1. Explain capital maintenance and the two main types of capital maintenance. (6 marks)

b. Ohemaa Ltd, a manufacturing company, purchased a property for $500,000 on 1st January 2021 for its investment potential. The land element of the cost is believed to be $200,000, and the buildings element is expected to have a useful life of 25 years. At 31st December 2021, local property indices suggest that the fair value of the property has risen to $550,000.

Required

Show how the property would be presented in the Statement of Profit or Loss and Statement of Financial Position for 31st December 2021 if Ohemaa Ltd adopts:

1. The cost model

ii. The fair value method