MATTER 2 On 10 January 2016 Shapumba Ltd purchased vacant land at a price of N$ 800 000. The land is situated about 10 k

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Matter 2 On 10 January 2016 Shapumba Ltd Purchased Vacant Land At A Price Of N 800 000 The Land Is Situated About 10 K 1 (133.04 KiB) Viewed 28 times

MATTER 2 On 10 January 2016 Shapumba Ltd purchased vacant land at a price of N$ 800 000. The land is situated about 10 kilometers from Shapumba Ltd.'s closest operations and was purchased with the sole aim of selling it at a profit after 5 years. Because of its ideal location and the developments that commenced in the area after Shapumba Ltd purchased the land, a sworn valued estimates the fair value on 30 June 2017 at N$ 1 660 000. The Chief Financial Officer (CFO) is however of the opinion that the value of the land on the Statement of Financial Position on 30 June 2017 should be kept at the original cost price of N$ 800 000. He also stated that the new value would just attract unnecessary taxes. Required: With reference to relevant International Financial Reporting Standards, define investment property and also discuss whether you think the land should subsequently be measured at cost price or fair value. (10 marks) [Total 30 MARKS]