Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

b) Fashion plc has a main office building purchased for 1,200,000 two years ago, and currently used for the business operations. On 31 March 2020,

b) Fashion plc has a main office building purchased for 1,200,000 two years ago, and currently used for the business operations. On 31 March 2020, the main office building was revaluated to 997,500. On 1 April 2020, Fashion purchased a small building in Oxford Street for 800,000, which was ideal for showroom. However, the management changed the initial plan and let out the small building in Oxford Street to a non-related third party at a commercial rent. On 31 March 2021, the current fair values of the main office building and the small building rented out were determined as 1,180,000 and 900,000, respectively. The properties are depreciable at the rate of 5% on cost. Fashion plc follows the fair value model to account for properties. Required: With justification, show how the changes in the market values of the properties should be recorded in the financial statements of Fashion plc on 31 March 2021 under International Financial Reporting Standards.image text in transcribed

b) Fashion plc has a main office building purchased for 1,200,000 two years ago, and currently used for the business operations. On 31 March 2020, the main office building was revaluated to 997,500. On 1 April 2020, Fashion purchased a small building in Oxford Street for 800,000, which was ideal for showroom. However, the management changed the initial plan and let out the small building in Oxford Street to a non-related third party at a commercial rent. On 31 March 2021, the current fair values of the main office building and the small building rented out were determined as 1,180,000 and 900,000, respectively. The properties are depreciable at the rate of 5% on cost. Fashion plc follows the fair value model to account for properties. Required: With justification, show how the changes in the market values of the properties should be recorded in the financial statements of Fashion plc on 31 March 2021 under International Financial Reporting Standards. b) Fashion plc has a main office building purchased for 1,200,000 two years ago, and currently used for the business operations. On 31 March 2020, the main office building was revaluated to 997,500. On 1 April 2020, Fashion purchased a small building in Oxford Street for 800,000, which was ideal for showroom. However, the management changed the initial plan and let out the small building in Oxford Street to a non-related third party at a commercial rent. On 31 March 2021, the current fair values of the main office building and the small building rented out were determined as 1,180,000 and 900,000, respectively. The properties are depreciable at the rate of 5% on cost. Fashion plc follows the fair value model to account for properties. Required: With justification, show how the changes in the market values of the properties should be recorded in the financial statements of Fashion plc on 31 March 2021 under International Financial Reporting Standards

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Accounting Vol 1

Authors: Dr S. Kr. Paul, Prof. Chandrani Paul

1st Edition

164725146X, 9781647251468

More Books

Students also viewed these Accounting questions

Question

1. The next area, Now we will turn to, or The second step is.

Answered: 1 week ago

Question

Question 4 Rotation about the Y axis is call the B axis. True False

Answered: 1 week ago