Included within the financial assets of Zinet Co at 31 March 20X9 are the following two recently purchased investments in publically-traded equity shares:

Investment 1 – 10% of the issued share capital of Haruka Co. This shareholding was acquired as a long-term investment as Zinet Co wishes to participate as an active shareholder of Haruka Co. Investment 2 – 10% of the issued share capital of Lukas Co. This shareholding was acquired for speculative purposes and Zinet Co expects to sell these shares in the near future. Neither of these shareholdings gives Zinet Co significant influence over the investee companies. Wherever possible, the directors of Zinet Co wish to avoid taking any fair value movements to profit or loss, so as to minimise volatility in reported earnings. How should the fair value movements in these investments be reported in Zinet Co’s financial statements for the year ended 31 March 20X9? A.In profit or loss for both investments B.In other comprehensive income for both investments C.In profit or loss for investment 1 and in other comprehensive income for investment 2 D.In other comprehensive income for investment 1 and in profit or loss for investment 2

时间:2023-08-24 11:41:51

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