How much is the carrying amount of the property

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Real Company ventured into a construction of an 8-storey building. The board of directors of the entity decided that instead of selling the building to investor, the entity would hold this property for purposes of earning rentals by letting out space in the building for tenants.

The construction of the building was completed and the property was placed in service on April 1, 2020. The cost of the construction of the building was P90,000,000. The useful life is 10 years with a scrap value of P10,000,000.

The following fair values at each subsequent year-end were provided by an independent valuation expert:

December 31, 2020 105,000,000

December 31, 2021 100,000,000

December 31, 2022 135,000,000

Problem 1: Under cost model, how much is the carrying amount of the property on December 31, 2021?:

Problem 2: Under fair value model, how much is the gain from change in fair value to be recognized in 2022?:

Reference no: EM132700591

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