The ABC company is currently growing and it is expected that in five years an additional factory | My Assignment Tutor

Referencing Styles : Harvard The ABC company is currently growing and it is expected that in five years an additional factory will need to be built to meet product demand at a cost of $500 000. The directors wish to recognise an expense of $100 000 and a liability (provision for future expansion) for each of the next five years. Applying the principles in the Conceptual Framework, explain whether: o the definition of an expense is met. o the recognition criteria for an expense are met. 2. The company has recently issued some preference shares. The terms of these shares are: • A fixed dividend of 3 per cent is payable each year. If no profit is available to pay dividends in one year, these will be back-paid in future years. • The preference shares will be redeemed (bought back) by the company in three years at their issue price. Applying the principles in the Conceptual Framework, explain whether these preference shares should be considered as equity or a liability. 3. Find a current discussion paper, proposal or exposure draft on the IASB website. Critically discuss the measurement issues raised in the paper and examine the importance of resolving these issues from a standard-setting perspective. (10marks) Hint: you may identify and summarise the measurement issues raised in your selected paper, then critically discuss the related issues. You may need to use other references to support your discussion.  

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