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Use the following information for the next two questions.

The Delap Company accounts for non-current assets using

the cost model. On 25 April 2020 Delap classified a noncurrent

asset as held for sale in accordance with PFRS5. At

that date the asset's carrying amount was P32,000, its fair

value was estimated at P22,000 and the costs to sell at

P3,200. On 15 May 2020 the asset was sold for net

proceeds of P17,400.

In Delap's statement of comprehensive income for the year

ended 30 June 2020:

6. What amount should be included as an impairment loss?

a. P13,600 c. P10,000

b. P13,200 d. Nil

7. What amount should be included as loss on disposal?

a. P14,600 c. P4,600

b. P13,200 d. P1,400

8. Which statement is incorrect regarding impairment of

assets classified as 'held-for-sale' in accordance with

PFRS 5?

a. Impairment must be considered both at the time of

classification as held for sale and subsequently.

b. Immediately prior to classifying an asset as held

for sale, any impairment loss is recognized in profit

or loss unless the asset had been measured at

revalued amount under PAS 16 or PAS 38, in which

case the impairment is treated as a revaluation

decrease.

c. After classification as held for sale, impairment loss

is the difference between the adjusted carrying

amounts of the asset and fair value less costs to

sell.

d. Any impairment loss that arises by using the

measurement principles in PFRS 5 must be

recognized in profit or loss, except for assets

previously carried at revalued amounts.

9. Classification as 'asset held-for-sale' will most likely

result in an immediate charge to profit or loss for

which of the following non-current assets?

a. Biological assets

b. Intangible assets

c. Investment property measured using the cost

model

d. Property, plant and equipment using the

revaluation model

Use the following information for the next two questions.

The Verba Company accounts for non-current assets using

the revaluation model. On 30 June 2020, Verba classified a

freehold property as held for sale in accordance with PFRS5.

At that date the property's carrying amount was P290,000

and the balance on the revaluation reserve was P20,000. At

that date its fair value was estimated at P330,000 and the

costs to sell at P20,000. At 31 December 2020 the

property's fair value was estimated at P325,000 and the

costs to sell at P25,000.

10. The asset should be carried in Verba's statement of

financial position at 31 December 2020 at

a. P325,000 c. P300,000

b. P310,000 d. P290,000

11. What amount should be included as an impairment loss

in Verba's profit or loss for the year ended 31 December

2020?

a. P30,000 c. P5,000

b. P10,000 d. Nil

Use the following information for the next three questions.

An entity accounts for non-current assets using the

revaluation model. On 30 June 2020, the entity classified

two items of non-current assets as held for sale in

accordance with PFRS5. The following information relates to

these assets:

Asset 1 Asset 2

Carrying amount before

classification as held for sale

P400,000

P300,000

Revaluation surplus before

classification as held for sale

60,000

30,000

Fair value, 30 June 2020 450,000 260,000

Estimated costs to sell 20,000 12,000

12. The total expense to be recognized in profit or loss

related to these assets is

a. P42,000 c. P22,000

b. P32,000 d. Nil

13. The net amount to be recognized in other

comprehensive income related to these assets is

a. P50,000 c. P10,000

b. P20,000 d. (P10,000)

14. The balance of revaluation surplus as of 30 June 2020

after classification of the assets as held for sale is

a. P110,000 c. P70,000

b. P 90,000 d. P50,000

Use the following information for the next five questions.

On December 1, 2019, Joy Corporation decided to dispose

of an item of plant that is carried in its records at a cost of

P450,000, with accumulated depreciation of P80,000.

Depreciation on the plant since it was originally acquired

has been charged at P5,000 per month. The company

undertook all the necessary actions to be able to classify

the asset as held for sale. It is estimated that it could sell

the plant for its fair value, P350,000, incurring P10,000

selling costs in the process.

On December 31, 2019, the plant had not been sold but,

due to a shortage of this type of plant, there had been an

increase in the fair value to P360,000 while expected costs

to sell remain at P10,000.

15. Any gain on a subsequent increase in the fair value

less cost to sell of a noncurrent asset classified as held

for sale should be treated as follows:

a. The gain should be recognized in full.

b. The gain should not be recognized.

c. The gain should be recognized but not in excess of

the cumulative impairment loss.

d. The gain should be recognized but only in retained

earnings.