Forrest Gump Company acquired a tree plantation assets for a lump-sum amount of P20,000,000 which is equal to the lump-sum value of the group of assets. At the time of purchase the company is unable to determine the fair value of the trees separately since no active market was clearly available. The other assets in the group had a determinable fair value. This other assets are listed below and their related fair values.

Land under trees 2,000,000

Roads in forest 1,000,000

What amount should the biological asset be initially recorded?

2. 
   

Answer rating: 100% (QA)

The biological asset trees in this scenario should be initially recorded a... View the full answer