An entity purchased an investment property on 1 January 20X3 for a cost of 3.5m. The property had an estimated useful life of 50 years, with no residual value, and at 31 December 20X5 had a fair value of 4.2m. On 1 January 20X6 the property was sold for net proceeds of 4m.

Calculate the profit or (loss) on disposal under both the cost and fair value (FV) model.

Answer rating: 100% (QA)

Under the cost model 1 Book Value at 31 December 20X5 The property is recorded at its ... View the full answer