Cap Hotels operates a series of northern European hotels and reports under IFRS. On June 30, 20X0, IceCap purchased a hotel for €2,100,000. IceCap reports hotel values on the balance sheet under Property, plant, and equipment. The estimated useful life of the hotel is 30 years from the date of purchase. The company uses straight-line depreciation for its hotels. The appraisal value for the hotel (which you can assume is the same as the recoverable amount) was reported as:
Appraisal Date Hotel Value
12/31/20X0 €2,200,000
12/31/20X1 €1,400,000
2/31/20X2 €1,700,000
Required:
Prepare the journal entries at the end of 20X0, 20X1, and 20X2 to record any changes in value to this hotel asset if IceCap chooses the IFRS cost model to value this property.