1. On 1 January 2020, Hannah Berhad supplied goods to Secil Berhad for an agreed sum of RM600,000. This amount becomes payable on 31 December 2022. Secil Berhad could have bought the goods for cash of RM450,000 on 1 January 2020. The discount rate that would be reflected in a separate financing arrangement between Hannah Berhad and Secil Berhad at 1 January 2020 is 10%.

In accordance with IFRS 15, Revenue from Contracts with Customers what amounts for revenue and interest income should Hannah Berhad record in profit or loss relating to this transaction for the year ended 31 December 2020?

2. Selatan Berhad, a manufacturing company, sold a property with a carrying amount of RM4.5 million for RM5 million to Utara Berhad on 1 January 20X4 (the current market value is RM5 million). Selatan Berhad retains the right to occupy the property and maintain the building and has a forward option to repurchase the property in two years time for RM6 million. It is expected that the market value of the property will be RM6 million in two years time. The annual rate for 20% over two years is 9.5%.

In accordance with IFRS 15, Revenue from Contracts with Customers what should be recognised in the financial statements relating to this transaction for the year ended 31 December 20X4?

3. An entity purchased a new item of machinery for RM320,000 on 1 January 20X7. It will depreciate this machinery at 25% pa on the reducing balance basis, as this most closely resembles the pattern of benefits receivable from the asset. Also, on 1 January 20X7, a government grant of RM160,000 was received to help finance this machinery.

Show the amounts to be recognised in profit or loss for the year ended 31 December 20X7 if the entity uses IAS 20s deferred income method for government grants.

4. Molto Berhad purchased an item of machinery for RM500,000 on 1 April 20X5 at which time it received a government grant of 20% of the cost of the machinery. The machinery is being depreciated at 25% pa on the reducing balance basis.

Show how the machinery and the grant should be presented in the financial statements for the year ended 31 March 20X7 using the deferred income method