Analyse the conditions for using accounting based earnings

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Problem a) 'X' Ltd. has been measuring a Machine on Balance Sheet based on the historical cost of $50,000. In the current year, the Directors would like to change to measure that item based on the fair value of $70,000. Make a critical analysis between fair value and historical costs. 

Problem b) Analyse the conditions for using accounting based earnings rather than market information for fixing manger's bonus.

Reference no: EM132804677

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