Invesment Associate

Problem 1 Problem 1
1 Invesment in associate 2,400,000 Total Investment Property
Cash 2,400,000 Land held by the parent for un
A vacant building owned by the
2 Investment in associate 300,000 Building owned by a subsidiary
Investment Income (1,500,000*20%) 300,000 Property under construction fo

3 Memo- Received 2,000 shares as 10% share dividend on 20,000

ordinary shaes. Shares now held 22,000 shares. 2. Excluded from investment p
Inventory
4 Loss on investment 60,000 Property, Plant and Equipmen
Investment in associate 60,000

5 Cash 100,000
Investment in associate 100,000 Machinery is not included in in
Machinery leased out by the
B Implied Goodwill
Acquisition cost 2,400,000 Problem 2
Carrying amount of net acquired 1,600,000 Cost m
(20% * 8,000,000) 1. to record the acquisition o
Goodwill 800,000
Investment Property
C carrying amount of investment on Decembere 31 2020 Cash
Investment Associate 2,400,000
Investment Associate 300,000
Investment Associate 60,000 2. To record the subsequent
Investment Associate 100,000
2,700,000 160,000 Depreciation expense
carrying amount of investment on Decembere 31 2020 2,540,000 Accumulated depreciation

Acquisition cost
Residual Value
Depreciation amount
Annual depreciation
(45,000,000 * 25 years)
Total Investment Property
Land held by the parent for undetermined use 5,000,000
A vacant building owned by the parent and to be leased out under operating lease 3,000,000
Building owned by a subsidiary provides security and maintenance services to the lesses 1,500,000
Property under construction for use as investment property 6,000,000
Total Invesment Property 15,500,000

2. Excluded from investment property

Property held by a subsidiary a real estate firm in the ordinary course of business
Property, Plant and Equipment
Property held by the parent for use in production 
Land leased by the parent to a subsidiary under an operating lease
Land held for future factory site
Machinery is not included in investment property because only land and building can qaulify as investment property
Machinery leased out by the parent to an unrelated party under an operating lease

Cost model
1. to record the acquisition of the investment property Jan 1 2019
Investment property 50,000,000
Investment Property 50,000,000 Cash
50,000,000
Dec 31 2019
Investment property
2. To record the subsequent annual depreciation Gain from change in fair value

Depreciation expense Fair value- Dec 31 2019

Accumulated depreciation
Acquisition cost
Residual Value
Depreciation amount
Annual depreciation
(45,000,000 * 25 years)
Acquisition Cost
Increase in fair value 2019
50,000,000
-5,000,000 Dec 31 2020
45,000,000 Loss from change in fair value
1,800,000 Investment Property
Fair Value- Dec 31 2020
Carrying amount- Dec 31 2019
loss from change in fair value

Dec 31 2021
Investment Property
Gain from changes in fair value
Fair Value- Dec 31 2021
Carrying Amount- Dec 31 2020
Increase in fair value 2021
nt property

50,000,000

55,000,000
50,000,000
5,000,000

2,000,000
2,000,000

53,000,000
55,000,000
-2,000,000

7,000,000
7,000,000
60,000,000
53,000,000
7,000,000