HHT Bhd has a portfolio of diversified investments. In 2020, the company made investments in two financial assets: On 1 January 2020, HHT Bhd acquired 1,000,000 shares of MSG Bhd for RM0.55 per share and incurred a transaction cost of RM10,000. The shares were classified as fair-value-through profit and loss (FVTPL). At the financial year-end of 31 December 2020, the market value of the investment increased to RM600,000. On 1 January 2021, HHT Bhd sold the investment for RM625,000. 1. 2. On 1 July 2020, HHT Bhd acquired another 1,000,000 shares for its second investment from MSG Bhd for RMO.775 per share. HHT Bhd has made an irrevocable election and incurred RM12,000 for the brokerage fees. At the end of the financial year-end 31 December 2020, the market value of the investment increased to RM790,000. On 1 January 2021, the investment was also sold for RM915.000. Required: a. Determine the classification of the financial assets above as stipulated in MFRS 9 Financial Instruments.
HHT Bhd has a portfolio of diversified investments. In 2020, the company made investments in two financial assets: On 1 January 2020, HHT Bhd acquired 1,000,000 shares of MSG Bhd for RM0.55 per share and incurred a transaction cost of RM10,000. The shares were classified as fair-value-through profit and loss (FVTPL). At the financial year-end of 31 December 2020, the market value of the investment increased to RM600,000. On 1 January 2021, HHT Bhd sold the investment for RM625,000. 1. 2. On 1 July 2020, HHT Bhd acquired another 1,000,000 shares for its second investment from MSG Bhd for RMO.775 per share. HHT Bhd has made an irrevocable election and incurred RM12,000 for the brokerage fees. At the end of the financial year-end 31 December 2020, the market value of the investment increased to RM790,000. On 1 January 2021, the investment was also sold for RM915.000. Required: a. Determine the classification of the financial assets above as stipulated in MFRS 9 Financial Instruments.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 9P
Related questions
Question
Question 1 (a)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning