Hemmar Inc., a publicly listed company in Canada, ventured into construction of a mega-shopping mall in Edmonton, which is rated as the largest shopping mall in North America. The company's board of directors, after much market research, decided that instead of selling the shopping mall to a local investor who had approached them several times with excellent offers that he steadily increased during the year of construction, the company would hold this property for the purposes of capital appreciation and earning rental income from mall tenants. Hemmar Inc. retained the services of a real estate company to find and attract many important retailers to rent space in the shopping mall, and within months of completion at the end of 2017, the shopping mall was fully occupied.

The following costs were incurred in the construction of the new building:

Costs	$
Direct Labor	300,000
Interest on Loan to Finance Construction	69,300
Allocation of Plant Overhead	199,700
Materials	366,100
Architectural Drawings.	10,900
Allocation of Presidents Salary	54,000

The company used an independent appraiser to determine the mall's fair value annually. According to the appraisal, the fair values of the shopping mall at December 31, 2017, and at each subsequent year end were:

Year	$
2017	1 million
2018	1.1 million
2019	1.3 million
2020	1.15 million

The independent appraiser felt that the useful life of the shopping mall was 20 years and its residual value was $ 100,000.

Required:

1. Calculate the Total Cost of the Building. (4 points)
2. Describe the impact on the company's income statement and prepare the necessary journal entries for 2017, 2018, 2019, and 2020 if it decides to treat the shopping mall as an investment property under IAS 40:

i. Using the fair value model. (5 points)

ii. Using the cost model. (5 points)

Note that the mall's rental income and expenses would be the same under both options, and thus can be omitted from the analysis for this exercise.