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Investment properties at fair value (note (ii) ) – $ 20 million
May I know why there is still $ 20 million at trial balance of Kandy Co as at 30 September 20X5 since the first investment property was sold on 1 December 20X4.
My understanding is
1. First Investment property carrying amount is $ 15m on 1 Oct 20X4
2. Second Investment property carrying amount is $ 5m on 1 Oct 20X4Please explain
Hi,
I think that the question should be a bit clearer in that it should say that no adjustment has been made for the sale and transfer of IP to PPE. In FA/F3 we assume it has been done correctly unless told otherwise, so we could say that the $15m has not been adjusted adjusted for as is states that the disposal proceeds have been taken to a suspense account and therefore nothing further has been adjusted for, i.e. the IP not derecognised. As for the transfer from IP to PPE then I think this needs to be a bit clearer that the adjustment has not been made in the accounts.
I don’t even think that the first paragraph at the start hints that no adjustments have been made.
Thanks
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