IFRS OR MFRS

Question 3(a) Pero3 is a company based in Sungai Buluh, Selangor that manufactures motor vehicles and exports the finished vehicles to Asian Region. Pero3 manufactures two models; the most popular model is a four-door sedan, named MekVi, and the other is a less common, sports utility vehicle (SUV) named ViRa. Pero3 has a contract with CityTrans to ship its products to the region. CityTrans has a fleet of 10 multi-use shipping vessels, each with capacity for 2,000 vehicles. The terms of the shipping contracts are as follows: Sedan, MEkVi contract terms: - The term is five vears -MV Tenggara, a ship in CityTrns, fleet, s dedicated to shipping Pero3's Sedans for the term of the contract. Pero3 determines (1) which Asian ports to receive shipments, and (2) the order in which deliveries are made to the ports; Pero3 instructs CityTrans accordingly Pero3 has the option to send the ship below capacity. If the ship is below capacity CityTrans cannot use the excess capacity to ship products of its other customers. - - Sport Utility Vehicle, ViRa contract terms: - The term is five vears - CityTrans is required to deliver shipments of ViRa cars within five weeks of notification from Pero3 that an order of the SUV is ready for shipping. CityTrans may choose any ship from its fleet to complete the request. Pero3 may provide 250 to 2,000 SUV cars in a single request; however, shipping requests of the SUV, ViRa, generally do not exceed 500 vehicles in a single request because of the - - lower production volume and long er manufacturing time of the SUV - CityTrans has the option to use excess capacity to ship products of its other After notification from Pero3 that the SUV, ViRa cars are ready to ship, City Trans determines when within the five-week period to ship the cars, as well as the shipping route. Pero3's CFO understands that the new leasing standard has certain provisions that may affect how the company treats - contracts of this nature. Required: (i) Determine whether each of Pero3's contracts with CityTrans for MekVi Sedan and (5 marks) (i) Determine whether each contract conveys the right to control the use of the identified (5 marks) (iii) Leases may also involve assets such as land and building, other than the motor vehicles ViRa SUV cars contain an identified asset. asset to the lessee. as above. Describe the lease arrangement involving land and building Question 3(a) Pero3 is a company based in Sungai Buluh, Selangor that manufactures motor vehicles and exports the finished vehicles to Asian Region. Pero3 manufactures two models; the most popular model is a four-door sedan, named MekVi, and the other is a less common, sports utility vehicle (SUV) named ViRa. Pero3 has a contract with CityTrans to ship its products to the region. CityTrans has a fleet of 10 multi-use shipping vessels, each with capacity for 2,000 vehicles. The terms of the shipping contracts are as follows: Sedan, MEkVi contract terms: - The term is five vears -MV Tenggara, a ship in CityTrns, fleet, s dedicated to shipping Pero3's Sedans for the term of the contract. Pero3 determines (1) which Asian ports to receive shipments, and (2) the order in which deliveries are made to the ports; Pero3 instructs CityTrans accordingly Pero3 has the option to send the ship below capacity. If the ship is below capacity CityTrans cannot use the excess capacity to ship products of its other customers. - - Sport Utility Vehicle, ViRa contract terms: - The term is five vears - CityTrans is required to deliver shipments of ViRa cars within five weeks of notification from Pero3 that an order of the SUV is ready for shipping. CityTrans may choose any ship from its fleet to complete the request. Pero3 may provide 250 to 2,000 SUV cars in a single request; however, shipping requests of the SUV, ViRa, generally do not exceed 500 vehicles in a single request because of the - - lower production volume and long er manufacturing time of the SUV - CityTrans has the option to use excess capacity to ship products of its other After notification from Pero3 that the SUV, ViRa cars are ready to ship, City Trans determines when within the five-week period to ship the cars, as well as the shipping route. Pero3's CFO understands that the new leasing standard has certain provisions that may affect how the company treats - contracts of this nature. Required: (i) Determine whether each of Pero3's contracts with CityTrans for MekVi Sedan and (5 marks) (i) Determine whether each contract conveys the right to control the use of the identified (5 marks) (iii) Leases may also involve assets such as land and building, other than the motor vehicles ViRa SUV cars contain an identified asset. asset to the lessee. as above. Describe the lease arrangement involving land and building