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How much should be recognized in the profit or loss

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Question - Diffun, Inc. owns a building purchased on January 1, 2005 for P50 million. The building was used as the company's head office. The building has an estimated useful life of 25 years. In 2009, the company transferred its head office and decided to lease out the old building. Tenants began occupying the old building by the end of 2009. On December 31, 2009, the company reclassified the building as investment property to be carried at fair value. The fair value on the date of reclassification was P42 million. How much should be recognized in the 2009 profit or loss as a result of the transfer from owner-occupied to investment property?

a. P500,000

b. P8,000,000

c. P0

d. P2,000,000

Reference no: EM132702436

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