Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful life of 10 years and no residual value. On December 31, 2022, the entity classified the asset as held for sale. The fair value of the equipment on December 31, 2022 is P3,300,000 and the cost of disposal is P100,000. On December 31, 2023 , the fair value of the equipment is P3,800,000 and the cost of disposal is P200,000. On December 31, 2023, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the assets but to continue to use it. What is the measurement of the equipment that ceases to be held for sale on December 31, 2023?
Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful life of 10 years and no residual value. On December 31, 2022, the entity classified the asset as held for sale. The fair value of the equipment on December 31, 2022 is P3,300,000 and the cost of disposal is P100,000. On December 31, 2023 , the fair value of the equipment is P3,800,000 and the cost of disposal is P200,000. On December 31, 2023, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the assets but to continue to use it. What is the measurement of the equipment that ceases to be held for sale on December 31, 2023?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Clara Company purchased equipment for P5,000,000 on January 1, 2021 with a useful life of 10 years and no residual value. On December 31, 2022, the entity classified the asset as held for sale. The fair value of the equipment on December 31, 2022 is P3,300,000 and the cost of disposal is P100,000.
On December 31, 2023 , the fair value of the equipment is P3,800,000 and the cost of disposal is P200,000.
On December 31, 2023, the entity believed that the criteria for classification as held for sale can no longer be met.
Accordingly, the entity decided not to sell the assets but to continue to use it.
What is the measurement of the equipment that ceases to be held for sale on December 31, 2023?
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