Fresh Produce Sdn Bhd (FP) is a plantation company which owns 100 acres of agricultural land in
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Question:
Fresh Produce Sdn Bhd (FP) is a plantation company which owns 100 acres of agricultural land in Pahang, Malaysia. FP has been operating on this land for more than ten years. During the year 2017, FP disposed of two acres of the land to a nearby plantation company in order to settle a dispute over the boundaries of the land. Prior to this, FP had never disposed of any of its land.
Required: Applying the badges of trade, briefly explain whether the receipt from the disposal of the two acres of land by Fresh Produce Sdn Bhd is capital or revenue in nature.
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