Zahir Berhad has the following assets on 31 December 2019. 

(i)A moulding machine with a carrying value of RM1.25 million. At 31 December 2019, the company stopped using the machine as it recently acquired an up-to-date moulding machine. The company keeps the machine and care for its maintenance just in case it would be needed as a backup. On 15 February 2020, company’s client has offered to buy the machine for RM1.1 million and the sale was completed in March 2020. 

(ii)A property which is currently advertised through a major estate agent in Serdang for sale at RM4 million. The property was listed for sale in November 2019 and so far no buyer has been found. The company is hopeful of a sale. On 14 January 2020, an offer of RM3.9 million was received for the property and the sale was completed on 28 February 2020. The financial statements were authorized for issue on 10 March 2020. 

Required: 

Explain the accounting treatment as per requirement under MFRS 5 Non-Current Assets Held for Sale and Discontinued Operation, can either of these assets be classified as held for sale in the financial statements for the year ending 31 December 2019?

Answer rating: 100% (QA)

Step 1 b Assets on 31122019 i Molding machine carrying value RM125 million It stopped using the mach... View the full answer