Question

MercuEmas Bhd. purchased a machine at the beginning of 2016 at a price of RM300,000. The...

MercuEmas Bhd. purchased a machine at the beginning of 2016 at a price of RM300,000. The machine was used to produce product X. The machine has been depreciated using the straight-line method with a 15-year useful life and no residual value. The demand for product X has reduced significantly for the last 15 months due to intensified competition from competitor companies. In addition, the productivity of the machine has reduced by 30%. It was also estimated that the machine can only be used for the next five years.

Discuss the requirement of para 8 and 9 MFRS136 regarding the machine.

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