Problem 22-1 (IFRS)
Classic Company and its subsidiaries own the following properties that are accounted for in
accordance with international accounting standards:
Land held by the parent for undetermined use 5,000,000
A vacant building owned by the parent and to be 3,000,000
Leased out under an operating lease
Property held by a subsidiary, a real
estate firm, in the ordinary course of business 2,000,000
Property held by the parent for use in production 4,000,000
Building owned by a subsidiary and
for which the subsidiary provides security
and maintenance services to the lessees 1,500,000
Land leased by the parent to a subsidiary under an
operating lease 2,500,000
Property under construction for use as investment
property 6,000,000
Land held for future factory site 3,500,000
Machinery leased out by the parent to an unrelated
party under an operating lease 1,000,000
Required:
1. Compute the total investment property that should be reported in the consolidated
statement of financial position of Classic Company and its subsidiaries.
2. Indicate the classification of the assets that are excluded from investment property.
Classic Company and its subsidiaries own the following properties that are accounted for in
accordance with international accounting standards:
Land held by the parent for undetermined use 5,000,000
A vacant building owned by the parent and to be 3,000,000
Leased out under an operating lease
Property held by a subsidiary, a real
estate firm, in the ordinary course of business 2,000,000
Property held by the parent for use in production 4,000,000
Building owned by a subsidiary and
for which the subsidiary provides security
and maintenance services to the lessees 1,500,000
Land leased by the parent to a subsidiary under an
operating lease 2,500,000
Property under construction for use as investment
property 6,000,000
Land held for future factory site 3,500,000
Machinery leased out by the parent to an unrelated
party under an operating lease 1,000,000
Required:
1. Compute the total investment property that should be reported in the consolidated
statement of financial position of Classic Company and its subsidiaries.
2. Indicate the classification of the assets that are excluded from investment property.
