[snehasudhir]

Speculate owns two properties and uses fair value accounting where possible.
Property A: An office building used by Speculate for administrative purposes. At 1 April 20X2 it
had a carrying amount of $2 million and a remaining life of 20 years. On 1 October 20X2, the
property was let to a third party and reclassified as an investment property. The property had a
fair value of $2.3 million at 1 October 20X2, and $2.34 million at 31 March 20X3.
Property B: Another office building let on a 12?month lease to a subsidiary of Speculate. At 1 April
20X2, it had a fair value of $1.5 million which had risen to $1.65 million at 31 March 20X3.

What is the correct treatment when Property A is reclassified as an investment property?
A Take $350,000 gain to other comprehensive income
B Take $350,000 gain to the statement of profit or loss
C Take $400,000 gain to other comprehensive income
D Take $400,000 gain to the statement of profit or loss.
can you explain me this problem?

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