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How great things bhd shall account for the transfer of use

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Problem 1: On 1 March 2020, Great Things Bhd purchases an office building at a cost of RM2,200,000. Great Things Bhd adopts the cost model to measure its investment property. The company has the intention to letting out the building to tenants. However, due to the Covid-19 pandemic and the Movement Control Order, the management of Great Things Bhd immediately decides to sell the office building. Thus, Great Things Bhd commences development on the office building for sale purposes and thus reclassified it as inventory. The fair value of the office building as at the date of change in use is RM2,250,000. How Great Things Bhd shall account for the transfer of use?

a) Dr Investment Property RM2,250,000; Cr Inventory RM2,250,000.

b) Dr Inventory RM2,250,000; Cr Investment Property RM2,250,000.

c) Dr Inventory RM2,200,000; Cr Investment Property RM2,200,000.

d) Dr Inventory RM2,250,000; Cr Investment Property RM2,200,000; Cr Gain in SOPL RM50,000.

Reference no: EM132962848

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