Surgimed Ghana Ltd. operates in the medical supply industry and specializes in sales and installation of medical equipment and devices such as hospital furniture, medical equipment, electronic equipment, local area networking with station monitoring, and general telecom networking. The company is noted for installation of Sterilization Units, X-Ray machines and Ultrasound scanners, Installation of Medical Gas Pipe Lines, and Operation Theater Requirements around the country. At the end of the 2020 financial year, the directors of the company were not sure whether they have treated the following transactions in their financial statements ending 31st December 2020 correctly.

TRANSACTION

Surgimed Ghana Ltd. acquired the property for GH¢4 million with annual depreciation of GH¢300,000 on the straight-line basis. At the end of the previous financial year on 31st December 2019, when accumulated depreciation was GH¢1 million, a further amount relating to an impairment loss of $350,000 was recognized, which resulted in the property being valued at its estimated value in use. On 1st May 2020, as a consequence of a proposed move to new premises due to the COVID 19 restrictions, the property was classified as held for sale. At the time of classification as held for sale, the fair value less costs to sell was GH¢2·4 million. On 1st July 2020, the property market had improved and the fair value less costs to sell was reassessed at GH¢2·52 million and at the year-end on the 31st December, 2020, it had improved even further, so that the fair value less costs to sell was GH¢2·95 million. The property was sold on 5th January, 2020 for GH¢3 million.

Required

The directors of Surgimed Ghana Ltd. would like you to advise on the accounting treatment for the above transactions in the 2020 financial statements