On 1 July 2019, Lapis Property Bhd purchased a new building located in Kelantan for RM150 million. The building purchased is a 22-storey building where 15 floors are rented out to its subsidiaries and five floors to outsiders (small retailers), while the balance is used by Lapis Property Bhd as its headquarters. The property is appraised at the end of 31 December every year. The financial year-end for Lapis Property Bhd is at 31 December. The fair value of building is determined to be RM170 million and     RM200 million 2019 and 2020 respectively. The useful life of property is estimated at 25 years. Lapis applies fair value model.

 

       Required:

 

       Determine how the property is to be accounted for in the book:

            a)  Lapis Property Bhd                

            b)  its group account.

Answer rating: 100% (QA)

Answer a In the books of Lapis Property Bhd The 20 floors rented ou... View the full answer