How much is the gain on reclassification

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Problem 1: On January 1, 2016, CACAL Co. acquired 10%, ?4,000,000 bonds for ?3,807,853. The objective of CACAL's business model is to sell such bonds in the near term to take advantage of fluctuations in fair values for short-term profit taking. Accordingly, the bonds were classified as held for trading securities. On December 31, 2016, the bonds are quoted at 98. On September 30, 2017, CACAL Co. changed its business model. It was ascertained that the investment should be reclassified to financial asset measured at amortized cost on reclassification date. The bonds were quoted at 101, 103 and 104 on September 30, 2017, December 31, 2017 and January 1, 2018, respectively. How much is the gain (loss) on reclassification?

Reference no: EM132915487

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