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      Question

      Entity owns a building, part leased to tenants, part

      used for admin. How should it account?
      A Entire building as PPE. Correct Answer Incorrect Answer
      B Entire building as investment property. Correct Answer Incorrect Answer
      C Split: leased portion = investment property; used portion = PPE. Correct Answer Incorrect Answer
      D Choose any policy consistently. Correct Answer Incorrect Answer
      E Account as inventory. Correct Answer Incorrect Answer

      Solution

      Property portions are treated separately if portions can be sold/leased separately. Otherwise, if insignificant owner-use, entire property = investment property.

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