Investment properties

Evolve operates in a jurisdiction with a specific tax regime for listed real estate companies. Upon adoption of this tax regime, the entity has to pay a single tax payment based on the unrealised gains of its investment properties. Evolve purchased Monk whose only asset was an investment property for $10 million. The purchase price of Monk was below the market value of the investment property, which was $14 million, and Evolve chose to account for the investment property under the cost model. However, Evolve considered that the transaction constituted a ‘bargain purchase’ under IFRS 3 Business Combinations. As a result, Evolve accounted for the potential gain of $4 million in profit or loss and increased the ‘cost’ of the investment property to $14 million. At
the same time, Evolve opted for the specific tax regime for the newly acquired investment property and agreed to pay the corresponding tax of $1 million. Evolve considered that the tax payment qualifies as an expenditure necessary to bring the property to the condition necessary for its operations, and therefore was directly attributable to the acquisition of the property. Hence, the tax payment was capitalised and the value of the investment property was stated at $15 million.

The answer provided in the BPP P&R kit mentions that for the IP to be held at cost, the potential gain of $4m should not be taken to profit or loss nor added to the cost of the asset.

1.My question is that if we were to acquire an IP and measure it at cost should we recognize it at the purchase price?
2. Where should the gain of $4m be recorded then?