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Advise the management on the accounting treatment

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Reference no: EM133064195

Question - Ten Bhd has an investment property which is fully rented out to various organizations for the past three years. Ten Bhd provides security and maintenance for the property.

The following information was given:

Extract of the statement of financial position of Ten Bhd as at 30 June 2019

Investment Property (Note1) RM500,000

Note 1 The remaining useful life of the investment property on that date was 25 years. The company adopt fair value model to account the investment property.

Additional information: On 1 July 2019, Nine Bhd decided to convert the investment property to owner-occupied property. The fair value of the property on that date was increased by 30%. It is the policy of the company to use the cost model for property, plant and equipment.

Required - Advise the management on the accounting treatment for the above transfer according to related MFRSs (assuming the company closes its books on the 30 June each year).

Reference no: EM133064195

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