Reference no: EM133005307

Question - On July 1, 20x4, Thunder company is committed to plan to sell a disposal group that represents a significant portion of its regulated operations. The sale requires regulatory approval, which could extend the period required to complete the sale beyond one year. Actions necessary to obtain that approval cannot be initiated until after a buyer is known and a firm purchase commitment is obtained. However, a firm purchase commitment is highly probable within one year. The non current assets of the disposal group have a carrying value of P4 million and liabilities of P1 million. The total fair market value as of December 31, 20x4 of the disposal group is P4.8 million. If the sale is completed within one year, the estimated cost to sell is P0.2 million, but if the sale will extend beyond one year, the present value of the estimated cost to sell is P0.18 million. If the sale will extend beyond one year, what amount of gain or loss should the company report in its profit or loss?