On June 12, 2019, L Company classified a non-current as "Held for Sale." On this date, before its reclassification, its amount was P5,000,000 and its expected selling price was P4,500,000 with expected cost to sell of P300,000. By December 31, 2019, the asset had not yet been sold, but the management is still committed to a plan to sell it, and the sale considered to bc highly probable. The entity estimated that because of recent changes for the demand of the product that is produced by the asset and expected favorable price movement, the asset was now expected to be selling at P5,500,000 with related cost to sell unchanged. Depreciation from July 1 to December 31 would have been P500,000.

What amount of gain shall be recognized at December 31, 2019 as a result of the increase in the fair value less cost to sell of the asset? (Write an explanation also.)

Answer rating: 100% (QA)

To determine the amount of gain recognized at December 31 2019 as a result of the increase in the fa... View the full answer