ABC Inc. purchased a shopping complex and with it, a large condominium complex attached to it in the amount of $20,000,000 on January 1, 2013. Both complexes are designated investment property. Both facilities are estimated to have a useful life of eighteen years and a salvage value of $2 million dollars. On December 31^st, 2013, the fair value of both complexes was $25 million. ABC Inc. prepares its financial statements under IFRS. Assuming that ABC uses the Fair Value Model to account for the complex, the carrying value of both complexes on December 31^st, 2013 would be:

Question

Quizplus · Accepted Answer

Under the Fair Value Model, investment property is initially recognized at cost, and subsequently revalued to fair value. Therefore, the carrying value of the shopping complex and condominium complex on December 31^st, 2013 would be their fair value at that date, which is $25 million. Option B is therefore the correct answer.

ABC Inc Purchased a Shopping Complex and with It, a Large