It order to maximise their share in different sectors of the industry and as such, in

FY$12022$ TakeitAll acquired $80\%$ of Better Build $($Pty$)$ Ltd in the property

development sector.

Better Build $($Pty$)$ Ltd $($BB$),$ is a property investment and development company in

South Africa with the same year end as the parent, TakeitAll.. BB$$s revenue stream

includes the following two main sources:

$$ It constructs commercial capital property which it keeps and leases out under

operating leases to earn rental income and to be entitled to future

appreciation; and

$$ Residential property which it sells under long$-$term contracts to its customers.

BB completed the Jacaranda shopping centre in Hatfield, Pretoria on $30$ November

$2023.$ On $31$ December $2023,100\%$ of the centre was let out; $90\%$ of the tenants

already operating fully on this date. After one month of business, chain store tenants:

Shoprite, Ackermans, and Spur complained that the centre had insufficient parking and threatened if BB does not address this problem, they will consider cancelling

their lease contracts. BB cannot afford to lose its chain store tenants because they

make up more than $50\%$ of the lease income and this is one of the main reasons$$

customers visit the centre.

On $1$ January $2023$ BB started with the construction of additional parking space on a

piece of land it owns adjacent to the mall to address its tenants$$ concerns. This

paved parking space was completed on $28$ February $2023.$ Because this parking

space is not covered, BB decided not to charge parking fees for the use of this

parking space. Due to the centre being ready for its intended use on $31$ August

$20\mathrm{.}18,$ BB expensed the R$3\mathrm{.}3$ million cost incurred to construct the additional parking

space and deducted the full amount from its taxable income when it was actually

incurred, i$.$e$.$ on $28$ February $2023.$

Question $1$ : $,$ prepare

a memo to the Transaction and Investment

committee in which you discuss, in terms of

the Conceptual Framework $(2018)$ and the

Income Tax Act whether you agree with the

recognition of the costs incurred to construct

the additional parking space.Support your discussion

with reasons and recommend the

appropriate recognition if you disagree.