Romel (Pty) Ltd is a company that started operating on 1st January 2019 and has its year end on 31

December each year. The company`s head office is in Pretoria. It also owns land and buildings in

North West Province which was purchased for R 300 000. The land and buildings are leased to

tenants under an operating lease for R 50 000 per annum.

Required:

1.1 Identify whether leased land and building can be recognized as an investment property under IAS

40.