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, SOLUTION 1: PROPERTY, PLANT &
EQUIPMENT, INVESTMENT PROPERTY, NON –
CURRENT ASSETS HELD FOR SALE &
IMPAIRMENT OF ASSETS
(a) There will be no deferred tax implication relating to land if the land is valued
according to the cost model since both the tax base and the carrying amount will be
the original cost price which is R1 500 000.
(b) FASHIONISTA LTD
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31
DECEMBER 2016
1. Property, Plant & Equipment
Land Buidings Machinery
R R R
Carrying amount at beginning of year 1500 000 4 400 000
Cost 1 500 000 5 000 000
Accumulated Depreciation - (600 000)i
Revaluation surplus 200 000(ii) 780 000(iii)
Additions during year (2 069 200 + 28 300 + 18 400) 2 115 90
Depreciation for the year (211 385)(iv) (166 367)(
Impairment for the year (2 115 900 − 166 367 − 1 200 000) (749 533
Carrying amount at end of year 1 700 000 4 968 615 1 200 00
Cost / Gross Carrying Amount 1 700 000 5 180 000 2 115 90
Accumulated Depreciation & Accumulated Impairment - (211 385) (915 900
Valuations were performed on 1 January 2016 by an independent sworn appraiser.
The carrying amount of land and buildings if it was carried at cost minus accumulated
depreciation would have amounted to R5 724 615 (land: R1 500 000; buildings: R4 224
615(vi)).
3
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