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Find what amount should be recognized in profit or loss

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Reference no: EM132724845

Gina Company purchased equipment for P5,000,000 on January 1, 2019 with a useful life of 10 years and no residual value. On January 1, 2021, the entity classified the asset as held for sale. The fair value of the equipment on January 1, 2021 is P3,300,000 and the cost of disposal is P100,000.

On December 31, 2021, the fair value of the equipment is P3,800,000 and the cost of disposal is P200,000. On the same date, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the asset but to continue to use it.

Problem 1: What amount should be recognized in profit or loss as a result of the reclassification in 2021?

Reference no: EM132724845

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