Reference no: EM133188220

Questions -

Q1. On December 31, 2020, Bergs Co. classified its building with a carrying amount of P2,000,000 and fair value less cost to sell of P1,650,000 as held for sale. Consequently, an impairment loss of P350,000 was recognized on that date. The building was not sold in 2021. However, the exception to the one-year requirement was met. On December 31, 2021, the fair value less cost to sell of the building is P1,550,000.

The building was not sold in 2022 and the exception to the one-year requirement was still met. The fair value less cost to sell of building increased to P2,100,000 on December 31, 2022.

What the amount of gain on reversal of impairment to be recognized in 2022?

Q2. Bergs Company's accounting policy with respect to investment property is fair value model at the end of each reporting period. One investment property had a fair value of P8,000,000 on December 31, 2021. The property was acquired on January 1, 2021 for a total of P7,600,000, made up of P6,900,000 paid to the vendor, P300,000 to the local authority as property transfer tax and P400,000 paid to professional advisers. The useful life of the property is 40 years. What amount should be recognized as gain for 2021 in respect of the investment property?