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CASE A (For the next 5 questions)

You were tasked to audit the Noncurrent Assets Held for Sale Account of Hero Company for the year ended 2022. After detailed investigation, you have obtained the following information on these accounts:

1. On October 1, 2022, Building A, a warehouse facility, has a cost of Php4,000,000 and accumulated depreciation of Php3,100,000. The company commits a plan to sell it by February 1, 2023. On October 1, 2022, Building A has an estimated selling price of Php800,000 and it is estimated that selling costs associated with the disposal will be Php120,000. On December 31, 2022, the estimated selling price of Building A has increased to Php1,200,000 with estimated selling costs remaining at Php120,000.
2. On January 2, 2022, Hero Company intends to sell Building B, with a carrying value of Php5,000,000 but based on a test of impairment the said building has a fair value of Php4,500,000, but will continue to use the asset until the construction a new building is completed. Building B has a remaining useful life of 10 years. Building B houses the administrative offices of Hero Company and the new building shall be built for the same purpose.
3. On December 31, 2020, Building C, one of Hero Companys manufacturing facility, has a carrying value of Php8,000,000 and had a remaining useful life of 25 years. It is the companys policy to depreciate all its buildings using the straight-line method.

On January 2, 2021, Hero Company committed to a plan to sell Building C and classified this asset as held for sale. Building C was priced at Php8,500,000 which is equal to its fair market value.

During 2021, the market conditions for manufacturing facilities that existed at the date the building was classified initially as held for sale deteriorated and as a result, Building C was not sold at the end of 2021. During 2021, the company actively solicited by did not receive any reasonable offer to purchase Building C and, in response, reduced the price to Php8,400,000. Building C continued to be actively marketed at a price that was reasonable given the change in market conditions.

In 2022, the market conditions deteriorated further, and Building C is yet to be sold by the end of 2022. Hero Company believes that the market conditions will improve and has not further reduced the price of the building. Building C continues to be held for sale at a price in excess of its current fair value.

Required:

At the time of reclassification of Building A as held for sale, what amount should the noncurrent asset held for sale be recognized and What amount of loss should Hero Company recognize at the time Building A was reclassified as held for sale?

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