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What amount of cumulative loss should be reported

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Q1) On January 1, 2019, Big Bang Company acquired a nontrading equity investment for P5,000,000. On December 31, 2019, the market value of the investment was P4,000,000. On December 31, 20200, the issuer of the equity instrument was in severe financial difficulty and the fair value of the entity investment had fallen to P2,300,000. What amount of cumulative loss should be reported in the statement of changes in equity for 2020 as component of other comprehensive income if the investment is designated ad measured at FVTOCI?

Q2) On January 1, 2019, Mega Company acquired 10% of the outstanding ordinary shares of Penny Company for P4,000,000. The investment was appropriately accounted for under cost method.

On January 1, 2020, Mega gained the ability to exercise significant influence over financial and operating control of Penny by acquiring an additional 20% of Penny's outstanding ordinary shares for P10,000,000.

The fair value Penny's net assets equalled carrying amount. The fair value of the 10% interest on January 1, 2020 was P6,000,000.

What is the investment income in 2019?

Reference no: EM132937707

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