The 6-months deferment ends in August 2020. Thus, the company needs to continue its installment for fixed
Question:
The 6-months deferment ends in August 2020. Thus, the company needs to continue its installment for fixed asset financing in September 2020. The due date for the loan repayment is every 25th of the month.
Explain the status of the fixed asset financing for each of the scenarios below, in accordance with the Guidelines for Classification and Impairment Provisions for Loans/ Financing issued by the Central Bank of Malaysia, dated 16 April 2015.
(i) The company doesn't pay the installment due on 25th September 2020. What is the status of the account as at 30th September 2020?
(ii) The company still doesn't pay the subsequent installment due on 25th October 2020, 25th November 2020 and 25th December 2020. What is the status of the account as of 31st December 2020?
(iii) As Credit Recovery Officer of the bank, formulate action can be taken by the bank in managing scenario (ii) above. Discuss TWO (2) reasons to support your proposed action.
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso