(i) Faithful Representation: As the lease agreement does not cover the entire useful life of the asset, Jaye Investment Nigeria Limited should reflect this transaction as an asset with a corresponding liability for future lease payments. This transaction should appear as an asset (right-of-use asset) on the statement of financial position, with depreciation charged to profit or loss and finance costs on the liability to accurately represent the economic reality. The present value of future lease payments at a 10% discount rate should be recognized.

(ii) Relevance: Historical cost presents a conservative view by not including unrealized gains from asset revaluation. Here, applying fair value for properties would enhance relevance, showing a clearer reflection of the company’s true financial position. The properties’ increased value could be disclosed as other comprehensive income, enabling users to understand the entity’s true profitability and asset value.

(iii) Comparability: By adopting a policy of capitalizing finance costs associated with the construction of new retail outlets, this policy change should be applied retrospectively per IAS 8. This approach enables consistency across financial periods, enhancing comparability and aiding users in making period-over-period comparisons.