x8, Pares Company classified its property interest under an operating lease from Allan Company, the lessor, as an investment property. The asset was recognized at P 8M with an estimated remaining useful life of 15 years. The fair value of such asset is P 8.1M on December 31, 20x8. Pares adopts the cost model in valui
x8, Pares Company classified its property interest under an operating lease from Allan Company, the lessor, as an investment property. The asset was recognized at P 8M with an estimated remaining useful life of 15 years. The fair value of such asset is P 8.1M on December 31, 20x8. Pares adopts the cost model in valui
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 60P
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- On January 1, 20x8, Pares Company classified its property interest under an operating lease from Allan Company, the lessor, as an investment property. The asset was recognized at P 8M with an estimated remaining useful life of 15 years. The fair value of such asset is P 8.1M on December 31, 20x8. Pares adopts the cost model in valuing its investment properties subsequent to initial recognition. The investment property account of Pares, excluding the transaction described above, is composed of the following:
Asset |
CV 1/1/x8 |
Remaining Useful Life |
FV 12/31/x8 |
A |
4.5M |
NA |
5M |
B |
6.55M |
16 |
4.89M |
C |
10.6M |
20 |
11.050M |
If Pares uses the straight-line method in computing for
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