1. There are two main approaches to deal with revenue and expense measurement and recognition in interim financial statements.Describe the overall approach to be followed according to IAS 34.

2. How are the following specific expense issues to be dealt with in interim financial statements?

a. Major planned annual expenditures relating to a convention to take place in October. We are preparing the interim financial statements for quarter one.

b. Discretionary year-end bonuses which are not based on a formula.

c. As the lessee, you may pay extra lease payments based on achieving a certain level of sales for the year. It is highly probable that the lease will achieve the level of sales.If gross sales for the year exceed $1,000,000, an additional amount equal to 1% of sales in excess of $1,000,000 is payable.We are preparing quarter one interim financial statements and have reported sales to date of $700,000. Assume sales are consistent throughout the year (no seasonality).

d. Inventory is on the balance sheet at $250,000.Net Realizable value at the interim reporting period is $225,000.