On 1 January 2014, Idea Berhad purchased 100 percent of the equity of Moro Limited, a company in Morocco. At the date of acquisition, Moro Ltd has net identifiable assets at fair value of Moroccan Dirham (MD) 1,890,000 of which, retained earnings was MD90,000. The financial statement of the subsidiary is as given:

 

Moro Limited

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2016

 

	MD’000
Revenue	500
Cost of sales	(200)
Gross profit	300
Operating expense	(130)
Profit before taxation	170
Taxation	(100)
Profit after taxation	70
Other comprehensive income:
Revaluation surplus	10
Total comprehensive income for the year	80
Movement in retained earnings:
Retained earnings as at 1 January 2016	382
Profit for the year	70
Dividend	(2)
Retained earnings as at 31 December 2016	450
Moro Limited Statement of Financial Position As at 31 December 2016

 

				MD’000
Non-current assets				2,000
Current assets				810
Total assets				2,810
				MD’000
Equity and Liabilities
Equity
Share capital of MD1 each				1,600
Retained earnings				450
Revaluation reserve				210
				2,260
Current liabilities
Current liabilities				350
Non-current liabilities				200
Total equity and liabilities				2,810

 

Additional information:

1. Retained earnings as at 31 December 2014 was MD120,000

2. A revaluation exercise was conducted on 1 September 2016 that brought the value of land up by MD10 million.

3. Moro declared and paid dividend on 1 May 2016.

4. Exchange rates were as follows:

 

Rate	MD1 to RM
1 January 2014	2.00
31 December 2014	1.97
Average from 1 January 2014 to 31 December 2014	2.01
31 December 2015	2.06
Average from 1 January 2015 to 31 December 2015	1.96
1 February 2016	2.10
1 May 2016	2.15
1 September 2016	2.11
31 December 2016	2.20
Average from 1 January 2016 to 31 December 2016	2.05

 

5. All workings may be rounded to the nearest RM0.10 million.

 

REQUIRED:

Prepare the following translated financial statements of Moro Limited in accordance with MFRS 121 The Effects of Changes in Foreign Exchange Rates, that include:

(a) Statement of Profit or Loss and Other Comprehensive Income for the year ended 31December 2016. 

(b) Statement of Financial Position as at 31December 2016.

Answer rating: 100% (QA)

Statement of Profit Loss for the year ended 31 December 2016 Particulars MD000 Average Rate from 1 J... View the full answer