1. Terachi Bhd is a multinational company, venturing into many types of business and investment activities. On 1 January 2013, Terachi Bhd acquired a new 10-storey building in Kajang, Selangor. The cost of the building was RM24,000,000, excluding legal and other incidental costs of RM2,000,000. The company also incurred promotionally and advertising expenses, looking for tenants of RM300,000. The estimated useful life of the building is 31 years.
2. On 10 January 2013, the Terachi Bhd managed to secure a tenancy contract and since then the building has been rented out to non-related organizations, earning total rental income of RM500,000 per month. Terachi Bhd also required to provide ancillary services of RM100,000 per annum and charge to the tenants of the premises as a fee. However, these services were considered not significant as compared to the whole arrangement. At the end of years 2013 and 2014, the market value of the building was RM26,700,000 and RM26,200,000 respectively.
3. Due to the remarkable demand of its product line, Terachi Bhd decided to occupy the entire building as its sales and managerial offices effectively from 1 January 2016. On that date, the market value of the building was RM28,000,000.
4. On 31 December 2017, the building was revalued by an independent chartered valuer to RM30,000,000.
5. The company adopts the fair value model and revaluation model to measure its investment property and property plant and equipment, respectively.
6. Required:

7. State the criteria for an item of investment property to be recognized as an asset according to MFRS 140 Investment Properties.

8. Discuss the appropriate accounting treatment for the building for the years ended 31 December 2013 and 2014. Prepare the relevant journal entries.
   Prepare the Statement of Profit or Loss (extract) of Terachi Bhd years ended 31 December 2013 and 2014.
   Advise Terachi Bhd on the accounting treatment of the transfer of investment property to owner-occupied property on 1 January 2016. Prepare the relevant journal entries.

9. e. Prepare journal entries for the year ended 31 December 2017.

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