i) Seri Bhd acquired a property on 1 June 2020 which it intended to sell. The property was obtained as a result of a default on a loan agreement by a third party and was valued at RM650,000 on that date. It was offset against the loan. The property was in a state of disrepair and Seri Bhd intended to complete the repairs before selling the property. The repairs were completed on 31 January 2021. The property was sold for RM1,000,000 on 25 March 2021. As at December 2020, the property was classified as ‘held for sale’ and shown at net of sale proceeds of RM1,000,000. The property was depreciated at 10% per annum on a straight-line basis and no depreciation had been charged in the year. Seri Bhd year-end is 31 December.

Required:

Discuss the accounting treatment of the premise under MFRS5.

ii) Interm Bhd had an equipment with a carrying amount of RM500,000 as at 31 March
2020. However, the equipment was ceased to be used because of economic downturn. The company had decided on 30 June 2020 which was its financial year-end, to maintain the equipment in working condition in case of a change in economic conditions. However, the equipment was sold by auction on 30 July 2020 for RM800,000.

Required:

Discuss the accounting treatment of the equipment as at 30 June 2020 under the MFRS 5.

Answer rating: 100% (QA)

i In regard to the tax treatment on completion of sale within one year from the date of classifying ... View the full answer