SizwaBantu Limited acquired three 2 storey buildings with a view to renting them out. Suitable
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Question:
SizwaBantu Limited acquired three storey buildings with a view to renting them out. Suitable
tenants have been located. The following costs were incurred when acquiring all these buildings:
Purchase price R
Property transfer taxes R
Attorney costs for legal services R
Borrowing costs R
Startup costs R
The accountant at SizwaBantu Limited is unsure of the accounting implications, what to record and
related disclosure for these transactions and requested your help with the following.
What is an investment property?
What value is used to measure investment property and what is the definition of this?
Describe the initial measurement of investment property
Calculate the amount to which these buildings will initially be measured. Support your answer
with appropriate explanations. The company has elected to use the cost model for valuation.
Related Book For
Equity Asset Valuation
ISBN: 978-0470571439
2nd Edition
Authors: Jerald E. Pinto, Elaine Henry, Thomas R. Robinson, John D. Stowe, Abby Cohen
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