3 (a) (i) Further information requirements
1 mark for each further information point explained:
– The reason for the purchase, to understand the business rationale
– Any specific plans for how Faster Jets Co may make use of the land in the future
– The date of purchase
– Whether the land was purchased for cash or if finance was taken out
– Who is leasing the land? This could establish whether the arrangement is with a related party
– Whether the rental arrangement is a finance or operating lease
– What is the land being used for?
– The location of the purchased land – this is necessary to plan the logistics of the audit
– Does the company hold any other investment property, and if so is that also held at fair value?
– What is management’s rationale for the accounting policy choice to measure the land at fair value?