(a) Financial crisis, corporate collapses, Covid-19 disease and war are some of the events in the...

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(a) Financial crisis, corporate collapses, Covid-19 disease and war are some of the events in the past, still happening and recently post threats to financial stability of companies. These threats effect companies' ability to continue their operations, and consequently main users of external financial reporting confidence. Hence, based on MFRS 9: Financial Instruments, MFRS 132: Financial Instruments Presentation, MFRS 7: Financial Instruments - Disclosures and relevant market sources information, discuss how financial reporting for impairment of financial assets look after and oversee the interest of reporting entities and main users of external financial statements. Amongst others, your discussion about impairment of financial assets must include the following information: General approach model for ECL financial reporting (GAM) Simplified approach model for ECL financial reporting (SAM) Examples of presentation of impairment of financial assets information (that are recognised and measured under respective GAM and SAM) on financial statements Information about impairment of financial assets disclosed in notes to the accounts (12 Marks) (b) On 1 January 2020, Kurnia Bhd granted 100 share appreciation rights (SARS) to each of its 400 employees. Employees must remain employed by the company for 3 years from the grant date to be eligible to exercise the rights in the three-month period from 1 January 2023. All rights will be settled in cash. The fair value of each SAR was as follows: Date 1 January 2020 31 December 2020 31 December 2021 Fair value of SARS (RM) 13 14 16 In the year ended 31 December 2020, 25 employees left and at that date it was expected that a further 55 of employees would leave in the next two years. In the year ended 31 December 2021, 15 employees left Kurnia Bhd and further 20 were expected to leave the following year. Required: (i) Prepare journal entry to account for the SARs in the book of Kurnia Bhd for the years to 31 December 2021. (ii) Explain how the accounting treatment used in (i) would have been different if share options had been granted rather than SARS (8 Marks) (a) Financial crisis, corporate collapses, Covid-19 disease and war are some of the events in the past, still happening and recently post threats to financial stability of companies. These threats effect companies' ability to continue their operations, and consequently main users of external financial reporting confidence. Hence, based on MFRS 9: Financial Instruments, MFRS 132: Financial Instruments Presentation, MFRS 7: Financial Instruments - Disclosures and relevant market sources information, discuss how financial reporting for impairment of financial assets look after and oversee the interest of reporting entities and main users of external financial statements. Amongst others, your discussion about impairment of financial assets must include the following information: General approach model for ECL financial reporting (GAM) Simplified approach model for ECL financial reporting (SAM) Examples of presentation of impairment of financial assets information (that are recognised and measured under respective GAM and SAM) on financial statements Information about impairment of financial assets disclosed in notes to the accounts (12 Marks) (b) On 1 January 2020, Kurnia Bhd granted 100 share appreciation rights (SARS) to each of its 400 employees. Employees must remain employed by the company for 3 years from the grant date to be eligible to exercise the rights in the three-month period from 1 January 2023. All rights will be settled in cash. The fair value of each SAR was as follows: Date 1 January 2020 31 December 2020 31 December 2021 Fair value of SARS (RM) 13 14 16 In the year ended 31 December 2020, 25 employees left and at that date it was expected that a further 55 of employees would leave in the next two years. In the year ended 31 December 2021, 15 employees left Kurnia Bhd and further 20 were expected to leave the following year. Required: (i) Prepare journal entry to account for the SARs in the book of Kurnia Bhd for the years to 31 December 2021. (ii) Explain how the accounting treatment used in (i) would have been different if share options had been granted rather than SARS (8 Marks)

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a Financial Reporting for Impairment of Financial Assets 1 General Approach Model GAM for Expected Credit Loss ECL Reporting Under MFRS 9 the General Approach Model GAM is used to account for impairme... View the full answer