1a) Latitude Bhd is a debt issuer whose business is mainly concentrated in securitizing of a portfolio of underlying investments. The company finance their purchase by issuing of listed debt, limited by collateral. Since Latitude Bhd is financing their business through debt issuance, the repayment of the debt is very much dependent upon the performance of the company's underlying investments. Nevertheless, the debt-holders of the debt issued by Latitude Bhd are the ultimate bearer of the risks and enjoying rewards associated with the ownership of the underling investments. Due to the specific nature of the underlying investments, the degree of risks of individual debts may vary. Latitude Bhd does not consider its debt-holders as the primary users of the financial statements. Thus, the company does not wish to provide disclosure of the debt- holders' exposure to risks in the financial statements, distinctively from the risks faced by the company's shareholders in accordance with MFRS 7: Financial Instruments: Disclosures. The directors of Latitude Bhd have read numerous reports which discuss excessive disclosure in the annual report of companies. Accordingly, the directors were of the view that the instances discussed above should not be disclosed in the financial statements of Latitude Bhd as it would result in the annual report of the company becoming "excessive". In the most recent financial statements, Latitude Bhd's liquidity position has worsened. The company was in the high risk of breaching the loan covenant. The situation faced by Latitude Bhd has begun to raise alarms that the directors described the instance as "unsatisfactory in the internal management report. Nevertheless the views of the directors remain intact of not disclosing this instance in the company's financial statements. Discuss the directors of Latitude Bhd's views that no further information regarding the incidence above should be disclosed in the financial statements, because doing so would cause "excessive" annual report and that the information disclosed would cause confusion to the users of financial statements. Please discuss with reference to requirements and paragraphs in IFRS 7 and IFRS 9. b.) Senang Bhd expects to purchase a machine for $100,000 on 30 August 2019. The functional currency of Senang Bhd is the Ringgit Malaysia (MYR). If the dollar rate increase before the purchase take place, the company will have to pay more MYR to obtain the $100,000 that it will have to pay for the machine. In order to offset the risk of increases in the dollar rate, the managing director has proposed to use hedge accounting whereby the company may enter into a forward contract in May 2019 to purchase $100,000 for a fixed amount. Discuss the requirements and conditions for hedge accounting as prescribed under MERS 9 Financial Instruments. c) Note: MFRS 139 = LAS 39 and MFRS 9 = IFRS 9 Budiman Berhad has an equity investment that cost RM 1 million on 1 January 2015. The investment is classified as an available-for-sale investment under MFRS 139 - Financial Instruments: Recognition and Measurement. The value of the investment at each period- end is: Nilai pelaburan Akhir tempohl Period-end Investment value RM 31 Disember December 2015 950,000 31 Disember December 2016 1,030,000 31 Disember December 2017 1,080,000 In accordance with MFRS 139 - Financial Instruments: Recognition and Measurement, prepare the journal entries for the investment in Budiman Berhad's financial statements for each period from 31 December 2015 to 2017 Explain how the above treatment would differ under MFRS 9 - Financial Instruments. 1a) Latitude Bhd is a debt issuer whose business is mainly concentrated in securitizing of a portfolio of underlying investments. The company finance their purchase by issuing of listed debt, limited by collateral. Since Latitude Bhd is financing their business through debt issuance, the repayment of the debt is very much dependent upon the performance of the company's underlying investments. Nevertheless, the debt-holders of the debt issued by Latitude Bhd are the ultimate bearer of the risks and enjoying rewards associated with the ownership of the underling investments. Due to the specific nature of the underlying investments, the degree of risks of individual debts may vary. Latitude Bhd does not consider its debt-holders as the primary users of the financial statements. Thus, the company does not wish to provide disclosure of the debt- holders' exposure to risks in the financial statements, distinctively from the risks faced by the company's shareholders in accordance with MFRS 7: Financial Instruments: Disclosures. The directors of Latitude Bhd have read numerous reports which discuss excessive disclosure in the annual report of companies. Accordingly, the directors were of the view that the instances discussed above should not be disclosed in the financial statements of Latitude Bhd as it would result in the annual report of the company becoming "excessive". In the most recent financial statements, Latitude Bhd's liquidity position has worsened. The company was in the high risk of breaching the loan covenant. The situation faced by Latitude Bhd has begun to raise alarms that the directors described the instance as "unsatisfactory in the internal management report. Nevertheless the views of the directors remain intact of not disclosing this instance in the company's financial statements. Discuss the directors of Latitude Bhd's views that no further information regarding the incidence above should be disclosed in the financial statements, because doing so would cause "excessive" annual report and that the information disclosed would cause confusion to the users of financial statements. Please discuss with reference to requirements and paragraphs in IFRS 7 and IFRS 9. b.) Senang Bhd expects to purchase a machine for $100,000 on 30 August 2019. The functional currency of Senang Bhd is the Ringgit Malaysia (MYR). If the dollar rate increase before the purchase take place, the company will have to pay more MYR to obtain the $100,000 that it will have to pay for the machine. In order to offset the risk of increases in the dollar rate, the managing director has proposed to use hedge accounting whereby the company may enter into a forward contract in May 2019 to purchase $100,000 for a fixed amount. Discuss the requirements and conditions for hedge accounting as prescribed under MERS 9 Financial Instruments. c) Note: MFRS 139 = LAS 39 and MFRS 9 = IFRS 9 Budiman Berhad has an equity investment that cost RM 1 million on 1 January 2015. The investment is classified as an available-for-sale investment under MFRS 139 - Financial Instruments: Recognition and Measurement. The value of the investment at each period- end is: Nilai pelaburan Akhir tempohl Period-end Investment value RM 31 Disember December 2015 950,000 31 Disember December 2016 1,030,000 31 Disember December 2017 1,080,000 In accordance with MFRS 139 - Financial Instruments: Recognition and Measurement, prepare the journal entries for the investment in Budiman Berhad's financial statements for each period from 31 December 2015 to 2017 Explain how the above treatment would differ under MFRS 9 - Financial Instruments