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Question 2 Mark Limited is an investment company that purchases buildings and holds them for a, number of purposes, such as resale, leasing and its own use. On 1 January 2019, Mark Limited purchased an old building, Mark Towers, for N$300 000. Conveyancer's fees amounted to N$20 000 This building is situated in an isolated part of Durban (South Africa) and there is no development anywhere nearby. At the time of purchase, there had been no property transactions in this area for many years and the possibility of leasing the building to tenants was remote. During November 2019, development began of a new industrial park in the area. As a result, the building was able to be leased to tenants involved in the development of the industrial park. Due to the influx of people of people into the area, the directors decided to paint one side of the buildings with the corporate logo of Mark Limited. This building has never had an air-conditioning system. After numerous complaints from tenants about not being able to tolerate the Durban heat, Mark Limited decided to upgrade the building by installing a ducted air-conditioning system on 1 December 2019. The cost of installation included the following: Adjustments to the structure of the building 30 000 Painting 50 000 Air-conditioning system 200 000 Installation costs 50 000 The ducted air-conditioning system has a 10 year life and a nil residual value As a result of the new industrial park, there was suddenly a demand for properties in the area. As a result, the fair value of Mark Towers was able to be determined on 31 December 2019 at N$420 000. Mark Limited would like to measure this investment property at fair value now that fair values have become available. The building has a 10 year useful life and an estimated residual value of N$50 000 Mark Limited also holds other investment property, which is measured under the fair value model. The fair value of this other investment property is as follows: 1 January 2019 N$ 1 000 000 31 December 2019 N$ 1 250 000 2