Scenario 2: FBS Ltd provides a range of business services to sole traders, partnerships, and small companies. FBS Ltd owns its office building which is in Brisbane. In early 2020 a small management team was formed to review the cost structure of the companys operations. One of their findings was that the company was using approximately 20,000 kilowatt-hours (kWh) of electricity per year at a price of 40 cents per kilowatt-hour. After some research, FBS Ltd paid $10,000 to install solar panels on the roof of its office building in March 2021. The solar panels will be used to generate approximately 8,000 kilowatt-hours of electricity per year. The electricity generated by the solar panels can either be used by FBS Ltd or sold to AG Energy for 25 cents per kilowatt-hour.

(b) For Scenario 2, explain how FBS Ltd should account for the expenditure incurred to install the solar panels. Justify your answer by reference to the relevant conceptual framework definitions and recognition criteria. (3 marks)

(c) For Scenario 2, explain whether your answer to (b) would change if: (i) FBS Ltd did not own the office building but leased it under a 15-year lease agreement. (ii) Electricity generated by the solar panels could not be sold to AG Energ