Page 90 - PowerPoint Presentation
P. 90
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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