Financial Accounting and Reporting 2: Investment Property (All the information are stated in the questions below with the attachment)

QUESTION 1

Two pieces of land in Semenyih and Puchong and also an eight-storey office building have been acquired by Nayland Bhd on 1 July 2017. The cost of Semenyih land, Puchong land and office building are RM3,500,000, RM4,000,000 and RM5,000,000, respectively. Puchong land was acquired to construct Nayland's warehouse while the office building was rented out to its subsidiary company, Mayland Bhd at market rental rates.However, the management of Nayland Bhd has not decided whether to use Semenyih land for expansion or sell it later when the price goes up. It is estimated that the office building will evenly provide benefits to the company over its useful life of 40 years. Nayland Bhd uses a revaluation model for plant, property and equipment (PPE) and fair value model for its investment property. Nayland Bhd's accounting year ends on 31 December each year. A professional appraiser has assessed the propertie's market value for the year end 2017 and 2018, as follows:

Property Fair Value 2017 Fair Value 2018 (RM) (RM) Semenyih land 3,300,000 2,500,000 Puchong land 4,000,000 4,050,000 Eight-storey office building 5,500,000 5,200,000