deferred taxation. The current tax rate is 25% and there are no changes expected to this tax rate in the future. Note 1 - Investment On 1 April 2021, EB Inc bought 10% of the ordinary shares in GTech Ltd for 12,100,000. At 31 March 2022, the fair value of this investment had increased to 18,000,000. EB Inc directors understand that there is an accounting policy choice EB Inc can make in respect of the subsequent recognition of this investment. As this is a long term investment, the directors would like to choose the accounting policy which has the least impact on the profit for the year to prevent volatility in reported earnings. In the tax jurisdiction where EB Inc operates, gains on investments give rise to a tax charge only when the investment is sold. a) In respect of EB Inc's investment in GTech Ltd (Note 1): i) Explain the possible IFRS treatments for the investment in EB Inc's financial statements for the year ended 31 March 2022; and (6 marks) ii) Assume that the directors select the accounting policy which has the least impact on the profit for the year, set out and explain the financial reporting treatment of EB Inc's investment in GTech Ltd in its financial statements for the year ended 31 March 2022. Include journal entries. (6 marks)