FAC3702 SUGGESTED SOLUTIONS PACK

FAC3702
PAST EXAM - SUGGESTED
SOLUTIONS

, 1

FAC3702 May/Jun 2017
Suggested solution

Question 1

a) Journal entries for 2016 of Sandton property

Investment property - Land (SFP) 50 000 (1 100 000 – 1 050 000)
Fair value gain (PL) 50 000

Investment property - Building (SFP) 60 000 (2 860 000 – 2 800 000)
Fair value gain (PL) 60 000

Non-current asset held-for-sale (SFP) 3 960 000
Investment property - Land (SFP) 1 100 000
Investment property - Building (SFP) 2 860 000


W1. Sandton property



1 Oct 2014 1 Jul 2015 30 Jun 2016


IP: L: 900 000 L: 1 050 000 L: 1 100 000
B: 2 700 000 B: 2 800 000 B: 2 860 000
UL: 25 yrs = 300m 3 850 000 3 960 000
RV: 500 000
FVLCD: 3 960 000
(250 000)
3 710 000
BUT! Investment property at fair value cannot be impaired by IFRS 5!