An entity purchased an office building with a useful life of 50 years for GHC5.5 million on 1 January 2006. (The amount attributable to land was negligible). The entity used the building as its head office for five years until 31 December 2010, when the entity moved its business into larger premises. The building was reclassified on that date as an investment property and leased under a 40-year lease. The fair value of the head office at 31 December 2010 was GHC6 million. Explain the treatment of the office building on the assumption that the entity uses the fair value model for investment properties
An entity purchased an office building with a useful life of 50 years for GHC5.5 million on 1 January 2006. (The amount attributable to land was negligible). The entity used the building as its head office for five years until 31 December 2010, when the entity moved its business into larger premises. The building was reclassified on that date as an investment property and leased under a 40-year lease. The fair value of the head office at 31 December 2010 was GHC6 million. Explain the treatment of the office building on the assumption that the entity uses the fair value model for investment properties
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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An entity purchased an office building with a useful life of 50 years for GHC5.5 million on 1 January 2006. (The amount attributable to land was negligible). The entity used the building as its head office for five years until 31 December 2010, when the entity moved its business into larger premises. The building was reclassified on that date as an investment property and leased under a 40-year lease. The fair value of the head office at 31 December 2010 was GHC6 million. Explain the treatment of the office building on the assumption that the entity uses the fair value model for investment properties
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