Your boss wants to show strong earnings per share (EPS) for your company, IFRS Co. She is trying to understand the effect of the purchase of 30% of ABCs shares at the beginning of the year on EPS. She is considering the FV-NI, FV-OCI, or equity method models.

The ABC investment details are as follows:

Cost of shares $2000

Fair value of shares at year end $2200

Dividends received during the year from ABC $120

Total net income of ABC during year $900

Required:

Calculate the effect on EPS for the investment for each of the models and conclude your analysis on which model she might prefer. Show and label your calculations.