QUESTION 2

On 30 June 2018, HTL Bhd classifies a business segment as a disposal group for sale. The carrying amount and the impairment loss recognised are as follows:

	Before RM'million	Impairment RM'million	After RM'million
Goodwill allocated	50	950	-
Property, at revalued amount	80	(13.3)	66.7
Plant and equipment, at cost	100	(16.7)	83.3
AFS investment at fait value	40	-	40
Other monetary assets	30	-	30
Net amount	300	(80)	220

On 31 December 2018, the fair value of the AFS investment increase to RM45m. On this date, HTL Bhd signs an agreement with a third party to dispose of the business for a consideration of RM240m. Costs to sell are estimated at 3% of the consideration.

Required:

Compute the reversal of impairment loss that shall be recognized on 31 December 2018.

QUESTION 3 (continue from Question 2)

Assume the same case in Question no 2 (HTL Bhd). The sale of the business segment is completed on 31 March 2019. HTL Bhd receives dividend income of RM2m form AFS investment and the fair value of the investment at 31 March 2019 is RM44m. Assume that the original cost of the AFS investment is EM40m and the balance in the fair value reserve attributable to this investment at 31 March 2019 is RM4m.

HTL Bhd continue to operate the segment until 31 March 2019 and the fair value of the monetary assets at 31 March 2019 is RM32m. The net proceeds (net of costs to sell) from the disposal of the business segment amount to RM232.7m.

Required:

a. Remeasure the disposal as at 31 March 2019;

b. calculate the gain or loss on derecognition on the date;

c. show the journal entry for the derecognition