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Required: Explain to your friend the principal requirements of MFRS 116 Property, Plant and Equipment in relation to the measurement model of property, plant and equipment, including its subsequent treatment.

Required: Explain to your friend the principal requirements of MFRS 116 Property, Plant and Equipment in relation to the measurement model of property, plant and equipment, including its subsequent treatment.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION 1 A. Your friend has just been appointed as a director of a company. He is puzzled as to the accounting treatment of some of the company's property, plant and equipment, which he thinks does not make sense. He said, for example, the value of a property acquired 10 years ago for RM500,000 is now carried in the statement of financial statement at a lower amount of RM400,000, when in fact the true value should have increased to reflect the current market value. Required: Explain to your friend the principal requirements of MFRS 116 Property, Plant and Equipment in relation to the measurement model of property, plant and equipment, including its subsequent treatment.
Transcribed Image Text:QUESTION 1 A. Your friend has just been appointed as a director of a company. He is puzzled as to the accounting treatment of some of the company's property, plant and equipment, which he thinks does not make sense. He said, for example, the value of a property acquired 10 years ago for RM500,000 is now carried in the statement of financial statement at a lower amount of RM400,000, when in fact the true value should have increased to reflect the current market value. Required: Explain to your friend the principal requirements of MFRS 116 Property, Plant and Equipment in relation to the measurement model of property, plant and equipment, including its subsequent treatment.
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