On 1 January 20X1, a farming company, Farming Private Limited (FPL) incorporated in Singapore and adopts the SFRSs purchased two plots of freehold land, Plot A and Plot B, for $800,000 each. Plot A was purchased for the firm's farming activities but the firm had not decided what to do for Plot B. On 31 December 20X1, the fair value less cost of disposal (FVLCD) and value in use (VIU) of Plot A was $750,000 and $780,000 respectively. The FVLCD and VIU of Plot B was $750,000 and $740,000 respectively. On 31 December 20X2, the FVLCD and VIU of Plot A was $850,000 and $810,000 respectively. The FVLCD and VIU of Plot B was $850,000 and $840,000 respectively. On 12 January 20X3, Plot B was sold for $900,000. FPL accounted for Plot A using the cost model under FRS 16 Property, Plant and Equipment and for Plot B using the fair value model under FRS 40 Investment Property. Assume that the cost of disposal is negligible.

Required: (a) Discuss whether you agree with FPL's treatment for both plots of land. (6 marks)

(b) Notwithstanding your answers to part (a) above, illustrate the accounting for both plots of land using FPL's adopted accounting policies by preparing journal entries, including journal narratives, for the financial year ending 31 December 20X1, 31 December 20X2 and 31 December 20X3. Assess, explain and account for impairment and reversal of impairment, where applicable, of the plots of land. (23 marks)