Property, plant and equipment exemptions and MPERS

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. What are the exemptions in Paragraph 35.10 of MPERS that relates to measuring assets (which includes PPE, investment properties and intangible assets) at the date of transition?

  2. Section 35.10 of MPERS several exemptions in preparing its first financial statements that conform to MPERS. Which of the following exemptions refers to paragraph 35.10(c)?

  3. If an entity measures its PPE using a cost model under the existing PERS, it can elect to use fair value as the deemed cost. If an entity uses fair value (upon performing a valuation) as deemed cost for any items, how is the transition to MPERS treated?

  4. A first-time adopter may elect to use a previous revaluation (determined under PERS) of an item of property, plant and equipment, an investment property, or an intangible asset at, or before, the date of transition to MPERS as its deemed cost at the revaluation date. Which part of MPERS provides for this transitional treatment?

  5. There are concerns relating to the revaluation reserve arising from previously revalued property, plant and equipment under PERS that are brought forward on the date of transition to MPERS as the deemed cost. As Section 35 of the MPERS does not provide any explicit prescription on how to deal with this revaluation reserve, how would preparers of MPERS compliant financial statements deal with the revaluation reserve brought forward?

  6. What was one of the major amendments put forth in the 2015 Amendments to the MPERS issued by MASB on 28 October 2015?

  7. If an entity measures its PPE using a cost model under the existing PERS, it can elect to use fair value as the deemed cost under the transitional exemption in paragraph 35.10(c). What would be the treatment if the entity did not elect to use the exemption in paragraph 35.10(c)?

  8. Financial statements for the year ended 31 December 2015 were presented in accordance with PERS. In accordance with PERS, the entity measured its property, plant and equipment at revalued amounts with revaluation increases included in revaluation reserve. On the date of transition to MPERS (i.e. at 1 January 2015), the entity elects to measure its property, plant and equipment at its revalued amount being the deemed cost by availing the relevant exemption given in Section 35. How should the entity account for this transition?

  9. Under the transition exemption of Malaysian Financial Reporting Standards (MFRS), how would a brought forward asset revaluation reserve from the PERS framework be treated upon transition to MPERS

  10. If an entity did not elect to use the exemption in paragraph 35.10(d), how would it account for its property, plant and equipment currently stated at revaluation under PERS when transiting to MPERS?