On 31 December 20X8, Entity A holds a 40% non-controlling interest in Investee X that is accounted for under IAS 28 Investment in Associates and Joint Ventures using the equity method of accounting. Entity A acquires the other 60% interest in Investee X from Entity B on 31 March 20X9, which gives it control of Investee X. How should entity A account for its previously held interest in Investee X under IFRS 3?

The acquirer remeasures its previously held interest in the acquiree at its acquisition-date fair value and recognizes the result in other comprehensive income.

The acquirer does not remeasure its previously held interest in the acquiree; any difference between the fair value of the previously held interest and its carrying value on the date of acquisition is recognized in goodwill.

The acquirer does not remeasure its previously held interest in the acquiree; the carrying value of the interest on the acquisition date is included in the consideration transferred to acquire the entity.

The acquirer remeasures its previously held interest in the acquiree at its acquisition-date fair value and recognizes the result in profit or loss.