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GBA Macao Group, which is a group listed in Shenzhen, was incorporated by two sisters. Miss GiGi Young and Chantel Young, in Macao in 1990.

GBA Macao Group, which is a group listed in Shenzhen, was incorporated by two sisters. Miss GiGi Young and Chantel Young, in Macao in 1990. GBA was originally involved in hotel investment and hotel management business in Macao but has later expanded presence in many business in many places. GBA is now sourcing funds in Shenzhen and Hong Kong and has expanded presence in Europe. GBA prepares its financial statements in accordance with the International Financial Reporting Standards.

During the beginning of 2020, GBA acquired Yumi Company at a cash consideration of $7 million in exchange for 25% equity interest in Yumi. Yumi is a residential project in Europe and it may fit GBA's expansion mission. Rock, GBA's financial controller estimated that Yumi should had net assets of $16 million when it was acquired.

At 31 December 2020, the year end of GBA, Rock further realized that: a. A patent of Yumi with a carrying amount of $2 million might have a fair value of $3 million at the beginning of 2020. b. Yumi's patent should have remaining useful life of 5 year, and c. Yumi earned $1.2 million during 2020.

Required:

Explain and determine how GBA's financial statements account for (with journal entries) the investment in Yumi for 2020.

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