Fac3764 supplementary exam 2026
, QUESTION 1 (60 Marks)
a) Vavika Ltd: Lecture Venue Journal Entries (31 Dec 2024)
Date Account Details Debit (R) Credit (R)
31/12/2024 Depreciation (P/L) [1] 259,500
Accumulated 259,500
Depreciation (SFP)
Depreciation for 9
months until
classification as held
for sale.
01/10/2024 Non-current asset held 6,500,000
for sale (SFP) [2]
Accumulated 689,500
Depreciation (SFP)
Accumulated 500,000
Impairment (SFP)
Building (Cost) (SFP) 8,650,000
Impairment loss (P/L) 960,500
[3]
To reclassify venue
and record initial
impairment on HFS.
31/12/2024 Impairment loss (P/L) 200,000
[4]
Non-current asset held 200,000
for sale (SFP)
To record further
impairment at year-
end.
Calculations:
1. Depreciation (1 Jan – 30 Sept 2024): Carrying amount on 31 Dec 2023 was
R8,650,000 less accum. dep. for 15 months (R432,500) and impairment
(R500,000) = R7,717,500. Remaining life = 23.75 years. R7,717,.75
\times 9/12 = R243,711. (Alternative: Straight line on original cost/life if impairment
didn't change estimates: R8,650, \times 9/12 = R259,500).
2. Measurement at 1 Oct 2024: Lower of carrying amount (R7,461,000) or Fair
Value less costs to sell (R7,000,000 - R500,000 = R6,500,000).
3. Year-end measurement (31 Dec 2024): Lower of R6,500,000 or Fair Value less
costs to sell (R8,700,000 - R570,000 = R8,130,000). However, IFRS 5 prevents
upward revaluation above original cost. The value remains capped at lower of CA
or FV-CTS.
, QUESTION 1 (60 Marks)
a) Vavika Ltd: Lecture Venue Journal Entries (31 Dec 2024)
Date Account Details Debit (R) Credit (R)
31/12/2024 Depreciation (P/L) [1] 259,500
Accumulated 259,500
Depreciation (SFP)
Depreciation for 9
months until
classification as held
for sale.
01/10/2024 Non-current asset held 6,500,000
for sale (SFP) [2]
Accumulated 689,500
Depreciation (SFP)
Accumulated 500,000
Impairment (SFP)
Building (Cost) (SFP) 8,650,000
Impairment loss (P/L) 960,500
[3]
To reclassify venue
and record initial
impairment on HFS.
31/12/2024 Impairment loss (P/L) 200,000
[4]
Non-current asset held 200,000
for sale (SFP)
To record further
impairment at year-
end.
Calculations:
1. Depreciation (1 Jan – 30 Sept 2024): Carrying amount on 31 Dec 2023 was
R8,650,000 less accum. dep. for 15 months (R432,500) and impairment
(R500,000) = R7,717,500. Remaining life = 23.75 years. R7,717,.75
\times 9/12 = R243,711. (Alternative: Straight line on original cost/life if impairment
didn't change estimates: R8,650, \times 9/12 = R259,500).
2. Measurement at 1 Oct 2024: Lower of carrying amount (R7,461,000) or Fair
Value less costs to sell (R7,000,000 - R500,000 = R6,500,000).
3. Year-end measurement (31 Dec 2024): Lower of R6,500,000 or Fair Value less
costs to sell (R8,700,000 - R570,000 = R8,130,000). However, IFRS 5 prevents
upward revaluation above original cost. The value remains capped at lower of CA
or FV-CTS.