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3. M COMPANY accounted for noncurrent assets using the cost model. On July 1, 2017,
the entity classified an equipment as held for sale. At that date, carrying amount was
P5,000,000, the fair value was estimated at P3,500,000 and the cost of disposal at
P100,000. On December 31, 2017, the equipment was sold for net proceeds of
P2,500,000. What amount should be included as an impairment loss for 2017?
4. N COMPANY accounted for noncurrent assets using the revaluation model. On October
1, 2017, the entity classified a land as held for sale. At that date, the carrying amount
of the land was P5,000,000 and the balance in the revaluation surplus was
P1,500,000. At same date, the fair value of the land was estimated at P5,500,000 and
the cost of disposal at P100,000. On December 31, 2017, the fair value less cost of
disposal of the land did not change. The land was sold on January 31, 2018 for
P6,000,000. What amount should be reported as gain on disposal of land in 2018?
On December 31, 2017, the entity believed that the criteria for classification as held
for sale can no longer be met. Accordingly, the entity decided not to sell the asset but
to continue to use it. On December 31, 2017, the fair value less cost of disposal of the
equipment was P2,700,000.