To be reliable financial statements must be neutral. This means that when accounting and reporting one has to be objective – avoiding subjective judgement. However, subjective judgement (based on past experience) is necessary in which of the following areas?

(i) When estimating the useful economic life of non-current assets

(ii) When assessing recoverability of trade receivables

(iii) When assessing inflow of future economic benefits

(iv) Estimating the extent of obligation to pay when invoice is awaited

Transcribed Image Text:

ai only bi and ii ci, ii and iii di, ii, iii and iv