Show the movement of the building for the year

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Oak Bhd is involved in manufacturing frozen foods for the local market in Johor. On 1 January 2015, Oak Bhd acquired a building for administrative purpose at a cost of RM3,000,000. The building has a useful life of 50 years. On 1 January 2018, the building underwent an extensive renovation at a cost of RM517,000 to accommodate increase in company's activities. The renovation increases the capacity of the building and helps improve the performance of the administrative operation. On 1 January 2019, the fair value of the building was RM3,312,000. The company measures its property, plant and equipment using revaluation model and depreciates it based on period of ownership. Financial year ends on 31 December every year.

Required:

Problem i. Explain the accounting treatment of the building for the year ended 31 December 2018 based on MFRS 116 Property, plant and equipment.

Problem ii. Construct a note to the accounts to show the movement of the building for the year ended 31 December 2019

Reference no: EM132739545

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