PERIODIC REGULAR Co. acquired a building on January 1, 20x1 for a total cost of ₱24,000,000 and classified it as investment property. PERIODIC Co. uses the fair value model for its investment property. On January 1, 20x5, when the carrying amount of the building is ₱16,000,000, the elevator in the building was replaced for a total cost of ₱3,200,000. It is impracticable to determine the fair value of the replaced part. The fair value of the building on December 31, 20x5 is ₱17,200,000. How much is the loss recognized during the year? * a. 3,200,000 b. 2,000,000 c. no loss d. indeterminable
PERIODIC REGULAR Co. acquired a building on January 1, 20x1 for a total cost of ₱24,000,000 and classified it as investment property. PERIODIC Co. uses the fair value model for its investment property. On January 1, 20x5, when the carrying amount of the building is ₱16,000,000, the elevator in the building was replaced for a total cost of ₱3,200,000. It is impracticable to determine the fair value of the replaced part. The fair value of the building on December 31, 20x5 is ₱17,200,000. How much is the loss recognized during the year? * a. 3,200,000 b. 2,000,000 c. no loss d. indeterminable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PERIODIC REGULAR Co. acquired a building on January 1, 20x1 for a total cost of ₱24,000,000 and classified it as investment property. PERIODIC Co. uses the fair value model for its investment property. On January 1, 20x5, when the carrying amount of the building is ₱16,000,000, the elevator in the building was replaced for a total cost of ₱3,200,000. It is impracticable to determine the fair value of the replaced part. The fair value of the building on December 31, 20x5 is ₱17,200,000. How much is the loss recognized during the year? *
a. 3,200,000
b. 2,000,000
c. no loss
d. indeterminable
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