Consolidated financial statement

Hi tutor,

Can I know what will the following notes will affect on the consolidated financial statements of Magna Bhd Group?

How the issues affect either in goodwill calculation/ Consolidated retained earnings/ Impairment of goodwill/ Non-controlling interest?

1. Included in the financial assets of Magna is a 10-year 7% loan. Magna has adopted the IFRS 9 Financial instruments and the loan assets are currently held at amortised cost of RM135 million. This is net of an allowance, including interest, at 30 June 2019, of twelve months’ expected credit losses of RM13.5 million. At 30 June 2020, the borrower had experienced financial difficulties and its credit rating had been downgraded. As a result, the loan is considered to be in Stage 2 according to IFRS 9 expected credit loss model. Lifetime expected credit losses were RM39.6 million. This reflected the difference between the carrying amount and the revised expected receipts of three annual amounts of RM36 million commencing in one year’s time discounted at the effective interest rate of 6.5%. No adjustment entries have been made in the financial statements for this since 30 June 2019.

2. Magna held a portfolio of trade receivables with a carrying amount of RM30 million at 30 June 2020. At that date, Magna had entered into a factoring agreement with a financial institution, under which it will transfer its receivables in exchange for RM27 million in cash. Once the receivables have been collected, any amounts in excess of RM27 million, less interest on this amount, will be repaid to Magna. Magna has derecognised the receivables and charged RM3 million as a loss to profit or loss.

Hope you can help me on this.
Thank you in advance.