Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In its annual financial statements for the year ended 31 March 2020, Syarikat Pengangkutan Rangkaian Mesra Bhd. (SPRM), a public listed company, had identified the

In its annual financial statements for the year ended 31 March 2020, Syarikat Pengangkutan Rangkaian Mesra Bhd. (SPRM), a public listed company, had identified the following operating segments:

Segment 1 local train operations

Segment 2 inter-city train operations

Segment 3 railway constructions

The company disclosed two reportable segments. Segments 1 and 2 were aggregated into a single reportable operating segment. Operating segments 1 and 2 have been aggregated on the basis of their similar business characteristics, and the nature of their products and services. In the local train market, it is the local transport authority which awards the contract and pays SPRM for its services. Contracts are awarded following a competitive tender process, and the ticket prices paid by passengers are set by and paid to the transport authority. In the inter-city train market, ticket prices are set by SPRM and the passengers pay SPRM for the service provided.

Required:

a) Advise SPRM on how the above accounting issue should be dealt with in its financial statements for the years ending 31 March 2020.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Access For Computer Accounting

Authors: Donna Kay

19th Edition

1259741109, 9781259741104

Students also viewed these Accounting questions