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(b) AZ Bhd is a company involved in manufacturing of cookies and snacks. The following events occurred during the year ended 31 December 2020
(b) AZ Bhd is a company involved in manufacturing of cookies and snacks. The following events occurred during the year ended 31 December 2020 for AZ Bhd. Required: For each of the events below, critically discuss whether provisions should be recognised in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets. i. AZBhd is currently expanding its business globally into foreign markets. In July 2020, the factory operations in the foreign country have seriously polluted the environment and the probable clean-up costs has been estimated at RM8,500,000. Though there is no environmental law in the foreign country, the company still claims to be a socially and environmentally responsible corporate citizen. (4 marks) ii. AZ Bhd's board of directors decided to restructure its company in one year's time due to adverse economic condition. The restructuring involves closing its branches in Tanjung Bidara and Ringlet. Due to this, 20% of the staff will be made redundant. AZ Bhd has not come up with the decision as to which employees will be affected. However, AZ Bhd has made an announcement that it is going to restructure.
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