(a) Assessment Under IFRS 5

1. Classification as Held for Sale:
The property was classified as held for sale on October 1, 2013. This classification is appropriate as:

• Management had committed to selling the property.
• An active program to locate a buyer had commenced.
• The sale was expected to be completed within a year.

2. Cease Depreciation:
From October 1, 2013, depreciation ceased as per IFRS 5. Depreciation up to this date would be calculated as follows:

• Depreciation for the year (N4 million × 7.5%): N300,000
• Depreciation for 4 months (June to September): N100,000

3. Measurement at the Lower of Carrying Amount and Fair Value Less Costs to Sell:

• Carrying amount on October 1, 2013:
  • Cost: N4 million
  • Less: Accumulated depreciation (N1 million + N100,000): N1.1 million
  • Less: Impairment loss: N350,000
  • Carrying amount = N2.55 million
• Fair value less costs to sell = N2.4 million
• Write-down of N150,000 (N2.55 million – N2.4 million) is recognized in profit or loss.

4. Subsequent Measurement:
At December 1, 2013, fair value less costs to sell increased to N2.52 million. A gain of N120,000 (N2.52 million – N2.4 million) is recognized in profit or loss.

5. Disposal:
On June 5, 2014, the property was sold for N3 million, resulting in a final gain of N480,000 (N3 million – N2.52 million).

(b) Evaluation Under IAS 10

1. Classification of Events:
IAS 10 defines events after the reporting period as:

• Adjusting Events: Provide evidence of conditions existing at the reporting date.
• Non-Adjusting Events: Indicate conditions arising after the reporting date.

2. Fair Value Reassessment:

• The reassessment on December 1, 2013, to N2.52 million is an adjusting event, as it provides further evidence about conditions existing as of October 1, 2013.
• The increase to N2.95 million at May 31, 2014, is a non-adjusting event, reflecting a change in market conditions after the reporting date.

3. Recognition in Financial Statements:

• At the reporting date (May 31, 2014), the property is carried at the last assessed fair value less costs to sell of N2.52 million.
• The gain from the further increase to N2.95 million is not recognized in the financial statements but may be disclosed if material.

4. Final Sale:
The sale of the property on June 5, 2014, for N3 million is a non-adjusting event as it occurred after the reporting period. However, the transaction should be disclosed in the notes to the financial statements, emphasizing the realized gain of N480,000.

5. Impact on Reported Gains:
The gains recognized during the reporting period include:

• Write-down on October 1, 2013: (N150,000)
• Gain on reassessment on December 1, 2013: N120,000
• Final gain on disposal post-May 31, 2014: N480,000

Conclusion:

The treatment of the property aligns with IFRS 5 for classification and measurement as a non-current asset held for sale. Events after the reporting period are appropriately evaluated under IAS 10, ensuring accurate financial reporting and disclosure.