REQUIREMENT
• The CEO of the company is asking your opinion about the relevant accounting treatment that every transaction should receive. Choosing the appropriate accounting treatment should be based on your understanding to the accounting standards under which these business transactions fall. The CEO is asking from you to present a comprehensive report of the implications of each choice on the Statement of
Financial Position and the Income Statement. The CEO is asking you to critically comment on the appropriateness of fair value and historical value reporting methods in each of the above mentioned transactions.
GUIDELINES
• You might check IAS 16 (Property, Plant and Equipment) and IAS 39 (Impairment of Assets) for the first transaction.
• You might check IAS 28 (Investment in associates) and IAS 39 (Financial Instruments) for the second transaction.
• You might check IAS 2 (Inventories) for the third transaction.
