Question
Western Berhad acquired a newly-built 20-storey office building in Kuala Lumpur, in January 2020. The office building is currently being used in the operation of
Western Berhad acquired a newly-built 20-storey office building in Kuala Lumpur, in January 2020. The office building is currently being used in the operation of Western Berhad. However, Western Berhad received various offers from potential tenants and has planned to lease the whole building under an operating lease in 2022. Discuss whether Western Berhad has to recognize the building as an investment property in accordance with MFRS 140 Investment Property for the year 2022.
A. Yes. This is because a building that planned to be leased out under an operating lease is considered as investment property, under MFRS 140.
B. Yes. This is because the property is considered as investment property for the year 2020, 2021 and 2022.
C. No. This is because a building that planned to be leased out under an operating lease is considered as owner-occupied property.
D. No. This is because the property is considered as owner-occupied property for the year 2020, 2021 and 2022.
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