Identify the four components of an accounting policy. Illustrate your answer with an example

of an accounting policy for emission trading allowances that are received by the reporting

entity from the government at no cost. The emission trading allowances will expire two years

after they were received.

Define - what element(s) of the financial statements

Recognise - when should it be recognised

How it should be MEASURED

What is to be disclosed about the transaction/event/item