(1)     The building will be treated as investment property in accordance with IAS 40 . If use fair value model – revalue to market value of $180,000. The difference of $20,000 credited to profit or loss. If following cost model – depreciate based on cost and do not revalue.  Depreciation for current period is $3,136 and net book value is $153,664 ((160,000 – 160,000*2%) )*2%

(2)     The machine is to let it out to a group company and so will not be treated as an investment property in the group financial statements as it is owner-occupied.  However, in the separate financial statements of Hightech the machine can be classified as investment property (IAS 40).