Bergs Company owns a building purchased on January 1, 2018, for 50 million. The building was used as the company’s head office. The building has an estimated useful life of 25 years. In 2022, the company transferred its head office and decided to lease out the old building. Tenants began occupying the old building. On December 31,2022, the company reclassified the building as an investment property to be carried at fair value. The fair value on the date of reclassification was 42 million. How much should be recognized in the 2022 profit or
Bergs Company owns a building purchased on January 1, 2018, for 50 million. The building was used as the company’s head office. The building has an estimated useful life of 25 years. In 2022, the company transferred its head office and decided to lease out the old building. Tenants began occupying the old building. On December 31,2022, the company reclassified the building as an investment property to be carried at fair value. The fair value on the date of reclassification was 42 million. How much should be recognized in the 2022 profit or
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
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 6RE
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Bergs Company owns a building purchased on January 1, 2018, for 50 million. The building was used as the company’s head office. The building has an estimated useful life of 25 years. In 2022, the company transferred its head office and decided to lease out the old building. Tenants began occupying the old building. On December 31,2022, the company reclassified the building as an investment property to be carried at fair value. The fair value on the date of reclassification was 42 million. How much should be recognized in the 2022 profit or loss as a result of the transfer from owner -occupied to investment property?
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