On July 1, 2020, Bar Inc. purchased 50,000 of Tell Inc.’s preference shares in exchange of a tract of Bar’s land which had a carrying amount of P1,200,000 in Bar’ books. The land also had a value in use of P2,000,000. The shares were classified as financial assets at fair value through profit or loss. If the fair value of Bar's land and Tell's shares cannot be reliably determined, how much should the FVPL investment be valued at initial recognition?
On July 1, 2020, Bar Inc. purchased 50,000 of Tell Inc.’s preference shares in exchange of a tract of Bar’s land which had a carrying amount of P1,200,000 in Bar’ books. The land also had a value in use of P2,000,000. The shares were classified as financial assets at fair value through profit or loss. If the fair value of Bar's land and Tell's shares cannot be reliably determined, how much should the FVPL investment be valued at initial recognition?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter7: Property Transactions: Basis, Gain And Loss, And Nontaxable Exchanges
Section: Chapter Questions
Problem 32P
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On July 1, 2020, Bar Inc. purchased 50,000 of Tell Inc.’s
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