QUESTION 6

1. RLC Bhd (RLC) has the following properties as at 31 December 2019.

   Building A	Rent to Jinko Bhd. RLC does not provide significant ancillary services to Jinko Bhd. The tenancy agreement expires on 15 January 2020.
   Building B	An investment property under construction.
   Building C	Use as the head office.
   Building D	Use as a training centre for staff.

   In 2020, RLC carried out the following activities:

   1. On 2 February 2020, RLC Bhd moved its head office from Building C to Building A.

   2. In February 2020, RLC refurnished Building C and rent it out to Koko Bhd on 1 March 2020.

   3. The construction work of Buiding B was complete in May 2020.

   4. RLC sold Building D to Lala Bhd on 3 March 2020.

   RLC obtained a broadcasting licence from the government by separate acquisition. The broadcasting licence is renewable every 10 years if RLC complies with the relevant legislative requirements.

   The licence may be renewed indefinitely at little cost and has been renewed twice. RLC intends to renew the licence indefinitely and evidence supports its ability to do so. Historically, there has been no compelling challenge to the licence renewal. An independent valuer has tendered a report to RLC that, based on its estimate, the net cash inflows would still be positive within the estimation horizon in the renewal term of the license.

   Required:

   Fill in the blanks with the best option given below.

   MFRS 116	Residual value	Foreseeble limit
   MFRS 123	Be amortised	No foreseeable limit
   MFRS 136	Not be amortised	Indefinite
   MFRS 138	Tested for impairment	Finite
   MFRS 140	Tested for appreciation	Derecognised
   Property, plant and equipment	Investment property under construction	Recognised
   Investment property	Completed property	Indefinite useful life
   Owner-occupied property	Fair value	Finite useful life
   Intangible asset	Cost	Accumulated amortisation
   Impairment gain	Value in use	Accumulated depreciation
   Impairment loss	Recoverable amount	Accumulated impairment

   Building A is reclassified from ______ under______ to ______ under______ upon commencement of occupation for own use on 2 February 2020.

   Building B is transferred from_______ to______ upon completion of the construction work in May 2020.

   Building C is reclassified from______ to______ upon the end of the owner-occupation from 1 March 2020.

   Building D is______ as an asset on 3 March 2020.

   The broadcasting licence would be treated as ______ under ______, having an ______, when based on an analysis of all of the relevant factors, there is ______ to the period over which the asset is expected to generate net cash inflows for RLC. Therefore, the licence would______ until its useful life is determined to be ______.

   The licence would be______ in accordance with MFRS 136 annually and whenever there is an indication that it may be impaired. An ______ is the amount by which the carrying amount of an asset more than its______ .