- 10 Marks
PSAF – L2 – Q10.3 – International public sector accounting standards
Account for the treatment of a property reclassified as investment property in 2024 financial statements of the National Retirement Oversight Agency.
Question
The National Retirement Oversight Agency acquired a property on 1 January 2021 at a cost of GHc40,000,000 and immediately occupied it as office premise. On acquisition, it was estimated to have a useful life of 50 years. Subsequent to its acquisition, the asset was measured at depreciated cost until 1 October 2024 when management decided to use the building mainly for rentals. Following this decision, the property was fair valued at GHc38,000,000. The National Retirement Oversight Agency adopted the fair value model for subsequent measurement. At 31 December 2024, it was fair valued at GHc39,000,000.
Required:
Account for the treatment of this property in the 2024 financial statements of The National Retirement Oversight Agency.
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