Hsiu Plc purchased a factory on 1 January 2017 for 950,000 and has been depreciating the factory 10% per annum using the reducing balance method. On 31 December 2020 a storm damaged the factory. As a result the factory is now estimated to have a market value of 470,000 before selling costs of 20,000. Hsiu have assessed the likely output of the factory given the damage and believe that for the next 4 years the factory is likely to generate cashflows of 195,000, 145,000, 100,000 and 65,000, all discounted to present value. At the end of the four years the factory is not anticipated to produce any further cashflows or have a residual value. Hsiu Plc has a 31 December year end.

a)Prepare extracts from the financial statements of Hsiu Plc at 31 December 2020 inrelation to the factory, providing an explanation of the necessary treatment in relation tothe damage to the factory from the storm. b)Hsiu Plc is considering contracting some work to be performed to reverse some of thedamage to the factory from the storm during 2021. Explain if this expenditure on thefactory can be added to the value that the factory will be held at on the Statement ofFinancial Position after the work has been performed. c)Hsiu Plc produces financial statements annually. Explain the objective of financialreporting and who are the primary users of financial reporting according to the IFRSConceptual Framework 2018. Discuss this objective in relation to the fundamentalcharacteristics of useful financial information and the concept of materiality.