A. You have been asked to preparing a report for the finance director regarding the Conceptual Framework and discussion about the financial statements which should cover the following:

Evaluation of the 'conceptual framework' for financial reporting

The aims of the IASB Conceptual Framework for Financial Reporting.

Definition of the elements of financial statements and when they should be recognised in the financial statements.

b.Define the terms ''depreciation'', ''depreciable amount', ''useful-life'', ''residual value'' and ''net book value''.

On 1 April 2020, ABC prepare financial statements to 31 March each year, purchases an item of equipment, AX1, for 59,500 with a salvage of 1,500 at the end of five years. At the start of year three the AX1 is sold for loss of 10,000 and the updated version of the equipment called the BXX1 is purchased for 69,500 with a residual value of 1,500 after eight years. The BXX1 is revalued at the start of fifth year by 5,000 as no more models are expected to be made.

c. Calculate the depreciation for five years using the straight-line method