Zenith Corporation is large construction company whose financial statements are prepared using International Financial Reporting Standards. Zenith wishes to create an investment property portfolio as the company owns several properties and wishes to determine if they are properly classified. The following portfolio of property is owned by Zenith. Zenith owns several plots of land. Some of the land is owned

Zenith Corporation is large construction company whose financial statements are prepared using International Financial Reporting Standards.

Zenith wishes to create an investment property portfolio as the company owns several properties and wishes to determine if they are properly classified. The following portfolio of property is owned by Zenith.

Zenith owns several plots of land. Some of the land is owned by Zenith for capital appreciation and this may be sold at any time in the future. Other plots of land have no current purpose as Zenith has not determined whether it will use the land to provide services such as those provided by national parks or for short-term sale in the ordinary course of operations.

The company supplements its income by buying and selling property. The company has a housing department which regularly sells part of its housing inventory in the ordinary course of its operations. Part of the inventory, which is not held for sale, is to provide housing to low-income employees at below market rental. The rent paid by employees covers the cost of maintenance of the property.

Required:

With reference to the appropriate standards, discuss how the above event should be accounted for in the financial statements of Zenith.