The board of directors of KLM Pte Ltd (“KLM”) has decided on 18 December 20X1 to close its factory in Malaysia and move

[answerhappygod]

The board of directors of KLM Pte Ltd (“KLM”) has decided on 18
December 20X1 to close its factory in Malaysia and move it to
Vietnam. The decision was based on a detailed formal plan of
re-structuring as required by FRS 37 “Provisions, Contingent
Liabilities and Contingent Assets”. The decision was conveyed to
the management personnel at the headquarters in Germany. The cost
of restructuring the operation in Malaysia as per the plan was
$700,000. Illustrate and explain how KLM should treat this
re-structuring in its financial statements for the year ended 31
December 20X1. (8 marks)