Regal Limited is an investment company that invests in various assets, which it then holds for capital appreciation. None of the company's assets are held for speculative purposes and, where applicable, Regal Limited has never elected to hold financial assets at fair value through other comprehensive income.
On 5 February 2022, Regal Limited acquired 100 000 ordinary shares on the JSE Limited for R500 000

.The transaction cost amounted to R5 200. The purchase price and the transaction cost were paid in cash.

On 28 February 2022, the shares had a fair value of R5,10 per share.

Ignore any tax implications.

REQUIRED:
4.1) Discuss how the shares should be
• classified
• measured initially and
• measured subsequently
in Regal Limited’s records in terms of IFRS 9.
4.2) Prepare the journal entries required in the records of Regal Limited for the financial year ended 28 February 2022 to account for the shares.
4.3) Discuss how your answers in 4.1 and 4.2 would differ if Regal Limited elected to hold the shares at fair value through other comprehensive income