QUESTION $1$

On $1$ January $2018,$ Ka Chul Sdn Bhd $($KCSB$)$ purchased a property $($Property Shah Alam$)$ comprising freehold land and building costing RM$20$ million. The cost of the land was RM$10$ million. The building was used to operate its business. The estimated useful life of the building was $20$ years. KCSB adopted cost model.

On $1$ July $2020,$ KCSB ceased using the building to operate its business and began letting it out at market rental. The fair value of the land on $1$ July $2020$ was RM$11$ million and of the building RM$8$ million. The entity would adopt the fair value model to measure the investment property. On the same date, another property $($Property Bangsar$)$ was purchased to house their employees. Majority of the employees are highly skills expatriate in oil and gas industries. The expatriates are paying rental at RM$2,000$ which is $50\%$ below the market price. KCSB bought the property at RM$10$ million. The useful life of this property was $10$ years. In year $2020,$ professional valuer estimate the value to be RM$12$ million.

Required:

a$)$ Discuss the accounting treatment of Property Shah Alam and Property Bangsar in year $2018$ and $2020.$

  

Answer rating: 100% (QA)

a Accounting treatment of Property Shah Alam and Property Bangsar in 2018 and 2020 Property Shah Alam 2018 On January 1 2018 KCSB purchased Property S... View the full answer