Blossom Corporation owns and manages a small $10-$store shopping centre, which it classifies as an investment property. Blossom has a

May $31$ year end and initially recognized the property at its acquisition cost of $$10\mathrm{.}7$ million on June $2,2022.$ The acquisition cost

consisted of the purchase price of $$10$ million, costs to survey and transfer the property of $$473,000,$ and legal fees to acquire the

property of $$227,000.$ Blossom determines that approximately $25\%$ of the shopping centre's value is attributable to the land, with the

remainder attributable to the building. The following fair values are determined: $($USE the previous photo$)$

Blossom expects the shopping centre building to have a $35-$year useful life and a residual value of $$1\mathrm{.}095$ million. Blossom uses the

straight$-$line method for depreciation.

How will the investment property be reported on each year$-$end statement of financial position? $-$Please provide calculations to the photo question using the data data used above How will the investment property be reported on each year$-$end statement of financial position?

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Solution

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Note that the fair value of the investment property must be disclosed in the financial statements, even if the cost model is

used.

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