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Judicious Company acquired an equity investment a number of years ago for P3,000,000 and
classified it as at fair value through other comprehensive income. On December 31, 2017, the
cumulative loss recognized in other comprehensive income was P400,000 and the carrying
amount of the investment was P2,600,000.
On December 31, 2018, the issuer of the equity instrument was in severe financial difficulty and
the fair value of the equity investment had fallen to P1,200,000.
What cumulative amount of unrealized loss should be reported as component of other compre-
hensive income in the statement of changes in equity for the year ended December 31, 2018?
a. P1,400,000
b. P1,800,000
C. P1,000,000
d. P -0-

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