Exhibit 1
1. On 1 October 20X0 The property would be regard as an investment
property since it is being held for its investment potential, rather than
being owner occupied or developed for sale.
2. The property would be measured under the fair value model, that
means it will be measured at fair value each year end, with any gains
or losses on remeasurement recognized in profit or loss statement.
3. On 31 March 20X5 , the property ceases to be an investment property
because Dougal begin to develops it for sale as flat.
4. On 31 March 20X5 the increase in the fair value of 3 millions (29-26)
would be recognized in statement of profit or loss for the year ended
30 September 20x5.
5. Since the lease from 1 October 20X4 till 31 March 20X5 consider as
operating lease leaser income 1 million (2X6/12 ) will be recognized in
the statement profit or loss for the year ended 30 September 20X5.
6. The fair value 29 million will be considered as initial cost of inventory.
7. Additional cost 6 millions will be added to the inventory , the total
value of inventory 35 millions.
8. The 10 flats expected to sale for $50 millions ( 10X5) and further cost
to sale 4 million , net releasable value will be 46 millions.
9. The flats will be inventory as current assets with $35 millions.
Exhibit 2
1. Dougal uses the fair value model to assess the property, plant and
equipment, Dougal should measure the assets every year, any
increase in the fair value more than carrying value should be charged
to statement profit or loss.
2. On 31 March 20X5, Dougal will recognize 3 millions in the surplus
measurement account as gain in the statement profit or loss.
3. Dougal will recognize rent revenue from 1 Oct 20X4 till 31 March 20X5
$ one million ( $2000,000 X 6/12).
4. $29 million will be initial cost to remove the property to inventory.
5. Dougal spent 6 million on conversion projects should be added to the
inventory cost , total carrying value of the inventory will be $35 million.
6. The recoverable amount will be estimated price 5 million times 10 flats
will be 50 million , however there is further cost will be paid to
complete the project , so net releasable value will be $46 million.
7. The flats will be current assets by 35 millions.
Exhibit 2
1. The machine and associated liabilities should be recorded on the date
of bought at force rate of exchange, so $240,000 ( 600,000 /2.5).
2. Total modified cost $30,000 should be added to the assets cost , the
total initial cost will be $270,000
3. The assets is not monetary item , so will no be retranslated according
to changes in the exchange rate.
4. The assets start on service on 1 September 20X5, so the deprecation
will be charged to statement profit or loss by
$4500(270,000X1/12X1/5).
5. The carrying assets will be 265,500 will be shown as non current assets
In the statement of position at 30 September 20X5.
6. The liabilities $240,000 is a monetary item and should be retranslated
at end of September 20X5 , using exchange rate at 30 September 20X
5 2 goats per $1 , so the liabilities will $300,000 ( 600,000 /2), will be
shown as current liabilities in financial statement of position.
7. $60,000 will be charges to statement profit or loss, in the case is losses
Exhibit 3
Work
Carrying Dep Dep up to Fair Depreciatio Carrying
amount 30Sep 30 June value n Exp up to amount 30
30 Sep 20X4 20X5 30 Sep Sep 20X5
20X4 20X5
A 25,000 15,000 30 years 28,000 375,000 24,625
B 22,000 16,000 40 years 18,000 400,000 21,600
1. IFRS 5 held for sale non-current assets states that ready assets to
disposal should be re-classed from property, plant and equipment fixed
assets to inventory as current assets or other reclassification in the
financial statement of position at 30 September 20X5 which the Case
for property A.
2. The deprecation should be recorded in the statement of profit or loss
till reclassification date for property A depreciable amount $ 375,000
(15,000 / 30 X9/12 )
3. Property A should be shown in the financial statements of position at
lower of carrying value 24,625,000 and its fair value less cost of sale
$3,375,000 (28,000,000 -24,625,000 )
4. The decline after reporting date should be disclosed in the financial
statements nots , however the decline amount will not be recorded.
5. Property B can not be sell until required repair is completed up to 10
October 20X5, which after the reporting date.
6. Property B will be depreciated over the whole period $400,000
(16,000 /40) and will be recorded as deprecation expenses in the
statement profit or loss.
7. Property B has impairment indictor as the fair value only $18,000 and
net carrying value 21,600,0000
