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Explain the accounting treatment of the transfer

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Question - Daebak Bhd owns a property with a carrying value of RM19.2 million (at revaluation of RM35 million) as at 1 July 2013. The asset revaluation reserve account has a balance of RM500,000.

On 1 July 2013, the property has a remaining useful life of 8 years. On that date, the company decided to convert the property to an investment property as the company moved to a new location. The fair value of the property on 1 July 2013 was RM18 million. The company adopts fair value model for its investment property, and the fair value of the property on 30 June 2014 was RM18.5 million.

Explain the accounting treatment of the transfer of owner-occupied property to investment property on 1 July 2013.

Reference no: EM133012978

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