An entity purchases a rental property for $10,000,000 as an investment. Thebuilding is fully rented, and is in a prosperous area. At the end of the current year,the enterprise hires an appraiser who reports that the fair value of the building is$15,000,000 plus or minus 10percent. Depreciating the building over 50 yearswould reduce the carrying amount to $9,800,000.

(a)What are the relevance and reliability accounting considerations in decidinghow to measure the building in the entitys financial statements?

(b)Does the HKICPAsConceptual Framework for Financial Reportingleadclearly to measuring it at $15,000,000? Or at $9,800,000? Or at some otheramount?