Reference no: EM132631331

Blackjack is a local government organization whose financial statements are prepared using IFRS. Blackjack wishes to make a credible investment property portfolio with a view to determining if any property may be considered surplus to the functional objectives and requirements of the local government organization. The following portfolio of property is owned by Blackjack.

Blackjack owns several plots of land. Some of the land is owned by Blackjack for capital appreciation and this may be sold at any time in the future. Other plots of land have no current purpose as Blackjack has not determined whether it will use the ordinary course of operations.

The local government organization supplements its income by buying and selling property. The housing department regularly sells part of its housing inventory in the ordinary course of its operations because of changing demographics. Part of the inventory, which is not held for sale, is to provide housing to low-income employees at below market rental. The rent paid by the employees covers the cost of maintenance of the property.

Required:

Question 1: Discuss the accounting treatment of the scenario above