Discuss the accounting treatment and disclosure

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Problem 1: Discuss the accounting treatment and disclosure for each of the following independent events and transactions. Assume that the tax rate is 25% where applicable.

The year ends on 31 December.

a) An entity was depreciating its plant on a straight line basis. In year x3, it changed its depreciation method to units of production.

b) The company acquired a large asset for RM12 million. Effective year x6, the accounting standard requires the cost of the asset to be allocated to its various components and depreciated accordingly. The company has lost the records and is unable to assign the costs to the various components.

c) The entity has not depreciated its hotel building as it maintains it very well. The hotel building was constructed at a cost of RM100 million in x1 and its scrap value was estimated at RM90 million.

Reference no: EM132768524

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