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What amounts would be included in the statement

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Question - On January 1, 2014 abc ltd. purchased a property (land with building) for its investment potential. The acquisition cost of the property was 5 Mio. EUR (comprising a piece of land for 1 Mio. EUR and a building for 4 Mio. EUR) with overall transaction costs of 300.000 EUR. The building has a useful life of 50 years. At the end of year 2014 the fair value of the property is 1.100.00 EUR (land) and 4.180.000 (building).

a) Show the amounts which would be included in the financial statements of ABC Ltd. at December 31, 2014 under the cost model and under the fair value model.

b) Suppose that the property was sold on July 1, 2015 for 5.800.000 EUR (comprising the piece of land for 1.200.000, EUR and the building for 4.600.000 EUR), and that selling costs were 60.000 EUR. What amounts would be included in the statement of comprehensive income for year 2015 in respect of this disposal under the cost model and under the fair value model?

Reference no: EM132596858

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