A machine was purchased on $1$ April $2023$ for R$250000$ payment terms were cash on purchase date of R$50000$ and non$-$current loan of R$200000$ which will be payable in equal installments of R$25000.$

At the end of the financial year $($i$.$e $31$ December $2023)$ the machine had a depreciation of R$37500$ and carrying amount of R$212500.$ The NCL had a balance of R$175000.$

However, upon reviewing AFS, you have noted that in the statement of financial position the machine measured at R$37500,$ and no loan is disclosed. There is no further disclosure in the financial statements.

Required

Compose a memorandum to the financial manager explaining, why in terms of the conceptual framework the disclosure is incorrect.