Entity F, as a first-time adopter transitioning to IFRS, needs to reevaluate its accounting for its interest in a joint venture. According to IFRS, joint ventures should be accounted for using the equity method. If the carrying amount of the investment under the new standard (equity method) is lower than the carrying amount under the previous GAAP (proportionate consolidation), an impairment loss should be recognized.

Given that the aggregate carrying amount of the assets and liabilities of the joint venture is 350 million and the impairment test values the investment at 275 million, there is an impairment loss of 75 million.

The correct treatment is to recognize the investment at its impaired value, which is 275 million, and recognize the impairment loss in profit or loss. Therefore, the appropriate action is:

B. The entity should recognize its investment at 275 million and recognize an impairment loss of 75 million in profit or loss.

This approach reflects the change in the value of the investment and the recognition of the resulting loss in the period of transition to IFRS.