Group Assignment 2

In year 2002, Aerospace Bhd purchased property as below.

Freehold land RM 8,000,000
Building RM 16,000,000
The estimated useful life of the building is 40 years.
The land was revalued to RM 10,000,000 and building to RM 18,000,000 in year ended 2004.
Geographical and market circumstances in 2006 had rendered the property to be less
valuable. The net sales value of the land is RM 6,000,000 and building is RM 12,000,000 as
at 31 December 2006.
Favourable regional economy in 2008 had incurred business activity in the property’s vicinity
to spiral upwards. The estimated net sales value as at 31 December 2008 are as follows:
Freehold land RM 12,000,000
Building RM 14,000,000
Assumptions:
1. There is no change in the estimated useful life of the building throughout the periods
under review
2. Value in use for the property is not determinable
Required:
a. Prepare the journal entries to record the revaluation during the year ended 31
December 2004
b. Show an extract of the Statement of Financial Position as at 31 December 2004
c. Determine the impairment loss (if any) during the year ended 31 December 2006
d. Show an extract of the Statement of Profit or Loss and the Statement of Financial
Position as at 31 December 2006
e. Determine the reversal of impairment loss (if any) for the year ended 31 December
2008
f. Show an extract of the Statement of Profit or Loss and the Statement of Financial
Position as at 31 December 2008