2. Answer all parts of this question.

(a) You are given the following information in relation to Recorder Ltd:

Required:

Define and calculate the price earnings ratio for Recorder Ltd.

(b) Identify three types of joint venture and discuss how joint ventures are accounted for.

(c) What are events after the statement of financial position date and how are they accounted for?

(d) A non-current asset (building) has been acquired by a company and it wishes to account for this as an investment property. The building cost £2,100,000 on 1 January 2016 and its market value on 31 December 2016 is £2,700,000. The company’s depreciation policy for similar non-current assets is the reducing balance method using a rate of 10%.

Required:

What are investment properties and how are they accounted for under IAS 40? Show how the non-current asset would be accounted for in the income statement for the year ended 31 December 2016 and in the statement of financial position as at 31 December 2016 if it could be classed as an investment property using both the fair value model and the cost model.