Question 2 2.1) Happy plc purchased equipment for 1,000,000 on 01 Jan 20x2. The equipment had a useful life of five years, was depreciated using the straight-line method, and its residual value was zero. Happy plc chose to revalue its equipment to fair value over the life of equipment. Happy plc employed an independent appraiser, who determined that the fair value of equipment as follows: Date of appraisal 01 Jan 20X3 01 Jan 20X4 01 Jan 20X5 Fair value of equipment 950,000 570,000 350,000 Additional information: As the asset is used by an entity, IAS 16 allows companies to transfer the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost to retained earings. Happy plc decided to adopt this approach. On 01 Jan 20X4, managers of Happy plc found that the remaining useful life of the equipment reduced from 3 years to 2 years. On 02 January 20X5, Happy plc sold the equipment for 350,000. Required: Show how this equipment would be accounted for in the statements of comprehensive income and statement of financial position of Happy plc for the financial years ending 31 December 20X2-20x4 and disposal on 02 January 20X5. (20 marks) 2.2) The adoption of fair value accounting is one of the most controversial topics in the accounting research, please discuss whether the use of fair value accounting can provide useful information to the users of financial statements. (10 marks)