Question

Emaculate owns the following properties at 1 April 2012:

Property A: An office building used by Emaculate for administrative purposes with a depreciated historical cost of $2 million. At 1 April 2012 it had a remaining life of 20 years. After a reorganisation on 1 October 2012, the property was let to a third party and reclassified as an investment property applying Emaculate’s policy of the fair value model. An independent valuer assessed the property to have a fair value of $2·3 million at 1 October 2012, which had risen to $2·34 million at 31 March 2013.

Property B: Another office building sub-let to a subsidiary of Emaculate. At 1 April 2012, it had a fair value of $1·5 million which had risen to $1·65 million at 31 March 2013.

Required: Prepare extracts from Emaculate’s entity statement of profit or loss and other comprehensive income and statement of financial position for the year ended 31 March 2013 in respect of the above properties.

Answer 1

Extract of Profit or loss Account and Other comprehensive income

DATE	EXPENSES	Amount ($ in Millions)	DATE	INCOMES	Amount ($ in Millions)
			31.03.2013	By Increase in Fair Value of Property A	0.04
			31.03.2013	By Increase in Fair Value of Property B	0.15
31.03.2013	To Profit A/c	0.19
TOTAL	0.19	TOTAL	0.19

EXTRACT of Financial Position as on 31.03.2013.

LIABILITIES	Amount ($ in Millions)	ASSETS	Amount ($ in Millions)
Capital and Reserves:		Investment Property :
Revaluation reserve	0.3	Property A	2.34
(Due to change from Fixed asset to Investment Property)
		Property B	1.65