From 2011 and 2015 the building was accounted for an investment property because it was used
to earn rental income. However in January 2016 the building was used in the production and
supply of its goods. Since the usage of the building has changed, the building must be reclassified
from an investment property to owner occupied property (PPE) which is governed under MFRS
116.
Journal Entries
DEBIT CREDIT
1.1.2011
DR IP
CR BANK
800,000
800,000
1.1.2012
DR IP
CR FV GAIN ON IP
150,000
150,000
1.1.2013 No CHANGES in value of the asset
Amount of asset remain same as 950,000
1.1.2014
DR IP
CR FV GAIN ON IP
50,000
50,000
1.1.2015 No CHANGES in value of the asset
Amount of asset remain same as
1,000,000
1.1.2016
DR IP
CR FV GAIN ON IP
500,000
500,000
Year 2016 IP – PPE
DR PPE
CR IP
1,500,000
1,500,000
31.12.2016
DB DEPRECIATION
CR ACCUMULATED DEPRECIATION
75,000
75,000
31.12.2016
DR PPE
CR ACCUMULATED DEPRECIATION
75,000
75,000