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On 1 July 2018, Cengal Property Bhd. purchased a new building located in Melaka for RM50 million The building purchased is a 22-storey building where
On 1 July 2018, Cengal Property Bhd. purchased a new building located in Melaka for RM50 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 Cengal Property Bhd, as its headquarters. The property is appraised at the end of 31 December every year. The fair value of the building is determined to be RM53 million and RM60 million at 31 December 2018 and 2019 respectively. The useful life of the property is estimated at 25 years. The financial year-end for Cengal Property Bhd. is 31 December. Required: Discuss how the property is accounted for in the (a) book of Cengal Property Bhd
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