"Ice-cream R Us Ltd just purchased a block of land, on which it will build a new factory for its operations. Ice-cream R Us paid $500 000 cash to the land owner. An independent evaluation reveals that the land is worth $550 000. Using historical cost as a measurement base, how should Ice-cream R Us recognise the land purchase in its financial statements?"

		$550 000 recognised as an asset (land).
		$500 000 recognised as an asset (land) and $50 000 as a liability.
		The land should not be recognised as an asset as it cannot be measured with reliability.
		$500 000 recognised as an asset (land).

Which of the following is incorrect about the conceptual framework?

		The conceptual framework is designed to assist standard setters in setting accounting standards.
		The conceptual framework is designed to assist all parties to understand and interpret the accounting standards.
		The conceptual framework is designed to assist financial statement preparers in developing consistent accounting policies.
		The conceptual framework is an accounting standard.