Investment Property

Investment Property

Galore Company ventured into construction of a condominium in Makati. The BOD decided that instead of selling the condominium, the entity would hold this property for purposes of earning rentals. The construction was completed and the property was placed in service on January 1, 2019. The cost of the construction was P50,000,000. The useful life of the condominium is 25 years and the residual value is P5,000,000. An independent valuation expert provided the following fair value at each subsequent year-end: December 31, 2019 December 31, 2020 December 31, 2021

55,000,000 53,000,000 60,000,000

1. Under cost model, what amount should be reported as depreciation of investment property for 2021?

Galore Company ventured into construction of a condominium in Makati. The BOD decided that instead of selling the condominium, the entity would hold this property for purposes of earning rentals. The construction was completed and the property was placed in service on January 1, 2019. The cost of the construction was P50,000,000. The useful life of the condominium is 25 years and the residual value is P5,000,000. An independent valuation expert provided the following fair value at each subsequent year-end: December 31, 2019 December 31, 2020 December 31, 2021

55,000,000 53,000,000 60,000,000

2. Under fair value model, what amount should be recognized as gain from change in fair value for 2020?

Eragon Company and its subsidiaries own the following properties at yearend: Land held by Eragon for undetermined use 5,000,000 A vacant building owned by Eragon and to be leased out under an operating lease 3,000,000 Property held by a subsidiary of Eragon, a real estate firm, in the ordinary course of business 2,000,000 Building owned by subsidiary of Eragon and for which subsidiary provides security and maintenance services to lessees 1,500,000 3. What is the total investment property that should be reported in the consolidated statement of financial position of the parent and its subsidiaries?

Eragon Company and its subsidiaries own the following properties at yearend: Land held by Eragon for undetermined use 5,000,000 A vacant building owned by Eragon and to be leased out under an operating lease 3,000,000 Property held by a subsidiary of Eragon, a real estate firm, in the ordinary course of business 2,000,000 Building owned by subsidiary of Eragon and for which subsidiary provides security and maintenance services to lessees 1,500,000 4. What is the total amount that should be reported as owner occupied property and included as PPE in the consolidated statement of financial position?

Diamond Company own the following properties at year-end: Land held by Diamond for determined use 5,000,000 A vacant building owned by Diamond and to be leased out under a finance lease 3,000,000 Property held by Diamond, a real estate firm, in the ordinary course of business 2,000,000 Land held for future factory site 3,5000,000 Machinery leased out to an unrelated party under an operating lease 1,000,000 5. What is the total investment property that should be reported ?