Entity D is a first-time adopter in 20X9. Under IFRS, it is required to consolidate Entity K, a subsidiary that it did not previously consolidate under other GAAP. Entity K had not yet adopted IFRS. Which of the following options could Entity D use to account for its investment in Entity K in its consolidated financial statements?
A. Entity D shall measure the assets and liabilities of the subsidiary at the same carrying amounts of Entity K, after adjusting for consolidation.
B. Entity D shall adjust the carrying amounts of the subsidiary's assets and liabilities to the amounts that IFRS would require in the subsidiary's statement of financial position.
C. Entity D shall measure the assets and liabilities of the subsidiary at the same carrying amounts of Entity K with no adjustment.
D. Entity D shall measure the assets and liabilities of the subsidiary at the fair value of Entity K, after adjusting for consolidation.
B. Entity D shall adjust the carrying amounts of the subsidiary's assets and liabilities to the amounts that IFRS would require in the subsidiary's statement of financial position. When a first-time adopter consolidates a subsidiary under IFRS for the first time, the carrying amounts of the subsidiary's assets and liabilities should be adjusted to reflect the values that IFRS would require if Entity K had been applying IFRS from the beginning. This approach reflects the transition requirements under IFRS for the initial consolidation of a subsidiary.
