A. The objective of the MFRS 136 Impairment of assets is to prescribe the procedures that an entity applies to ensure that its assets are not impaired. Required: Explain what is mcant by an impairment review. Your answer should include reference to assets that may form a cash generating unit. Note: You are NOT required to describe the indicators of impairment or how losses are allocated against assets. (6 marks) B. The draft financial statements of Raya Bhd for the year to 31 December 2016 are being prepared and the accountant has requested your advice on dealing the following issues: a) Raya Bhd owns a retail business which has suffered badly during the recession. Raya Bhd treats this business as a separate cash generating unit. The fair value of the cash generating unit is RM1.2 million. The carrying amounts of the assets comprising the retail business are: RM'000 900 300 Building Plant and equipment Inventory Other current assets Goodwill 70 130 40 An impairment review has been carried out as at 31 December 2016. The value in use of the assets is RM1.3 million. Required: Restate the carrying amounts of the assets of the retail business after accounting for the result of the impairment review. Discuss the relevant accounting treatment under MFRS136 to cash generating unit. (9 marks) b) Raya Bhd has an administration building which it no longer needs following a delayering exercise. On 1 July 2016, Raya Bhd entered into an agreement to let the building out to another company. The building cost RM600,000 on 1 January 2007 and is being depreciated over 50 years. Raya Bhd applies the fair values model under MFRS140 and the fair value of the building was judged to be RMS00,000 on 1 July 2016. This valuation had not changed at 31 December 2016. Another building has been let out for a number of years. It had a fair value of RMS50,000 at 31 December 2015 and RM740,000 at 31 December 2016. Required: Explain how these two buildings should be accounted for in the financial statements of Raya Bhd for the year ended 2016 and quantify the amounts involved. (10 marks)