PLAGIARISM DECLARATION FORM (T-DF)

Instructions

Please complete and attach this Plagiarism Declaration Form to each Assignment that you submit into
the Online Assignment Submission (OAS) system for marking.

I declare that the attached work is entirely my own (or when submitted to meet the requirements of an
approved group assignment is the work of the group), except where materials cited, quoted or paraphrased
are acknowledged in the text. I also declare that this work / assignment has not been submitted for
assessment in any other course or university without due acknowledgement.
I understand that plagiarism, collusion, and copying are grave and serious offences.
I understand that disciplinary action (which may include deduction of marks in the Assignment) will be taken
against me if I am found to be an offender of Assignment plagiarism.

Full name and IC No: Hemananthini Kalimuthu Date:04/03/2023

: 940710-07-5390

Assignment (Asgmt) Declaration Form

Semester/Year Jan 2023

Student’s Name Hemananthini A/P Kalimuthu

Student’s ID No: 041210082

Course Code BAC306/03

Course Title Advanced Financial Accounting and Reporting

Class Code AFA1-3C

Assignment No: 2

No. of pages of this 10

Assignment (including this
page)
Tutor’s Name LEE PEI EE
Course Lead’s Name LIM PENG KEAT
T-DF Assignment Declaration Form (3/2021 / version #004)
Question 1

(a) Potential limitations associated with financial accounting is the historical data. Financial
accounting is mainly historical and tells about the cost already incurred and accumulated
at the end of the accounting period. The historical cost is not a reliable basis for
predicting future earnings, solvency or overall managerial effectiveness. Financial
accounting does not provide day-to-day cost information to management for making
effective plans for the coming year and the period after that as financial data are
summarized at the end of the accounting period.

Improper classification of expenses is a limitation of financial accounting. In financial

accounting, expenses are not classified into direct and indirect, fixed and variable,
controllable and uncontrollable. Further expenses are not classified as to direct and
indirect items and are not assigned to the products at each stage of production to show the
controllable and uncontrollable items of overhead costs.

Financial accounting doesn’t have standard to assess the performance. Where there is no
well-developed system of standards to appraise the efficiency of the organisation in the
use of materials, labour and overhead costs by comparing the work of labourers, clerks,
salesmen and executives which should have been accomplished in producing and selling a
given number of products in an allotted period of time. It also does not provide
information to assess the performance of various persons and departments.

(b) Yes, the building in Nilai can be classified as non-current asset held for sale in
accordance with MFRS 5. It is because the building already vacated by the owner and
available for immediate sale. Besides, the owner also actively looking for the potential
buyer. In order to speed up the sale, owner already advertise on available building for
sale. Moreover, the possible costs are estimated earlier such as brokerage fee and legal
fee.
Question 2
a) Non-current assets can be both tangible or intangible assets. Non-current assets are
assets and property owned by a business that are not easily converted to cash within a
year. They may also be called long-term assets. Non-current assets are for long-term
use by the business and are expected to help generate income.

Tangible non-current assets are the physical things. For example, plant, land and
equipment which the business owns.

Intangible non-current assets are things that the business holds that do not have a
physical form. Intangible assets provide value to the business but it can be difficult to
convert them into cash. For example, Trademarks, Patents & Goodwill.

b) Based on MFRS, this suggestion is not necessary. First suggestion says that they are
expecting return by the retail customers which is not a reliable estimation where they
did not receive any complaints from buyers on the defect and might be no returns.
Second suggestion says that provision for unforeseen liabilities based on past
experience. This one also not reliable estimation where unforeseen liabilities are not
predictable.

There are 3 criteria which has to be met before a provision can be recognised
according to the MFRS. The first criteria are an entity has a present obligation (legal
or constructive) as a result of a past event. The second criteria it is probable that an
outflow of resources embodying economic benefits will be required to settle the
obligation. Lastly, a reliable estimate can be made of the amount of the obligation.

Therefore, above suggestions doesn’t meet MFRS137 criteria.

c)

RM
Carrying amount (1.4.2020) 248,000.00
Less: acc dep 15% - 37,200.00
Carrying amount (31.03.2021) 210,800.00

Recoverable Amount
NRV 200,000.00
Value in Use 214,600.00

The Recoverable amount is the higher of NRV & VIU = RM214,600

The value of plant to be recognised as at 31 March 2021 is the lower of it carrying
amount (RM210,800) and recoverable amount (RM214,600).
Therefore, the correct value of plant to be recognised is RM210,800.
Question 3
Flyday - Statement of cash flows for the year ended 30 September 2022
RM RM
Cash flows from operating activities:
Profit before tax 300.00
Adjustments for:
Depreciation of property, plant & Equipment 50.00

Finance Costs (net) 75.00

Profit on sale of non-current asset investment - 5.00

Increase in Inventory - 48.00

Increase in Receivables - 75.00
Increase in Payables 8.00
Cash generated from operations 305.00
Interest Paid - 75.00
Income tax paid - 90.00
Net cash from operation activities 140.00
Cash flows from Investing activities:
Payments to acquire intangible non-current assets - 175.00
Sale of Investment 30.00
Interest Receipt 25.00
Net cash used in investing activities - 120.00

Cash flows from financing activities:

Proceeds from long term loan 120.00
Dividend paid - 80.00
Net Cash from financing activities 40.00
Net decrease in cash and cash equivalents 60.00
Cash and cash equivalents at beginning of period - 97.00
Cash and cash equivalents at end of period - 37.00
Question 4
a) MFRS defines a lease term as the noncancellable period for which the lessee has the
right to use an underlying asset including optional periods when an entity is
reasonably certain to exercise an option to extend (or not to terminate) a lease.

In order for such contract to exist, the user of the asset needs to have the right to direct
the use of asset where they can decide how and where to use the asset and have the
full control over the asset during the period of contract. Besides, they have right to
obtain substantially all of the economic benefits from the use of the asset.

Based on above contract, yes, it is considered as a lease in accordance with MFRS 16

Leases. It is because the truck which are to be under lease are clearly specified in the
contract. MBSJ also have rights to direct the use where they determine how the truck
are used in the refuse collection. MBSJ also allowed to use the truck for other purpose
if they wanted too.

b) i) The tax base of an asset arises when there is an amount that will be deductible for
tax purposes against any taxable economic benefits that will flow to an entity when it
recovers the carrying amount of the asset. If those economic benefits will not be
taxable, the tax base of the asset is equal to it carrying amount.

While, the tax base of a liability arises when it carrying amount, less any amount that
will be deductible for tax purposes in respect of that liability in future periods. In the
case of revenue which is received in advance, the tax base of the resulting liability is
its
carrying amount, less any amount of the revenue that will not be taxable in future
periods.

ii) The way the temporary differences are identified as taxable or deductible is where
a deferred tax liability shall be recognised for all taxable temporary differences,
except for the following instances where the initial recognition of goodwill or the
initial recognition of an asset or liability in a transaction which is not a business
combination and at the time of the transaction, affects neither accounting profit nor
taxable profit (tax loss).

While, a deferred tax asset shall be recognised for all deductible temporary
differences to the extent that taxable profit will be available, against which the
deductible temporary difference can be utilised. A deferred tax asset will not be
recognised, when it arises from the initial recognition of an asset or liability in a
transaction that is not a business combination, and at the time of the transaction,
affects neither accounting profit nor taxable profit (tax loss).

iii) Deferred tax asset can be recognised only if it is probable that taxable profits will
be available against which the deferred tax asset can be utilised. Where an entity has a
history of tax losses, the entity recognises a deferred tax asset only to the extent that
the entity has sufficient taxable temporary differences or there is other convincing
evidence that sufficient taxable profit will be available.

While, a deferred tax liability shall be recognised for all taxable temporary differences
except for the initial recognition of goodwill or at the time of the transaction, affects
neither accounting profit nor taxable profit (loss). A taxable temporary difference
results in a deferred tax liability whereas a deductible temporary difference results in
a deferred tax asset.
Question 5

Tefa Berhad
Statement of Comprehensive Income for the year ended 31 December 2022

RM RM

Turnover 40,088.00
Less : Cost of Sales 18,000.00
Gross Profit 22,088.00
Selling & Distribution Expenses 3,680.00
Administrative Expenses (10,600 + 100) 10,700.00
Finance Cost 840.00
Change in FV of investment held for trading N5 1,000.00
Profit before taxation 7,868.00
Taxation:

Current tax expenses 38.00

Deferred tax expenses 250.00
Profit for the year 8,080.00

Other comprehensive income

Surplus on revaluation of land (10m-8.8m) 1,200.00

Surplus on available for sale financial asset (W3) 1,000.00
Total Comprehensive Income 10,080.00
 Tefa Berhad
Statement of Financial Position as at 31 December 2022
Assets RM
Non-Current Assets
Property, plant and equipment (W5) 38,400.00
Investments N(v) 12,000.00
50,400.00

Current Assets
Inventories 17,768.00
Account Receivables(3,200-512) 2,688.00
Cash at bank 6,700.00
77,556.00

Equity and Liabilities

Share Capital 50,500.00
Retained Earning 11,748.00
Other reserves

62,248.00

Non Current Liabilities

8% Loan Notes 12,000.00
Deferred tax liability (W1) 420.00

Current Liability
Tax payable (W2) 38.00
Account Payables 3,638.00
Accrued interest 420.00
78,764.00

Working 1 - Deffered Tax

Deferred Tax
Balance at 1.1.22 670,000.00
Deferred Tax movement
(Balancing) - 250,000.00
Balance at 31.01.22
(RM1,680,000 X 25%)) 420,000.00
 Working 2- Tax expenses
Tax for the year (N6) 1,408,000.00
(+) Transfer from DT a/c 250,000.00
1,658,000.00
Tax paid - 1,620,000.00
Tax payable 38,000.00

Working 3 - Available for Sale

Financial asset
FV 8,000,000.00
- Cost 7,000,000.00
= Surplus on Revaluation 1,000,000.00

Working 4 - Impairment Loss

Value in use
Year RM RM
31.12.2023 180000 x 0.91 163,800.00
31.12.2024 140000 x 0.83 116,200.00
31.12.2025 150000 x 0.75 112,500.00
Value in use 392,500.00
NRV (N3) 400,000.00

*Therefore, the recoverable amount is RM400,000, whichever is higher

Cost 800,000.00

(-) Accumulated Depreciation 300,000.00

Carrying Amount at 31.12.2022 500,000.00

Carrying Amount 500,000.00

Recoverable Value 400,000.00
Impairment Loss 100,000.00

Working 5 - Property, Plant & Equipment

Cost/Rev Acc Dep Impairment Carrying Value
(RM'000) (RM'000) Loss (RM'000) (RM'000)
Plant 800.00 - 300.00 - 100.00 400.00
Land 10,000.00 10,000.00
Building (36,800 - 8,800) 28,000.00 - 3,360.00 24,640.00
Machinery & Equipment 4,800.00 - 1,440.00 3,360.00
38,400.00