Pota Berhad acquired a building costing RM2,400,000 on 1 May 2013 with an estimated useful life of 50 years. The building was occupied as the headquarters for its business operations in Georgetown, Penang. In a recent board meeting in January 2023, the directors had agreed to move the company’s headquarters to a new building located in Shah Alam, Selangor. Since then the company has been actively seeking a buyer. In addition, advertisements have also been placed to speed up the sale of the building. The building in Nilai has been vacated in October 2023. It was estimated that property brokerage fee of RM45,000 and legal fee of RM26,000 will be incurred in order to sell the building. Required: Explain whether as at 31 December 2023, the building in Nilai can be classified as a non-current asset held for sale in accordance with MFRS 5 Non-current Asset Held for Sale and Discontinued Operations. Please give explanation in details with example
Pota Berhad acquired a building costing RM2,400,000 on 1 May 2013 with an
estimated useful life of 50 years. The building was occupied as the
headquarters for its business operations in Georgetown, Penang. In a recent
board meeting in January 2023, the directors had agreed to move the
company’s headquarters to a new building located in Shah Alam, Selangor.
Since then the company has been actively seeking a buyer. In addition,
advertisements have also been placed to speed up the sale of the building.
The building in Nilai has been vacated in October 2023. It was estimated that
property brokerage fee of RM45,000 and legal fee of RM26,000 will be
incurred in order to sell the building.
Required:
Explain whether as at 31 December 2023, the building in Nilai can be
classified as a non-current asset held for sale in accordance with MFRS 5
Non-current Asset Held for Sale and Discontinued Operations.
Please give explanation in details with example
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