Bilmont Properties has three properties, details of which are listed below.

The company uses the cost model for property, plant and equipment and fair value model for investment properties. All assets measured on the cost basis are depreciated on the straight-line basis over the assets estimated useful life. Residual values for all three properties are assumed to be zero.

The financial year-end of the company is 31 December.

Property A

This property was acquired on 1 January 20X9 at a cost of 2 500 000, with the intention of using the property as the companys administrative office. At acquisition, the cost of the land was estimated at 250 000, and the cost of the building was estimated at 2 250 000. The property has an estimated useful life of 40 years.

At 31 December, an identical property situated alongside Property A was sold for 2 800 000.

Property B

This property was acquired on 1 July 20X7 at a cost of 3 400 000, with the intention of letting it out on a long-term basis. The property has an estimated useful life of 35 years.

The fair value of the property at 31 December 20X8 was 5 100 000.

During the year ended 31 December 20X9, 3 100 000 was spent upgrading and refurbishing the property. This has led to increases in the rent for the property and, as a result, its estimated fair value at 31 December 20X9 is 9 400 000. Had the additional expenditure not been incurred it is estimated that the fair value of the property at 31 December 20X9 would have been 5 200 000.

Property C

This property was acquired on 1 May 20X9 at a cost of 4 200 000, with the intention of letting it out on a long-term basis. The property has an estimated useful life of 40 years.

The property is specialized and the directors are of the opinion that it will not be possible to obtain reliable values on a continuing basis.

Required:

Describe, giving reasons, how Bilmont Properties should account for these properties in the financial statements for the year ending on 31 December 20X9.