Explain what is meant by non-current assets held for sale

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Reference no: EM132506639

On January 2019, Presto purchased a property comprising of land and building costing RM15 million. The cost of the land was RM5 million. The building was used to operate its business. The estimated useful of the building was 20 years. Presto adopted the cost model. On I July 2019, the company ceased using the building to operate its business and began letting it out at the market rental. The fair value of the land on 1 July 2019 was RM 6.2 million and of the building RM11 million. The entity would adopt the fair value model to measure the investment property.

Question a) Explain what is meant by non-current assets held for sale and the criteria which must be satisfied in order for an asset to be classified as held for sale.

Question b) Discuss the accounting treatment of the land and building in years 2015 and 2019.

Question c) Discuss the accounting treatment on the land and building un years 2015 and 2019 if the company had used revaluation model. The fair value of the land and building was RM11 million and RM 10.8 million respectively on 31 December 2019.

Reference no: EM132506639

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