This is Starys Ltd first year of trading and the shareholders do not fully understand the purpose of financial reporting and requires further information.

1. Explain the objective of general-purpose financial reporting stating what information is provided in the statement of comprehensive income and the statement of financial position.
2. Suggest an economic decision that might be made by employees and lenders identified by the Conceptual Framework for Financial Reporting.
3. Dolby Ltd, an international food wholesaler, is preparing its financial statements for the year ending 31 March 2020

During April 2020 the following matters occurred.

1. Dolby Ltd has made the decision to relocate to a central location and close the regional warehouses in which they currently operate which will result in significant job losses.

2. A customer who owed the company 30,000 was declared bankrupt.

3. An impairment review was carried out on a fleet of vehicles and it was found that an impairment loss of 40,000 had occurred.

4. A proposed dividend totalling 2,000,000 was declared.

In accordance with IAS 10 Events after the reporting period, explain how the items above should be treated in the financial statements for the year ending 31 March 2020.

4. A limited company purchases a new printer costing 60 for the administration office which is expected to have a useful life of five years.

The IASBs Conceptual Framework for Financial Reporting refers to preparers of the financial statements making judgements as to whether an item is material.

1. Explain the term materiality and how it can impact on the users of financial statements.

2. With reference to the materiality concept, explain how the purchase should be treated in the financial statements.

1. Julie Plants Ltd provides plants and their continued care on a 12-month contract to business offices. The company prepares its financial statements to 31 March each year.

During the year to 31 March 2020, Julie Plants entered into a 12-month contract to provide plants and their care in the reception of Computerchoice Plc. The contract was for 22,200 and commenced on 1 September 2019.

What is the amount of revenue, if any, which should be recognised in the financial statements for the year ending 31 March 2020 in respect of the contract with Computerchoice Plc.

2. Buxy plc has held 30% of the ordinary share capital of Robin Ltd for three years and includes the investment under the heading of non-current assets using the equity method. Briefly explain, how will Buxy value the investment in the statement of financial position?