Justin Company owns a building purchased on January 1, 2018 for P100 million. The building which is estimated to have a 25 years useful life was used as the company's head office. In 2022, the company transferred its head office and decided to lease out the old building. Tenants began occupying the old building by the end of 2022. On December 31, 2022, the company reclassified the building to investment. The fair value on this date was P86 million. 

 

Compute for the following:

If the company uses the cost model to measure the investment property, what will be the carrying amount of the investment on December 31, 2022?

If the company uses the fair value model to measure the investment property, how much should be recognized in the profit or loss for 2022 related to the investment?

Answer rating: 100% (QA)

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