Determine the appropriate accounting treatment of the following events in the accordance with MFRS 110 Events After the Reporting Period. Lazada manufacturing berhad produces refrigerators which uses linear technology that enable its refrigerators to be industry leaders in energy saving, freshness, noise level, capacity and durability. However in December 2018, the company discovered manufacturing defects in two of their products namely LG675L and RX722L. LG675L was manufactured and sold since September 2017 and was sold at RM 6999. RX722L was one of its new products manufactured and sold in the first quarter of 2019 at a price of RM 9699. The company was advised by its lawyers that it was highly probable that the company will have to pay damges of RM 2550000 for LG675L and RM 4350000 for RX722L. The financial statements for the year ended 31 December 2018 were authorized for issue on 1 march 2019.
Determine the appropriate accounting treatment of the following events in the accordance with MFRS 110 Events After the Reporting Period.
Lazada manufacturing berhad produces refrigerators which uses linear technology that enable its refrigerators to be industry leaders in energy saving, freshness, noise level, capacity and durability. However in December 2018, the company discovered manufacturing defects in two of their products namely LG675L and RX722L. LG675L was manufactured and sold since September 2017 and was sold at RM 6999. RX722L was one of its new products manufactured and sold in the first quarter of 2019 at a price of RM 9699. The company was advised by its lawyers that it was highly probable that the company will have to pay damges of RM 2550000 for LG675L and RM 4350000 for RX722L. The financial statements for the year ended 31 December 2018 were authorized for issue on 1 march 2019.
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