Tutorial 8 MFRS 5 (page 130)

Jane Lazar Textbook

Question 1
The tangible non-current asset cannot be classified as held for sale as the Grease Bhd has not
decided to sell it or lease it. Therefore it should be stated under non-current asset and
depreciation. The carrying amount is RM 20 million. It cannot be classified as asset held for
sale.
Question 2
The asset cannot be classified as asset held for sale, because the balance sheet is done before
they sell the asset. To classify as asset held for sale, the commitment should be done before
the balance sheet date. On the 14th of May, the treatment of plant is covered in disposable
asset in MFRS 116.
Question 5
The asset can be classified as assets held for sale, because it is committed to sell before
completing the balance sheet. This is because assets were available for immediate sale.
Negotiating is known as actively finding for assets, it is highly probable to be sold. The fair
value less cost to sell is RM 4,500,000. This is because the fair value is higher. If the
company did not perform well, thus the company needs to sell the asset.
Question 6
Impairment loss
720 – (600 -10) = 130
*600 is fair value

*10 sale

The impairment loss of RM 130 million will be allocated in accordance with MFRS 136.
RM million RM million RM million
Goodwill 50 (50) -
PPE 560 (80) 480
Inventories 100 - 100
Trade Receivables 60 - 60
Trade Payables (50) - (50)
720 (130) 590

*560 = 240 + 320

PPE at cost
240
× 80 = 34.29
560

PPE at valuation
320
× 80 = 45.71
560

The impairment loss is not allocated to PPE valuation. Inventories, Trade receivables and
Trade Payables as prior to the disposable group being classified.