Which of the

following items is 

Indicate whether the following statement is true or false:

The discount rate to be used in the calculation of an asset’s value in use is a pre-tax discount rate and thus the cash flows to be included in the value in use calculation should not include any related tax cash flows.

An investment property was purchased for C300 000, payable over 5 years. The cost of financing included in this amount payable is C30 000. In addition to this sum, C10 000 legal fees were incurred and property transfer tax of C50 000 was incurred. Start-up costs of C80 000 were incurred in order to supply electricity to the building. A loss of C20 000 was incurred during the first month during which full occupancy was not yet achieved. The property must be initially measured at

Income tax

is a tax that is levied on an entity’s Answer 1.

Select the most correct answer:

 An item of property, plant and equipment meets the criteria on 30 April 20X5 to be classified as ‘held for sale’. The entity has a financial year-end of 31 December. The asset is classified as ‘held for sale’ from:

Entity A owns a factory plant. This plant has an expected selling price of C330 000 at reporting date, where this selling price was determined based on the selling prices of identical assets in an active market. However, if the entity sells the asset for C330 000, it would then receive a tax saving of C110 000, a tax benefit which is specific only to this entity and would not be transferable to the purchaser. Thus the sale of the asset at C330 000 would, in effect, render cash inflows of C440 000 for Entity A. Legal costs of C10 000 would be incurred in order to make this sale. Costs to reorganise the factory after the sale of the asset would be C20 000. The fair value less cost of disposal would be

Select the most correct answer:

 The difference between measuring a property under the fair value model in IAS 40 Investment property and measuring a property under the revaluation model in IAS 16 Property plant and equipment is that:

 A factory plant has an expected selling price of C440 000 if sold at reporting date, where this selling price was determined based on the selling prices of identical assets in an active market. The selling price has been presented inclusive of a transaction tax of 10%. If the asset were indeed sold for C440 000, a recoupment of C200 000 would arise on which the tax authorities would levy income tax of 30%. Legal costs of C10 000 would be incurred to make the sale. The fair value less cost of disposal would be:

Select the most correct answer:

Impairment reversals relating to a non-current asset held for sale: