What amount should be recognized in profit or loss

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Question - A real estate entity, had a building with a carrying amount of 20,000,000 on December 31, 2018. The building was used as offices o fit entity's administrative staff. On December 31, 2018, the entity intended to rent out the building to independent third parties. The staff will be moved to a new building purchased early in 2018. The original building had a fair value of 35,000,000. The entity also had land that was held for sale in the ordinary course of business. The land had a carrying amount of 10,000,000 and fair value of 15,000,000 on December 31, 2018. On such date, the entity decided to hold the land for capital appreciation. The accounting policy is to carry investment property at fair value.

On December 31 2018, what amount should be recognized in profit or loss as a result of transfer of the building to investment property?

A. Nil

B. 15,000,000

C. 35,000,000

D. 20,000,000

On December 31 2018, what amount should be recognized in profit or loss as a result of transfer of the land to investment property?

A. Nil

B. 5,000,000

C. 15,000,000

D. 10,000,000

Reference no: EM132783419

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