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As the chief accountant of DESA BHD, you need to provide the explanation of how you are going to account for these events and the

As the chief accountant of DESA BHD, you need to provide the explanation of how you are going to account for these events and the required disclosure in the financial statement in accordance to FRS 137. DESA BHD is listed company engaged in providing brokerage services in Kuala Lumpur and Bangkok. The External Auditor has raised several issues that need to be addressed by DESA BHD.

Q: DESA BHD has taken loan from a local bank of RM800,000 using its investment in shares as collateral. Due to heavy losses, DESA BHD has made a default in payment of interest and principal repayment. The bank has transferred the shares and have filed suit for recovery of the balance amount. DESA has not derecognized the investments and loan stands at the original value of RM800,000.

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