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What amount of impairment loss Shirogane Company recognize

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Question - On January 2, 2011, Shirogane Company acquired a building costing P10,000,000. Shriogane Company estimated that the useful life of the property is 20 years. Shirogane's policy is to depreciate all depreciable assets using the straight-line method, without residual value. On January 2, 2016, the building has a recoverable value of P9,000,000 based on its revised remaining useful life of 20 years and Shirogane Company immediately remeasured the building. It is the company's policy to transfer portion of any revaluation surplus to retained earnings to all depreciable assets. On January 2, 2021, Shirgoane Company converted the property into investment property when the fair value is P5,000,000.

Required -

a. On January 2, 2021, what amount of revaluation surplus that should be reversed?

b. What amount of impairment loss should Shirogane Company recognize in its income statement on the date of transfer?

Reference no: EM132523012

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