On December 31, 2021, an entity has a building with cost of Rp500 million and accumulated depreciation of Rp250 million. The entity uses revaluation model on the building. The entity made a fair value adjustment to its building and recognized loss of Rp100 million on December 31, 2021. On January 5, 2022, the entity decided to lease out that owner-occupied building and transferred it to investment property using the fair value model. At the time of transfer, the fair value of the building was Rp280 million. The gain/loss recognized in profit or loss on the transfer will be a. gain of Rp130 million. b. gain of Rp30 million. O c. gain of Rp100 million. O d. loss of Rp130 million.
On December 31, 2021, an entity has a building with cost of Rp500 million and accumulated depreciation of Rp250 million. The entity uses revaluation model on the building. The entity made a fair value adjustment to its building and recognized loss of Rp100 million on December 31, 2021. On January 5, 2022, the entity decided to lease out that owner-occupied building and transferred it to investment property using the fair value model. At the time of transfer, the fair value of the building was Rp280 million. The gain/loss recognized in profit or loss on the transfer will be a. gain of Rp130 million. b. gain of Rp30 million. O c. gain of Rp100 million. O d. loss of Rp130 million.
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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Transcribed Image Text:On December 31, 2021, an entity has a building with cost of Rp500 million and accumulated
depreciation of Rp250 million. The entity uses revaluation model on the building. The entity
made a fair value adjustment to its building and recognized loss of Rp100 million on December
31, 2021. On January 5, 2022, the entity decided to lease out that owner-occupied building and
transferred it to investment property using the fair value model. At the time of transfer, the fair
value of the building was Rp280 million. The gain/loss recognized in profit or loss on the
transfer will be
a. gain of Rp130 million.
O b. gain of Rp30 million.
O .gain of Rp100 million.
O d. loss of Rp130 million.
Transcribed Image Text:On January 1, 2021, an entity purchased a building to be leased to a 3rd party. The cost of the
building was Rp320 million. The entity estimates the useful life of the buildings is 20 years
(straight-line method) and the residual value of Rp20 million. The fair value of the building as of
December 31, 2021 was Rp325 million. On July 1, 2022, the entity decided to use the building
for its own office building. On that date, the fair value of the building was Rp300 million. If the
entity uses cost model for its investment property and building, the carrying amount of building
immediately after the transfer on July 1, 2022 will be
O a. Rp320 million.
O b. Rp305 million.
c. Rp297,500,000.
O d. Rp300 million.
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