a. Explain what an impairment test is and discuss when an entity should conduct impairment testing. (4 marks)

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?(4 marks)

c. Outline the fundamental qualitative characteristics that financial accounting information should possess and discuss whether a tradeoff maybe required between the characteristics. (5 marks)

d. On 30 June 2020, the end of the current reporting period, Wang Ltd made a decision using the information obtained over the past few years, to revise the useful life of its building acquired five years earlier on 1 July 2015 for $1,000,000. The useful life was revised from 10 years to 15 years. The building was originally depreciated on the straight-line basis over its useful life and it was expected that the building would have no residual value.

1. Discuss whether the above scenario is an example of a change in accounting policy or a change in accounting estimate. (2 marks)
2. If Wang Ltd changed the depreciation basis from the straight-line method to the reducing-balance method, as it better reflects the consumption pattern of the future benefits associated with the building, instead of changing its useful life, would this change your answer in part i.? (2 marks)