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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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7
![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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f37e1d7-bf93-492a-b47b-5f12dd739490%2F24d6ae24-5cca-4f75-a047-b00fb7fa00e2%2Fqywy4rd_processed.jpeg&w=3840&q=75)
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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