Question
The management of DESMUN (PTY) LTD decided that the office building used to house its staff will be leased to tenant as a result of
The management of DESMUN (PTY) LTD decided that the office building used to house its staff will be leased to tenant as a result of the company decided to implement a hybrid working policy. Management concluded an agreement with a tenant who will occupy 60% of the building. The lease agreement includes a clause where the company will be responsible for the service costs such as repairs & maintenance, network/wifi-connectivity and the utility bill.
Required:
(a) Discuss how the office building should be recognised in the accounting financial statements in compliance with the accounting standards after the decision to lease the property was implemented.
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