Part A

White Berhad is an investment holding company. The financial year end of White Berhad

is 31 March annually. On 1 April 2019, White Berhad invested in Blue Bhd by acquiring

250,000 ordinary shares at RM7.00 per share. On the same date, White Berhad had also

purchased 100,000 ordinary shares of Green Bhd for RM900,000. For both acquisitions,

White Berhad incurred the transaction costs of RM170,000 and RM48,000 respectively.

As at 31 March 2020, the fair value of the shares in Blue Berhad and Green Berhad were

RM8.40 and RM6.50 per share, respectively.

In compliance with MFRS 9: Financial Instruments, White Berhad classifies the shares in

Blue Berhad as measured at fair value through other comprehensive income while the

shares in Green Berhad are classified as measured at fair value through profit or loss.

Required:

Determine the initial recognition and at year end of the shares in Blue Berhad and Green

Berhad in White's books for the year ended 31 March 2020. Illustrate the journal entries.

(11 marks)

Part B

Grey Berhad operates a transportation business. The financial year end is 31 December

each year. The following is the information on the cash generating units of Grey Berhad:

RM

Goodwill 50,000

Building 82,000

Office equipment 94,000

Motor vehicles 240,000

License 6,000

Monetary assets 128,000

Carrying amounts 600,000

Red Berhad (a buyer in the open market) is offering to buy the building for RM75,000. The

recoverable amount of the cash generating units is RM436,000.

Required:

In accordance with MFRS136: Impairment of Assets,

a) Justify the appropriate accounting treatment for Grey Berhad for allocating the

impairment loss for cash generating units.

(6 marks)

b) Determine the amount of impairment loss and allocate it accordingly.

(8 marks)