Total 11.020.000

EXERCISE 1:
Purchased property
Property price : 10.000.000
Treansfer duty: 1.000.000
Legal fees: 20.000
Total 11.020.000
Sefl-constructed building
Labour cost : 1.700.000 ( = 2.000.000 – 200.000 – 100.000)
Materials: 6.500.000 ( = 8.000.000 – 1.000.000 – 500.000)
Other resources: 2.000.000
Total 10.200.000
EXERCISE 2:
Capitalizatio
Reasons Costs
n
erecting shade- Bringing economic
cloth covered- benefits in the future 1,000,000
parking (operating the rental)
Parking is reserved
Does not bring economic
for lessee 3.000.000
benefits to Wise
customers
Repair damaged Bring economic benefits

400,000
roof due to hail in the future
Property rates Operation Costs 2,000,000
Legal fees Operation Costs 200.000
Total 1,400,000 5,200,000

EXERCISE 3:
Financial statement of Ripott Limited on December 31, 20.3
Indicators on
Amount of
Explanations the financial
money
statements
Measure according to fair REAL

Pink building value model (book value ESTATE R3050000
adjusted to fair value) investment
Included in investment
Interior properties because investment
design properties are built on a fully
equipped basis
Ducted air
property as an integral part of
conditioner
real estate
Modern otis
property as an integral part of
elevator
real estate
Rental revenue of the month LIABILITIES

prepaid rent R50000
1/20.4 received in advance Current
EXERCISE 4:
1. Question: You own a small apartment to rent out, but your tenant goes
bankrupt.
You are looking for another tenant and during your search, you use the
apartment as your office. Investment or owner-occupied?
- Because we use this apartment for an administrative purpose, we would
recognized it as an owner-occupied asset
2. Question: You enter into a 30-year finance lease for a part of a building
that you plan to let to your tenants.
- A part of a building that are leased will be classified as an investment
property
3. Question: You run a hotel. Its main activity is to rent apartments and
rooms on the short-term basis.
- Because this hotel uses rooms and apartments to supply the services on
the short-term basis and it earns revenue mainly from this activiy, we will
recognize these assets as PPEs
4. Question: A big investment company purchased a land deep under its fair
value. As it was such a great bargain, the company is undecided what to do
with the land – either to sell it later or to develop some property on it. The
decision will be taken in the later accounting period.
- A company should classify a land as an investment property as this land
held for undetermined future use
5. Question: You acquired a building under 30-year finance lease. You

refurbished the offices and plan to sublet these offices, but you are awaiting
approvals from the local authorities.
- We would classify the offices as Investment Properties because the offices
are intended to earn revenue from rent.
6. Question: You own an office building with 50 offices. You use 20 offices
for your own consulting business and you sublet 30 offices to tenants.
- In this case, the portions of rental offices and administrative offices are
classified seperately therefor we would recognize 20 offices as PPEs and 30
rental offices as Invesment properties
7. Question: A subsidiary owns a building that fully leases out to its parent
company.
A parent company uses this building for own office space.
- The subsidiary would classify this building as an investment property as
this transaction would earn rental income during the financial period.
EXERCISE 5:
01.20X4
DR TSCĐ 150,000
Cr Bấ t độ ng sả n đầ u tư 150,000
12.20X4
Dr CP Khấ u hao 5000
Cr KH TSCĐ 5000
Exercise 6
01 January 20X1
Dr Building – Investment properties 300,000
Cr Cash 300,000
31 December 20X1
Dr Depreciation Expenses 10,000
Cr Accumulated depreciation 10,000
Fair value model
Dr Investment Property 20,000
Cr Gain from fair value change 20,000
Revaluation model
Dr Investment Property 20,690
Cr Depreciation Expenses 690
Cr Revaluation reserve 20,000
Gross method Before After %

Cost 300,000 320,690
Accumulated Depreciation 10,000 10,690
Carrying amount 290,000 310,000
(31/29)

Total 11.020.000

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EXERCISE 1:

Repair damaged Bring economic benefits

Property rates Operation Costs 2,000,000

Legal fees Operation Costs 200.000

Total 1,400,000 5,200,000

Measure according to fair REAL

Rental revenue of the month LIABILITIES

5. Question: You acquired a building under 30-year finance lease. You

Gross method Before After %

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