Beruflich Dokumente
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QUESTION 1
On 31 December 2018, the directors of Gavina Bhd decided to change the accounting policy
on capitalisation of borrowing costs. The new policy, to take effect from 1 January 2018, is
that all borrowing costs shall be recognised as an expense in the year they are incurred. The
accounts for 2018, however, have been drafted on the basis of the previous policy of
capitalising borrowing costs and amortising them for the period of five years.
The summarised profit or loss and retained earnings profits for the year ended 31 December
2018 and its comparative figures are as follows:
The beginning balance of capitalised borrowing costs on 1 January 2018 and 2017 were
RM2.5 million and RM2 million, respectively. Borrowing costs incurred and capitalised in
2018 and 2017 were RM1.2 million and RM1 million respectively. Meanwhile, the
amortisation of borrowing costs in 2018 and 2017 were RM800,000 and RM500,000
respectively. The tax rate was 24% throughout the two years.
REQUIRED:
(a) Discuss the accounting treatment of the above transaction in accordance to MFRS
108 Accounting Policies, Changes in Accounting Estimates and Errors.
(b) Prepare the partial comparative Statement of Profit or Loss and Other Comprehensive
Income and Statement of Financial Position for the year ended 31 December 2018
incorporating the accounting changes made by Gavina Bhd.
1
QUESTION 2
Maxim Bhd is one of the largest industrial products manufacturers in Malaysia. The financial
statements of the company that ended on 31 March 2019 has been authorised for issue by its
directors on 30 June 2019. The following were material transactions or events that occurred
in 2019:
1. Maxim Bhd investments in listed shares that are held-for-trading were classified as
at fair value through profit or loss. As at 31 March 2019, these investments were
recorded at the market value on that date, which was RM460,000. Due to uncertainty
in the market, on 1 May 2019, the fair value of the investments had fallen to
RM420,000.
2. Maxim Bhd had among its receivables a debtor, Netlife Sdn Bhd with a balance of
RM230,000 as at 31 March 2019. On 11 June 2019, Maxim Bhd was informed that
Netlife Sdn Bhd, due to its financial difficulty, had been placed under receivership
and the likelihood for Maxim to collect the receivable amount is remote.
REQUIRED:
Discuss the accounting treatment of the above events in the financial statements in
accordance to MFRS 110 Events after the Reporting Period.