Marconi and Son Ltd are auditors of Skyworld Property Ltd. A journal article in Property Survey journal indicates a 25% fall in value of properties in Ho due to the relocation of office to Accra. The company’s office blocks were valued at GH₵5 million, up from GH₵ 4.5 million by a valuer but the property was valued in the name of the Managing Director, Mr Skyworld. The Managing Director refused a suggestion of second valuation on the ground that such cost was unnecessary. Treating the office blocks as an investment property raised profit by GH₵1,490,000. 

Required:

a. Explain the circumstances that could justify a change in the accounting policies of a company 

b. Comment on the accounting treatment of office property either as an investment or lease.

Answer rating: 100% (QA)

1 Generally it is provided that accounting policy ca... View the full answer