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What is the book value of investment in joint venture

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On January 1, 20XA, Tanner Inc. a small and medium enterprise (SME), invested P500,000 cash in a joint venture for 50% interest. For the year ended December 31, 20XA, the joint venture reported net income of P200,000 and distributed cash dividend in the amount of P60,000. As of December 31, 20XA, the fair value of the investment in joint venture is P600,000 and the estimated cost of disposal is 10% of fair value. The value in use of the investment is estimated at P550,000.

Problem 1: Under the IFRS for SMEs, what is the book value of investment in joint venture to be reported by Tanner Inc. as of December 31, 20XA if the SME elects equity method? (Problem provided below) Show your solution.

a. P550,000 b. P600,000 c. P570,000 d. P500,000

Reference no: EM132779985

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