Shoshin, Inc. owns land and building in Manila used for operations and administration. The company uses the cost model and provides you with the following information on January 1, 2019: Land: Cost-20,000,000 Fair value-28,000,000 Building: Cost - 40,000,000 Accumulated depreciation-10,000,000 Fair value - 35,000,000 On this date, the company transferred its business operations to Ortigas Center and leased out the land and building above to interested business friends under operating leases. The company uses the fair value model for all of its investment property. How much gain shall be reported in profit or loss resulting from this reclassification from owner-occupied property to investment property? THE ANSWER IS 0. Someone explain why it's 0.
Shoshin, Inc. owns land and building in Manila used for operations and administration. The company uses the cost model and provides you with the following information on January 1, 2019: Land: Cost-20,000,000 Fair value-28,000,000 Building: Cost - 40,000,000 Accumulated depreciation-10,000,000 Fair value - 35,000,000 On this date, the company transferred its business operations to Ortigas Center and leased out the land and building above to interested business friends under operating leases. The company uses the fair value model for all of its investment property. How much gain shall be reported in profit or loss resulting from this reclassification from owner-occupied property to investment property? THE ANSWER IS 0. Someone explain why it's 0.
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
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 13P
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Shoshin, Inc. owns land and building in Manila used for operations and administration. The company uses the cost model and provides you with the following information on January 1, 2019:
Land:
Cost-20,000,000
Fair value-28,000,000
Building:
Cost - 40,000,000
Accumulated depreciation -10,000,000
Fair value - 35,000,000
On this date, the company transferred its business operations to Ortigas Center and leased out the land and building above to interested business friends under operating leases. The company uses the fair value model for all of its investment property.
How much gain shall be reported in profit or loss resulting from this reclassification from owner-occupied property to investment property?
THE ANSWER IS 0. Someone explain why it's 0.
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