Reference no: EM132618165

Question -

a. Dickinson Ltd records the carrying amount of land using the revaluation model. The chief financial officer states that impairment is only relevant to the cost model and therefore the land would not be subject to impairment testing.

1. Explain what an impairment test is and whether it is relevant to the revaluation model.

2. Discuss when an entity should conduct impairment testing.

b. In related party disclosures, key management personnel related transactions are subject to the highest degree of required disclosure. Why do you think this is the case?

c. Outline the fundamental qualitative characteristics that financial accounting information should possess and discuss whether a trade-off maybe required between the characteristics.

d. On 30 June 2020, the end of the current reporting period, the directors of Dickens Ltd made a decision to discontinue the capitalising of research and development expenditure and to expense all expenditure when incurred. Discus whether this is a change in accounting policy or a change in accounting estimate and whether the change is to be applied retrospectively or not.