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Test-03 Ias 40 Solution

The document outlines the classification of various properties under investment property and owner-occupied categories according to IAS standards. It details the financial implications of depreciation, revaluation, and transfer of buildings to investment property, including calculations for accumulated depreciation and fair value gains. Additionally, it specifies the treatment of ancillary facilities in relation to rental activities.

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6 views1 page

Test-03 Ias 40 Solution

The document outlines the classification of various properties under investment property and owner-occupied categories according to IAS standards. It details the financial implications of depreciation, revaluation, and transfer of buildings to investment property, including calculations for accumulated depreciation and fair value gains. Additionally, it specifies the treatment of ancillary facilities in relation to rental activities.

Uploaded by

fatimanabiha694
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Ans1 :

 20 leased floors → qualify as investment property (held to earn rentals).


 3 floors used as headquarters → not investment property; these are owner-occupied and
fall under IAS 16.
 Rooftop leased seasonally → qualifies as investment property if the lease is under an
operating arrangement.
 Parking operated by third-party contractor → qualify as investment property as GDI
earns rental income and does not provide significant services.
 Lounge and wellness center → since operated by GDI exclusively for tenants, and
supports rental activity, it is ancillary to the investment property and assumed to be
insignificant.

Answer 2

----- Rs. million -


30-06-23 Depreciation [120/8 x 6/12] 7.50
Accumulated depreciation 1 mark 7.50
[Depreciation for 6-months of 2023]

01-07-23 Accumulated depreciation [300 - 120 + 7.50] 187.50


Building (PPE) 2 marks 187.5
[Elimination of accumulated depreciation]

01-07-23 Building [PPE] [135 - (120 - 7.5)] 22.50


Revaluation 1 mark 22.50
surplus
[Revaluation on the date of transfer]

01-07-23 Investment property 135.00


Building [PPE] 1 mark 135.0
[Transfer of building to IAS 40]

31-12-23 Investment property [144 - 135] 9.00


FV gain [P&L] 1 mark 9.00
[Fair value gain at end of 2023]

Ans. 3 : (b)

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