The following situations have arisen affecting the financial affairs of Hexamon Ltd. The company's year-end was 28 February 2015.

a. The company owns some machinery that has been under-used during the financial year ended on 28 February 2015 because of a fall in demand. The machinery has a net book value of $32 000. The financial director assessed the machinery's value in use to be $20 000; it appears the machinery could be sold for $23 000 but the company would have to pay selling expenses of $4000.

b. The company is being sued by a customer, MRB Ltd, for $25 000. The court case began in early January 2015 but no judgment had been made at the time of preparing the financial statements. The company's legal adviser has said that it is possible MRB Ltd will win its case and receive the amount mentioned.

c. On 28 February 2015 the directors agreed to propose a dividend of $0.05 per share on the company's 1 million ordinary shares of $1 each on the profits for the year ended 28 February 2015.

For each situation:

i. state the international accounting standard that should be applied (number and name)

ii. Explain the main requirements of the accounting standard which apply to situation

iii. State how the situation should be treated in the published financial statements of the company for the year ended 28 February 2015.