F7 Chapter 27 Questions
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HI, I’m not sure I understand question 3. If the piece of land is no longer needed for expansion how is it still classified as an investment property?
Because they own the land and it’s not going to be used to further the business
So, if it’s not being used for the business, what is it being used for?
I am antagonistic with the way a leased portion of a building to a subsidiary was ruled out.
Had it been substantial say 10 floors, I believe that it could have been an Investment Property were it impossible to separate them.
If I may be corrected.
The answer is right Though.
Revaluation shouldn’t be $4.2m – $4m ? Because before 1 July 2012 the property was considered as TNCA.
And the following revaluation (to $5m) is not to be considered because it became Investment Property when rented out)
What about the depreciation since the property was acquired? You need to find the carrying value as at the date of the revaluation!
In question 1, why the second revaluation is not included?? Because of revaluation haven’t been made officially, no matter increase in FV?
Investment property increases go through statement of profit or loss and not through revaluation reserve
Question 2 of 4 -how can a parcel of land be subjected to an annual depreciation? I am sure I am missing something, but what?
Thanks Andy
It should be “The property leased to the subsidiary”