Question 1 ABC Ltd owns several properties which are revalued each year. Three of its properties are rented out under annual contracts. Details of these properties and their valuations are: Property Life Cost Value Value 31 December 2004 31 December 2005 $000 $000 $000 50 years 300 480 400 50 years 240 360 290 15 years 240 300 280 Other information as follows: 1. All three properties were acquired on 1 January 2004. The valuations of the properties are based on their age at the date of valuation. ABC's policy is to carry all non-investment properties at cost. Annual depreciation, where appropriate, is based on the carrying value of assets at the beginning of the relevant period. 2. Property A is let to a subsidiary of ABC Ltd on normal commercial terms. The other properties are let on normal commercial terms to companies not related to ABC Ltd. 3. ABC Ltd adopts the fair value model of accounting for investment properties in HKAS 40 Investment Property, and the cost model for owner-occupied properties in HKAS 16 Property, Plant and Equipment. Required Prepare extracts of the Group financial statements of ABC Ltd for the year to 31 December 2005 in respect of the above properties assuming the company adopts the fair value method in HKAS 40