Jim owns the following properties at 1 April 2019: Property A: An office building used by Jim for administrative purposes with a depreciated historical cost of $2.2 million. At 1 April 2019 it had a remaining life of 20 years. After a reorganisation on 1 October 2019, the property was let to a third party and reclassified as an investment property applying Jim's policy of the fair value model. An independent valuer assessed the property to have a fair value of $2-3 million at 1 October 2019, which had risen to $2-34 million at 31 March 2020. Property B: Another office building sub-let to a subsidiary of Jim. At 1 April 2019, it had a fair value of $1.6 million which had risen to $1.8 million at 31 March 2020. REQUIRED Prepare extracts from Jim's entity statement of profit or loss and other comprehensive income and statement of financial position for the year ended 31 March 2020 in respect of the above properties. In the case of property B only, state how it would be classified in Jim's consolidated statement of financial position. [10 marks] Tom entered into a 20-year operating lease for a property on 1 October 2007 which has a remaining life of eight years at 1 October 2019. The rental payments are $1.4 million per annum. Prior to 1 October 2019, Tom obtained permission from the owner of the property to make some internal alterations to the property so that it can be used for a new manufacturing process which Tom is undertaking. The cost of these alterations was $9 million and they were completed on 1 October 2019 (the time taken to complete the alterations can be taken as being negligible). A condition of being granted permission was that Tom would have to restore the property to its original condition before handing back the property at the end of the lease. The estimated restoration cost on 1 October 2019, discounted at 8% per annum to its present value, is $5 million. REQUIRED (1) Explain the criteria Tom must have not satisfied to classify the lease as an operating lease instead of a finance lease [10 marks] (ii) Prepare extracts from the financial statements of Tom for the year ended 30 September 2020