Reference no: EM132912525
Question - On Sept 30, 2020, ABC acquired a building to earn rent through operating leases. The investment property was initially measured at 20,000,000. It has an estimated useful life of 25 years and a residual value of 400,000. It has a fair value of 22,000,000 and 23,000,000 as of the end of 2020 and 2021 respectively.
1. Using the cost model, what is the depreciation expense for the year 2020? Note that asset was acquired on Sept. 30.
2. Using the cost model, what is the carrying value of the investment property on Dec. 31, 2021?
3. Using the fair value model, what is the carrying value on Dec. 31, 2020?
4. Using the fair value model, what is the gain or (loss) from change in fair value?