On 1 July 2018, ARR Bhd moves out from its present head office in Pontian to a
Question:
On 1 July 2018, ARR Bhd moves out from its present head office in Pontian to a new office in Johor Bahru. The building in Pontian was then rented out to Itchy Bhd. The building in Pontian was acquired on 1 July 2014 at a purchase price of RM4,000,000 and the company also incurred legal cost of RM250,000. It was depreciated on a straight-line basis over 40 years. The fair value of the building on 1 July 2018 was RM4,000,000.
Due to its business expansion strategy, ARR Bhd purchased a 5-storey building in Segamat for RM1,000,000 on 1 October 2020. Four stories are occupied for the company's business operation. The fifth floor is rented out to an independent third party. The floors cannot be sold separately.
ARR Bhd adopts the revaluation model for its building under MFRS 116 Property, Plant and Equipment and fair value model for its building under MFRS 140 Investment Property. The company's financial year ends on 30 June.
International Business
ISBN: 9781292274157
8th Edition
Authors: Simon Collinson, Rajneesh Narula, Alan M. Rugman