The following information was obtained in relation to the audit of the Investment Account of Domantas Company: Domantas Company has a single investment obtained on 1 January 2021 and it is a 5-year P4,000,000 debt investment with a stated rate of 12%, with the following information:

	Market rates
Jan 1, 2021	10%
Dec 31, 2021	9%
Dec 31, 2022	11%

The investment was designated at fair value through other comprehensive income based on the business model of the company. On December 31, 2022, the investment was reclassified as a financial asset at amortized cost. The fair value on the date of reclassification was the same as the fair value on December 31, 2022.

Required:

1. How much is the UGL-OCI (cumulative) (to be presented in the Balance Sheet) for the period ending December 31, 2021?

2. Assuming that instead of being reclassified to FA-AC on 31 December 2022, the investment was reclassified to FA-FVPL, what amount of FA-FVPL should be recognized on the Balance Sheet dated 31 December 2022?

3. Assuming that instead of being reclassified to FA-AC on 31 December 2022, the investment was reclassified to FA-FVPL, what amount of gain or loss should be recognized on the Income Statement for the period ending 31 December 2022?

Answer rating: 100% (QA)

Answers Solution Part 1 First we calculate the value to be recorded in books of account as on 1 Janu... View the full answer