Investor Presentaiton

LKAS 40 - Investment property Questions Hand-out 1 Question 1 Jasmin (Pvt) Ltd acquired an interest in land and building for Rs 52 million payable on acquisition. Further Rs 60 million to be paid after 5 years. The present value of this is to be considered as Rs 48 million. Jasmin (Pvt) Ltd redeveloped the site into apartments for rental under operating leases and wishes to classify in its balance sheet as investment property. The following costs have been incurred: . • Directly attributed cost of refurbishment and redevelopment - Rs 50 million Labour cost paid during the site strike - Rs 3 million Rs 5 million interest on money borrowed to finance the redevelopment accruing over the construction period Costs of Rs 2 million incurred in the 3 months prior to the development becoming fully tenanted. What is the total cost to be recognized initially as investment property in the balance sheet of Jasmin (Pvt) Ltd? Question 2 Mount View (Pvt) Ltd acquired land and building at a cost of Rs 160 million (including Rs 10 million legal and other acquisition costs). It redeveloped the site into apartments for rental under operating leases and wishes to classify the development in its balance sheet as investment property. The following costs have been incurred: Demolition and site preparation - Rs 15 million Construction costs from a labour strike). Rs 180 million (including Rs 12 million for labour costs arising Additionally, Rs 5 million was received as income for a short period prior to construction when the site was used as a car park. What is the amount should be recognized initially as investment property in the balance sheet of Mount View (Pvt) Ltd?

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