Question 4 Imperial Ltd has two investments. One, an investment in listed shares, is available for sale as a financial asset. The current market value is 22,500 but the shares were bought for 37,500. The other is an investment in a three- year bond with an amortised cost of 450,000 with a stated and effective interest rate of 7% (current market rates are 10%). But after two years Imperial Ltd is not expecting the last year's interest and expects only half of the principal Required: (a) Define financial instruments, convertible financial instruments, financial assets and financial liabilities. Discuss how financial instruments and convertible financial instruments are accounted for. Your answer to this part of the question should not be more than 300 words. (10 marks) (b) Does the definition of equity and liabilities in the current conceptual framework help with the definition of preference shares? Your answer to this part of the question should not be more than 120 words. (4 marks) (c) What impairment should be recorded in the accounts of Imperial Ltd? Give reasons for your