PPE Tutorial Rockstar Manufacturing Co Limited has presented you with the following balances from its trial balance as at 31 December 20XO (both balances have been classified as equipment) Def-maker Amplifier carrying amount Universal Guitar Stringer: carrying amount (Note 1) (Note 2) $853 650 3542 000 Note 1: The amplifier is specialised equipment manufactured during the current financial year by Rockstar Included in the cost of the amplifier are the following: $712 000 for inventory, including 514 000 for inventory that had to be scrapped $106 500 in direct labour costs, of which $6 000 is in respect of idle time 595 000 for allocated overheads, half of which relate to administrative overheads $35 000 that was spent on training staff on how to use the machine The amplifier was ready for use on 1 May 20xo but was only brought into use on 1 July 20x0. The estimated useful life of the asset is 5 years with no residual value and economic benefit is expected to flow evenly throughout its useful life. Note 2: Rockstar took advantage of a supplier's special and returned its Universal Guitar Stringer for a newer model on the 31 December 20x0. The carrying amount of the stringer given up was $542 000, which Rockstar believed they could sell for $550 000, while the fair value, per IFRS 13, of the stringer received is $600 000 The financial director of Rockstar has misgivings regarding the accounting department's ability to keep abreast of the numerous changes to the International Accounting Standards Board. He has, thus, asked for your opinion regarding the treatment of the above matters. Required: In a letter to the financial director, discuss the recognition and measurement of the above items of equipment in terms of International Financial Reporting Standards