It's company accounting question.

Question 1 (3 Burk!) A first-time shareholder has approached you requesting some advice. The shareholder has received the company's annual report and noticed the following statement in the summary of signicant accounting policies: 'The financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets which is explained in the notes.' Required Explain to the shareholder why this statement is included in the accounting policy note. Question 2 (4 marks) 'Impairment is only relevant to assets carried under the cost model. For assets carried under the revaluation model, such as our land and buildings, increases and decreases in fair value dictate whether carrying amounts are adjusted up or down. We don't bother : testing land and buildings for impalrment.' Required Critically evaluate the above statement. Questionii (3 marks) Alloy Ltd has acquired a Blink manufacturing division from LGIA Ltd. The accountant, Mr Lee, has shown the board of directors of Alloy Ltd the financial information regarding the acquisition. Mr Lee calculated a residual amount of $45 000 'to he reported as goodwill in the accounts. The directors are not sure whether they want to record goodwill on Alloy msutement of financial position. Some directors are not sure what goodwill is or why the company has bought it. Other directors even query whether goodwill is an asset, with some being concerned with future effects on the statement of prot or loss and other ,_ comprehensive income. ' -' liequlred - _ - a f . AdvheMr Lee aboutthe nature of goodwill and how to account for it