Innforest Bhd Innforest Bhd purchased 10 acres of land on 1 January 2011 to develop a project for tourism purposes. The project is known as Seri Banun Kampung Adat Melayu. It is a place to gather the custom and traditions of all Malay heritage such as Acheh, Banjar, Bugis, Jawa, Minangkabau as well as Malaysian culture in one stop centre. The fair value of 10 acres land was RM500,000. The 3 acres of land was reserved as a fruit orchard for special occasion and 1 acre was reserved for future undetermined used. The project is aimed to offer the visitors with the feel of experience to live, learn and taste the foods serves in a traditional way of old 'bangsa melayu' during their stay. The 'kampung' environment also provide the ambience of old Malay times to be enjoyed by the visitors. The visitors will be served with a traditional food cooked nicely in a traditional way during their stay in the village. Then, the foods will be sent to the visitor houses and they can have it like the old Malays do. Normally, the visitors will allow to come by booking the slot in advance and in a minimum of 10 peoples in a group. No walk-in visits are allowed. Usually, more visitors would come during fruit seasons as compared to other months of the year to experience the fruit picking activities including collection of durians. Accounting Policy Innforest Bhd adopts revaluation/fair value model to record its non-current assets. The grant is treated as related to asset method. The depreciation is using straight line method. 3 The useful life of assets are as follows: Houses : 20 years with major maintenance every 5 years. Machine : 10 years with major overhaul every 5 years. The financial year end is on 31 December every year. Required: Part A 1. Explain the accounting treatment for the land purchased by Innforest Bhd on 1 January 2011. (7 marks)