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CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Solution

• COMMENT

• The land will be recognised as investment property in the

separate financial statements of Minnie Ltd, as it was

acquired for investment purposes. The fair value adjustment

and the deferred tax adjustment was thus recognised in profit

or loss.

• Since the land is rented by Mickey Ltd (parent), it now

becomes owner occupied property, plant and equipment in
the group financial statements. The fair value adjustment and

deferred tax adjustment recognised in profit or loss by Minnie
Ltd must thus be reversed.

• It is the group accounting policy to measure land in

accordance with the revaluation model. The increase in fair

value of R150 000 must thus be recognised in other

comprehensive income, net of deferred tax.

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