QUESTION FOUR $(20$ MARKS$)$

PART $1(10$ Marks$)$

Wasser Ltd$,$ a manufacturing concern utilized surplus funds to purchase an office building in the central business district of Pretoria. The capacity of the building is $10000$ m $2$ and is fully let. The estimated useful life at the date of completion was $30$ years.

Required

Briefly discuss the accounting treatment of the above land and building in the financial statements of Wasser Ltd so as to comply with the requirements of International Financial Reporting Standards $($IFRS$).$ Disclosure requirements are not to be discussed.

PART $2(10$ Marks$)$

A company owns a piece of land with thotel buildings thereon. This property is leased out to a well$-$known hotel group under an operating lease.

Required

Discuss comprehensively whether the directors of the company must account for the land and hotel buildings as investment property so as to comply with the requirements of International Financial Reporting Standards. $($IFRS$),$