Tutorial Answer MFRS 5

December 2016 (Jitu Bhd)

e.

During the year ended 30 June 2016, the plant cannot be classified as ‘held for sale’. The
extension beyond one year period is not acceptable because it is beyond the control of the
entity. Even though the company is still committed to sell the plant and trying to make the
sale highly probable by modifying the plant, but the modification works will make the plant
not available for immediate sale in its present condition. Since the company is not willing to
reduce the price to its fair value, it is also not making the sale highly probable and does not
meet the measurement requirement for non-current asset held for sale which is to be
measured at lower of carrying amount and fair value less cost to sell. (The sale is not highly
probable)

July 2017 (Semeling Bhd)

d.

The old building will be classified as a PPE based on MFRS 116 from 1 January 2016 till 31
August 2016 because it is still occupied by the company. Once the new building is
completed on 31 August 2016, the old building can be classified as a non-current asset held
for sale based on MFRS 5. The carrying amount will be recovered through sale rather than
continuing use. The old building is now available for immediate sale in its present condition
and the sale is highly probable.

e.

The old building classified as “held for sale” will be measured at the lower of carrying amount
and fair value less cost to sell. The carrying amount was RM7,520,000 (8,000,000 -480,000
(8,000,000/50 x 36/12) and fair value less cost to sell was RM7,275,000 (7,500,000 –
225,000). Therefore building will be measured and capitalized in the SOFP at RM7,275,000.
Impairment loss of RM245,000 (7,520,000-7,275,000) will be expensed off in the SOPL.
Once the building is classified as non-current asset held for sale based on MFRS5, building
is no longer depreciated.

Jun 2019 (AFNA Healthcare Bhd)

c.

The hospital building in Temerloh cannot classify a MFRS5 NCA Held for sale during the
year ended 31 December 2017. This is due to the reason the hospital is not available for
immediate sale since the relocation of staff will only takes place until 31 March 2018. For the
year ended 31 December 2018, from January until 31 December 2018, the hospital is still
classified as MFRS116. It is reclassified as MFRS starting from 1 April 2018 when the
hospital is ready for immediate sale.
d.

The hospital held for sale will be measured at the lower of carrying amount and fair value
less cost to sell. The CA was RM11,400,000 and FVLCTS is RM11,500,000 (11,750k-250k).
Therefore, the building is measured at RM11,400,000 in SOFP. There is no
impairment,since the CA is lower than FVLCTS.