Minutemin Limited, a client of yours, sells photocopiers and provides photocopying services. The manufacturer supplies inventory to Minutemin on the following terms and conditions: Minutemin pays the manufacturer a deposit if R3 000 per photocopier upon delivery. The machines have a total cost of R30 000. The photocopiers are displayed on Minutemins premises and used as demonstration models until sold. When an item is sold, the balance of the purchase price, which is determined when the deposit is paid, is paid to the manufacturer. Minutemin pays for the insurance of the items while its on the premises. If the items are not sold after 3 months, they can be returned to the manufacturer. This situation has never taken place as the company keeps only one months inventory on hand at any one time.

Required:

1.1. Discuss the recognition of the photocopiers in the financial statements of Minutemin Limited with reference to the Conceptual Framework.

1.2. Explain the benefits that arise from having a conceptual framework.