REQUIRED: With reference to the information under Transaction 2: Non-current asset held for sale, discuss whether or not the Detector machine will be recognised in the 31 December 2023 annual financial statements of Nibble Bites (Pty) Ltd so as to comply with the International Financial Reporting Standards. (15 marks)

Transaction 2: Non-current asset held for sale Nibble Bites (Pty) Ltd's board of directors has taken the decision to sell the Detector machine used in the quality division. A board resolution was passed on 31July2023 for the sale of the machine. The Detector machine was originally purchased on 1 March 2020 with a cost of R2 000000 . On the purchase date, the machine's expected useful life was 5 years with a residual value of R50 000 . The company has entered into a discussion with a potential buyer. The purchaser will perform a customary due diligence process prior to the acquisition being concluded. Even though the machine is not sold immediately as a result of the due diligence procedures, it is still available for immediate sale. Due diligence is customary because of the technical nature thereof. The due diligence process and sale of the machine will be completed on 1 March 2024. On 31 July 2023, the sales price of the machine was R650 000, with the fair value amounting to R620 000. The costs in relation to the sale of the machine will amount to R10 000 . The fair value of the machine amounts to R610 000 on 31 December 2023, with costs relating to the disposal amounting to R12000. Additional information: - An income tax rate of 28% is applicable. Assume a capital gains tax rate of 80%. - Wear and tear for tax purposes are computed at the same rate as depreciation for accounting purposes, not apportioned for a part year. - Factory buildings classified as property, plant, and equipment are measured using the cost model. - Land classified as property, plant, and equipment is measured using the revaluation model. - Investment properties are measured using the fair value model. - All properties measured under the cost model are depreciated on a straight-line basis over the asset's useful life