BBFA 2024 ADVANCED FINANCIAL ACCOUNTING Question 3 Factor Berhad (Factor) prepares its financial statements to 30 November each year. The following events had occurred during the year ended 30 November 2021: (1) Factor had entered into a factoring agreement with MBB Factoring (M) Sdn. Bhd. (MBB) on 1 October 2021. As per the agreement, Factor will sell trade receivables with a carrying amount of RM9 million to MBB for RM8.5 million and any unpaid receivables shall be returned to Factor for collection after six months. MBB will also charge a fee of 2.5% on any uncollected balances at the end of each month. (ii) On 1 January 2021, Factor purchased 1 million shares in Quintus Sdn. Bhd. (Quintus), a key supplier of Factor. Factor has no intention to sell the shares. The purchase cost per share was RM5 with total direct costs of purchasing of RM50,000. On 1 October 2021, Quintus paid a dividend of 20 sen per share. On 30 November 2021, the fair value of a share in Quintus was RM5.50. Required: Explain and calculate the amounts that should be recognised in the financial statements of Factor Berhad for the year ended 30 November 2021 based on the above two events in accordance with IFRS 9 Financial Instruments. BBFA 2024 ADVANCED FINANCIAL ACCOUNTING Question 3 Factor Berhad (Factor) prepares its financial statements to 30 November each year. The following events had occurred during the year ended 30 November 2021: (1) Factor had entered into a factoring agreement with MBB Factoring (M) Sdn. Bhd. (MBB) on 1 October 2021. As per the agreement, Factor will sell trade receivables with a carrying amount of RM9 million to MBB for RM8.5 million and any unpaid receivables shall be returned to Factor for collection after six months. MBB will also charge a fee of 2.5% on any uncollected balances at the end of each month. (ii) On 1 January 2021, Factor purchased 1 million shares in Quintus Sdn. Bhd. (Quintus), a key supplier of Factor. Factor has no intention to sell the shares. The purchase cost per share was RM5 with total direct costs of purchasing of RM50,000. On 1 October 2021, Quintus paid a dividend of 20 sen per share. On 30 November 2021, the fair value of a share in Quintus was RM5.50. Required: Explain and calculate the amounts that should be recognised in the financial statements of Factor Berhad for the year ended 30 November 2021 based on the above two events in accordance with IFRS 9 Financial Instruments