Southwell Ltd, a property development company, sold a property with a carrying amount of 4.5 million for
Question:
Southwell Ltd, a property development company, sold a property with a carrying amount of £4.5 million for £5 million to Financier Ltd on 1 January 20X4 (the current market value is £5 million). Southwell Ltd retains the right to occupy the property and obligation to maintain the building and has a forward option to repurchase the property in two years’ time for £6 million. It is expected that the market value of the property will be £6 million in two years’ time. The annual rate for 20% over two years is 9.5%.
In accordance with IFRS 15, Revenue from Contracts with Customers what should be recognised in the financial statements relating to this transaction for the year ended 31 December 20X4?
International Financial Reporting And Analysis
ISBN: 9781473766853
8th Edition
Authors: David Alexander, Ann Jorissen, Martin Hoogendoorn