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What are the questions on MPERS that’s bugging your mind ?

They say Failure is the Mother of Success

I say, Question is the Mother of Answer ...

One of my fans, Martin Yong don't agree with me

He sayFailure is mother of success. Question is father of success. Answer is child of success.

I agree with Martin.

If you ask the right expert, then his/her Answer is child of success.

If you ask the wrong expert, then his/her Answer is the child of failure

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61 Comments

  • Jacy Cheng

    Reply Reply April 18, 2017

    A 3 storeys shop, the 3rd floor is renting out to others, while 1st and 2nd floor are for my business use. Do I need to classify 3rd floor as investment property?

  • Jacy Cheng

    Reply Reply April 18, 2017

    For adjustments need to be done on transition date, ie my company is Dec’16 year end, meaning my transition date is on 1.1.2015, and I need to do adjustment on 1.1.2015. However, I have closed my account for 2015. Then, how should I insert the adjustment in my book?

  • Steven

    Reply Reply April 18, 2017

    I was told that the ALL borrowing cost (eg borrowing interest) needs to be charged out to expenses. But I also overheard that those buildings that already completed before the transition date (1/1/2015) will remain in the PPE cost. Pls help on this issue.

  • Jacy Cheng

    Reply Reply April 18, 2017

    I have a company with Sept’16 year end. If I want to do one off revaluation, when I should do the revaluation?

  • Evanna Miss8

    Reply Reply April 18, 2017

    Post on behalf of Joyce

    For these presentation, is it done mostly by auditors? management reports have to present according to MPERS also?

  • Adeline Cheong

    Reply Reply April 18, 2017

    At the date of transition to MPERS, the related revaluation reserve attributable to the previous revaluation has been transferred to retained profits. So, I would like to ask whether any dividend can be declared from the restated retained profits. Hope to hear from you soon. Thank you.

  • Evanna Miss8

    Reply Reply April 18, 2017

    Posted on behalf of viv

    What are the possible reasons for undue cost and effort that your firm use to disclose in the notes to FS

  • Yuh Yun Eng

    Reply Reply April 18, 2017

    Hi, the standard say when obtaining FV result undue cost then allow to apply cost model. How to determine undue cost?

  • shan

    Reply Reply April 18, 2017

    According to the new MPERS, we need to use reporting currency (forex ie USD) for our reporting while using the MYR currency for auditors. Does it mean , both GL must be key in line by line with 2 type of currency ? Or another word, there should have 2 report which one is in USD and another in MYR. Can i show only simplified report for the USD where there is only one entry for the month using monthly translation rate?

  • Evanna Miss8

    Reply Reply April 18, 2017

    Do we need to get a valuation to segregate the cost of land and building into land RMxxx and building RMxxx? as previously these were categorised as one under “land and building”?

  • Evanna Miss8

    Reply Reply April 18, 2017

    How can we split the value for land and building?

  • Evanna Miss8

    Reply Reply April 18, 2017

    A practical question, can share the rates and names of valuer who do desk valuation?

  • Penny

    Reply Reply April 18, 2017

    1) Netting off in between account payable and receivable is no longer available, is it true? Is yes, do this applicable as well as to the amount due to and from director account?

    2) For those transaction required to be discounted to present value, the effective interest rate used require to be based bank base rate, upon what benchmark for us to decide on which bank interest rate to be referring to?

    3) Non statutory auditor remuneration to be disclose in the report including all non engagement service by the audit firm?

    4) How to define a key management personnel? For instance, director wife who didnt sit on board but in fact she control the whole company operation, is she
    a key management personnel? If she entitle salary as a normal staff, shall her salary need to be disclose?

    5) Did computer hardware and software separation of account is required since software is now consider an intangible asset?

  • THEN PEI SZE

    Reply Reply April 18, 2017

    A practical question, can share the rates and names of valuer who do desk valuation?

  • shan

    Reply Reply April 18, 2017

    1)if the company have both myr and usd sales income .. how do we determine which reporting currency did we fall under mpers??

    2) how to said as control over the company ??? since the share is only less than 50%?

  • Joyce Liaw Mei Foong

    Reply Reply April 18, 2017

    1. How do you say that owning 20% of another company having control over that company?

    2. Since software is classified under intangible assets, if there any minimum amount? because some software only cost RM50 – can we expense it off? How about subscription costs on the software – especially maintenance costs for gst accounting software – intangible asset or expenses?

    3. Do we need to present the management reports to auditors in MPERS presentation or we just merely doing fair value adjustment and classification adjustment?

  • LEE SIK NGEE

    Reply Reply April 19, 2017

    1. How to calculate the impairment loss for investment in subsidiary (unquoted share).

  • Chong Yuk Ken

    Reply Reply April 21, 2017

    Do we need to charge depreciation for the investment property classified? The investment property is leasehold building.

  • Ling Ming Leh

    Reply Reply April 25, 2017

    For amount due from/(to) director, do the Company needs to account for amortised cost, fair value or present value since the coompany policies states that the loans are unseured, interest free and repayable upon demand. However, part or all the director’s account last year balance remain the same & the same pattern is expected to remain the same over next 12 months?

  • Chong Yuk Ken

    Reply Reply April 25, 2017

    If a company had performed revaluation for a property due to the bank facility requirement in the year of 2013 and all the while the amount reported was the purchase cost in the pufinancial statement. For MPERS, do I need to revalue using the revaluation report amount? Does the company need to revalue the property again for every five years?

  • Steven

    Reply Reply April 25, 2017

    In 2015, we used hire purchase payable at the face of balance sheet. In 2016 (under MPERS), do we remain hire purchase payable at the face of balance sheet? OR will it replaced by the “finance lease payable”? As I believe that hire purchase will not fulfilled the definition of finance lease, right?

  • Tan Sook Cheng

    Reply Reply April 26, 2017

    1. Can you please explain on the transition PERS to MPERS section because i not clear how to implement it. If can, please provide together with case example.

    2. In year 2016, there are some trade debtors or creditor which carry forward and no movement more than 3 years in the aging report. How to treat these accounts to financial statement.

    3. For hire purchase and term loan (For existing and new), do we need to present at present value in financial year?

    4. For the inventories work in progress especially for oil palm plant, how should we present the value? Is it present in fair value.

  • HO OOI FONG

    Reply Reply April 26, 2017

    Two questions on Investment property (IP):

    Per your presentation, the IP can be stated at fair value or cost.

    1) If stated at fair value : Is it mandatory to have a professional valuer to support the fair value? or we can claim it as Director’s best estimate?

    2) If stated at cost : it has to be presented under the PPE and subject to depreciation and impairment? or can be presented on the face of Balance Sheet as IP, at cost and not subject to depreciation but subject to impairment test?

    TQ

  • Jason hew

    Reply Reply April 27, 2017

    For investment property
    Can year one use fair value model, then year two use cost model or visa versa?

  • Jack

    Reply Reply April 27, 2017

    1. For investment properties presented at PPE, do we need disclosure land and building also?

    2. For amount due to related company, holding and subsidiaries, do we need to present at present value in financial year?

  • Jacy Cheng

    Reply Reply April 27, 2017

    For amount owing to / by director, do we need to calculate for net present value? How can we do if we do not want to calculate for net present value?

  • Jacy Cheng

    Reply Reply April 27, 2017

    Borrowing cost that capitalised 10 years ago, and we are not able to trace back the record because we are the new auditor for that company, and the company couldn’t identify the borrowing cost. How can we do for this kind of situation?

  • L H Lim

    Reply Reply April 27, 2017

    I have the following question to seek for your opinion:

    (a) Investment properties previously presented under PPE (PERS)

    The Co is an investment holding owning landed properties (IP) formerly presented under PPE (PERS). In the MPERS regime if the Co intend to account IP using the cost model (PPE).

    Question:
    For the year ended 31.12.2016, can the Co still maintain the old presentation under PPE and by way of note explaining that the PPE are actually IP at cost? Or the IP at cost must be shown on the face of SOFP under a different line and transfer be made be shown from PPE to the IP at cost and a reconciliation of equity be presented.

    (b) Biological assets – oil palm crop previously presented under PPE (PERS)

    Biological assets formerly presented under PPE now oblige to present the land as PPE and development expenditure as biological assets – cost model.

    Question:
    Is it correct to transfer the development expenditure to line item under biological asset at cost and a reconciliation of equity be presented to reflet on this transfer?

    (c) Borrowing costs – formerly capitalization under PERS

    MPERS desallowed for capitalsation of borrowing costs.

    Question:
    Is it correct to derecognised the interest capitalised from PPE and a reconciliation of equity be presented to reflect on this change?

  • Cheng Siow Mei

    Reply Reply April 27, 2017

    The Mazar report that Sharon show just now, the item no. 5 “Property, Plant and Equipment” pg 31, in Mazar Report they use “Carrying Amount” but in Tan Liong Tong’s book, they are using “Net book value”. Can I know which to use? Or both can be used?

  • Tan Sook Cheng

    Reply Reply April 27, 2017

    1. Previously before MPERS implement, company have net book value of RM1 of property, plant and equipment,so do i still need to do impairment loss for these PPE’s net book value?

  • dato dr zulkepli

    Reply Reply April 27, 2017

    1. Is there a sample of MPERS presentation in Malay version?

    2. What is the valid documentation to prove fair value for PPE or IP?

    3. Should we revalue all the PPE again to get current fair value in order to comply MPERS?

  • Hew

    Reply Reply April 27, 2017

    According to MPERS, a PPE which is initially recognised in Cost should be recognised in Fair Value in subsequent valuation. Can we recognise the PPE back to cost if client disagree with the fair valuation?

  • Evanna Miss8

    Reply Reply April 27, 2017

    CHIA … if freehold land n building did not depreciate last time, if depreciate now, is this consider error? to restate previous year figure?

  • LEE SIK NGEE

    Reply Reply April 27, 2017

    If previously, software included under PPE and now we reclassified as intangible asset? Is it classified at cost or net book value while we do the transfer.

  • Adeline

    Reply Reply April 27, 2017

    Is segregation of tangible assets (hardware) and intangible assets (software) a mandatory?

  • Evanna Miss8

    Reply Reply April 27, 2017

    ANSON … If the company use frs in year 2015. For 2016 can we adopt mpers o myst comply with mfrs?

  • Chong Yuk Ken

    Reply Reply April 29, 2017

    Hi, If a property is classified as inventories for the past ten years and the properties are rented out for rental income. The company used to be a developer and remaining unsold units classified as inventories. Can I just remain it as inventories or can classify it to PPE or investment properties?

  • Sin

    Reply Reply May 2, 2017

    IF MY PPE FAIR VALUE BEEN INCREASE AND MY RETAINED EARNING WILL BE INCREASED
    CAN I TAKE OUT THE DIVIDENT FROM THE RE.

    THANK YOU

  • LIEW GIUN FUNG

    Reply Reply May 4, 2017

    If previously i using frs report, for this year may i using frs or must apply MFRS or MPRES? Thanks

  • Eiffelmay

    Reply Reply May 8, 2017

    Can frs change to mfrs
    The borrowing cost to be expense out is it current year or as you say the previous 7 years???

  • Tan Sook Cheng

    Reply Reply May 8, 2017

    1. During the year,company was sold a motor vehicle amounting to RM 106,000/- (Included interest 4%) and give the credit term 24 month with interest charges 4%. In the balance sheet, the other receivable need record as non-current liabilities and presented in simple present value.

    2. How to determine the IRR?

  • Danny

    Reply Reply May 8, 2017

    Hi there,

    My company has shopt lot recorded as Costs (RM500K) for FY2013-FY2015 (year end is Dec 31) under PERS.

    A valuation by valuer has been performed on 31 Dec 2016, and the market value is RM800k. Can I used this as deemed cost to show the costs of my shop lot as MPERS on 1 Jan 2015 and 31 Dec 2015 a& 2016?

    Thanks.

  • Leh Hui Min

    Reply Reply May 11, 2017

    Hi Ms Sharon,

    For investment properties,

    How to split the Land and Building cost of:

    1. freehold 3 storey shopoffice (wholly owned)
    2. freehold 1 unit of a highrise apartment
    3. LEASEHOLD 3 storey shopoffice say with 55 years remaining
    4. LEASEHOLD 1 unit of a highrise apartment

    For item 3 and 4, how is depreciation to be calculated?

    For simplicity assume cost base method

    Thank you and best regards.

  • Steven

    Reply Reply May 12, 2017

    If in PERS, freeland land and building for rental was capitalised under PPE (say, freehold cost is RM100K, building cost is RM50K @ 2% = NBV 135K represent RM100K + RM35K).

    When come to MPERS, we transferred to IP at cost.

    My question is:
    a)The carrying amount (NBV) of RM135K will be treated at cost? And depreciated RM135K @ 2%? OR only depreciate 2% on the 35K (building cost)and the freehold land remain at RM100K?

    b) I understand that we have a choice of remain the IP (at cost model) inside PPE on the face of balance sheet, am I right? If I do that then I need disclose it to the note to account under PPE (eg. F&F, Office equipment, Investment properties), right?

    What is your firm practice? Is it easy to remain those IP inside the PPE on the face of balance sheet as this will no need to reinstate the 2015 presentation, right?

    If I transfer from PPE to IP at cost on the face of balance sheet, I need to reclass the 2015 presentation, right?

  • Steven

    Reply Reply May 15, 2017

    Question for oil palm for agriculture industry.

    Example: Company with a turnover of RM1m only

    Under PERS, the accounting policy for replanting expenditure is charged to income statement in the year of replanting. Under MPERS, can we still doing that? I read through the Tan Liong Tong’s book, it says that expenditure incurred after maturity and upon commencement of harvesting shall charge to P&L include all subsequent annual maintenance cost (include fertilisers). But it further say that, applying the cost model method also treats replanting cost as a capital expenditure as replanting has the effect of extending the useful lives of the plant into another productive cycle.
    Can you share what is the best practice for a annual turnover of only RM1. And further to add in is, so far in this company, they never has capitalised replanting cost as biological assets before.

  • Mei sim

    Reply Reply May 17, 2017

    Dear sir

    May I know in 2017
    Can mfrs chg to mpers

    Thank

  • Steven

    Reply Reply May 20, 2017

    Refer to No. 8 question from the Sharon’s reply on the excel.

    If in PERS, freeland land and building for rental was capitalised under PPE (say, freehold cost is RM100K, building cost is RM50K @ 2% = NBV 135K represent RM100K + RM35K).

    When come to MPERS, we transferred to IP at cost.

    My question is:
    a)The carrying amount (NBV) of RM135K will be treated at cost? And depreciated RM135K @ 2%? OR only depreciate 2% on the 35K (building cost)and the freehold land remain at RM100K?

    Answered from sharon: Continue depreciate at 2%. So the 2% is RM35K (NBV) or the RM50K for the orignal building cost?

    Also,need further clarification:

    In PERS, if a freehold land & building are never calculated the depreciation on building portion. If it transfer to IP at cost on the transition date (ie.e 1/1/2015), do I need to calculate the building depreciation portion for 2015 (this will affect the retained earnings of 2015? OR just only 2016 depreciation on building cost? The prospectively is from 2015 or 2016?

  • Steven

    Reply Reply May 20, 2017

    Refer to No. 9 question from the Sharon’s reply on the excel.

    Answered fron Sharon: Under cost model, replanting cost may be capitalised and amortised it. So, you are using may means can I choose not to capitalise it and direct charge out to expenses.

    Pls refer to my question, as Tan Liong Tiong said it can be charges out as long as it starts harvesting. But it also mentioned that it needs to be capitalised as it has extend the life of the oil palm.

  • Patrck

    Reply Reply May 22, 2017

    (A) if a “dormant” sdn bhd (Called Dormant sdn bhd with 100 ord shares) (i.e. no business activities except holding 50% of shares in an unquoted company called Unquoted sdn bhd (Unquoted S/B is active and has paid dividend to Dormant s/b. Ques 1 with divi received as the only income..does Dormant S/B consider itself as dormant or investment company and not dormant? (in its principal activity) Ques 2. does the dividend received (single tier)by Dormant S/B consider as “revenue” or “other income” in the dormant s/b comprehensive income statement?.

    (B)say Mr. SH (who is a 60% share holder and Director of Dormant SB AND Mr. SH is also a Director of Unquoted SB) in Dormant ac stat ac, under Directors interest.. am I correct to say that under “direct interest” is 60 shares, and “Deemed interest” is zero, bcos we are not preparing Unquoted SB ac.

  • Patrck

    Reply Reply May 22, 2017

    if the directors of any sdn bhd feels that it is costly to obtain fair values of all its PPEs (include land and building, equipment and unquoted investement), how should we state in the stats ac …under undue cost and effort? in where.. accounting policy or directors report?

  • Joyce

    Reply Reply May 23, 2017

    Hi Sharon,

    These are few questions need clarification :

    1. When reclassify software to intangible asset means Cost Less Accumulated Depreciation figure? This adjustment is for 1/1/2015 (assuming my year end is 31 Dec 2016), correct? Do we depreciate it further for 2016?

    2. Is there any adjustment need to be done related to Hire purchase of motor vehicle in the balance sheet?

    Thanks

  • A M Lee

    Reply Reply June 3, 2017

    ” We shall not offset asset, and liabilities or income and expenses unless required or permitted by section 2.52″ so, what about can we net off rental income with rental expenses if the source are the same ? for example, Company A rented the premises from landlord and sub let to sub tenant.can we net it off and show as expenses in Company A’s book ?

  • A M Lee

    Reply Reply June 3, 2017

    Is it acceptable to use 1/3 of the total purchase cost as land cost and 2/3 as building cost without having valuer report(if adopting cost model)

  • Evanna Miss8

    Reply Reply June 8, 2017

    Hi Sharon,

    I would like to ask you whether with MPERS now, is the below statement correct ?

    CA2016 S244 Compliance with Approved Accounting Standards

    Apart from accounts in accordance with MASB,
    additional information by the Registrar as he deems fit
    apart from the information required by the authorities
    under Section 26D of the Financial Reporting Act 1997
    [S249(3)]

    If not, how should I word it ?

  • Steven

    Reply Reply June 8, 2017

    Hi,

    I hope my answer can be put into the 6/6/17 deadline for Q&A. TQ

    Can you share with us (in Excel format, do share a simple figure for illustration)how to do the transition of MPERS for property develop for below case.

    Case: YA 2015, the Company is developing a total of 50 units residential house and the borrowing cost is RM200K which has capitalised. During the year, the Company has sold 15 units. The completed project only in 2017.

    1) How to account in this situation?
    2) How to deal with the tax computation for 2015? Do we need to amend the form C for 2015?
    3) What is the best practice in the market? Can we claim this is undue cost to charges out?

  • Steven

    Reply Reply June 8, 2017

    For my above questions for illustration, you can feel free to use your sample available in your firm to show. TQVM.

  • Steven

    Reply Reply June 8, 2017

    Can you share with us your firm percentage of completion worksheet?

  • liew

    Reply Reply January 10, 2018

    What is definition of Biological Assets?

    For those year end 2015, can early adoption Mpers?

  • Lim Thian Loong

    Reply Reply January 15, 2018

    1. Can we prepare the audit report under PERS for FYE31/12/2015 with Companies Act, 2016 requirement and date today? Why yes or why no?

    2.Can we prepare the audit report under PERS for FYE31/12/2015 with Companies Act, 1965 requirement and date today? Why yes or why no?

    3. Unclaimed dividends for past years were in Current Liability and the Company refused to remit to Unclaimed Monies Department. How to deal with these matters under MPERS? How to resolve the unclaimed monies and what are the consequences for retaining these amount in the account? Auditors have any responsible on these matters?

  • Evanna

    Reply Reply January 17, 2018

    keat chew Q
    can you elabourate on how to deal with capital reserve in Mpers, znd how to get rid of it,ac entry board resol etc, notes to ac if need be?

    Jason L Q
    Just to clarify if it’s typo, CA 2015?

    keat chew Q
    a s/b, b s/b, c/s/b, eacg company has two directors out of rour directors in common, must we disclose the direct interest and deemed interest for all the 3 companies, and if so, do we just put name of directors, name of companies and number of shares held in each of the 3 companies?

    Yang Siew Tiang Q
    what value measurement is used ?

    keat chew Q
    related party transactions

  • Rudy

    Reply Reply January 17, 2018

    Q : How to disclose the amount due from/to Directors or related companies in the MPERS ?

    Q : As previous question that sharon eleborate, why the share premium is not under MPERS ? and how to disclose this matter ?

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