Assume there are three separate real estate companies: US Realty (which applies the cost model), UK Realty (which applies the revaluation model), and International Realty (which applies the fair value model). Assume also that on December 2003, each company pays $1,000 cash to obtain investment property comprising land with negligible value and an office building worth $1,000. The building has a 10-year useful life, has no residual value, and is expected to provide a constant stream of economic benefits over time.

following four scenarios:

On 12/31/2003, acquisition

On 12/31/2004, the investment property fair value is $1,300

On 12/31/2005, the investment property fair value is $1,100

On 12/31/2006, the investment property fair value is $500

(assuming the decline in fair value warrants an impairment charge under the cost model).

Prepare a yearly summaries of balance sheet values of investment property and the effect on net income for each of the companies.