Question $4$b

On $1$ January $2021,$ Armstrong Ltd purchased a building for its investment potential. The building cost GH $1,000,000$ with transaction cost of $o{\displaystyle \underset{\phantom{}}{\overset{\phantom{}}{}}}10,000.$ The property has a useful life of $50$ years. At the end of the year $31$ December, $2021$ the property's fair value had risen to GH& $1,300,000$ with GH& $300,000$ estimated depreciation over the life of the assets. You are required:

i$.$ In accordance with IAS$40$ Investment property, Explain by showing workings how this property would be treated in the financial statement on the date of acquisition $($initial recognition$)$

ii$.$ Explain by showing workings how this property would appear in the financial statement on $31$ December, $2021$ under the two $(2)$ models discussed by the standard. $10$ marks

Question $4$c

Orphic is a public listed company located at Wassa. The company operates in the mining industry and has a reporting date of ${31}^{st}$ December. Orphic owns a number of prestigious apartments which it leases to miners who are under contract to promote its business. The apartments are let below market rate. The lease terms are short and are normally for six months. The leases terminate when the contracts for promoting the business terminate. Orphic wishes to account for the property as investment property with differences between market rate and actual rent to be charged to the statement of profit or loss.

Required: Discuss how the above would be accounted for in the financial statements of Orphic.

$5$ marks

Question $4$d

In general, IFRS$10$ requires that parent companies should prepare and present consolidated financial statements. But a parent need not present consolidated financial statements under certain conditions, outline those three $(3)$ conditions.

$4$ marks

Total $(25$ marks$)$