To meet demand, we will be replacing our weaving machinery with larger, more efficient machinery (details of which are attached in Table 1) I know that there will be questions at the SMT meeting later today about these assets and therefore | would like you to include in your briefing notes an explanation, with appropriate justification, of:

2. How the expenditure associated with the new weaving machinery will be initially recorded in our financial statements. Please also explain how the weaving machinery asset will be depreciated in our financial statements for the year ending 30 June 2022 [32 marks]

3. How the existing weaving machinery that is to be treated in our financial statements for the year ending 30 June 2022. [ 28 marks]

Table 1: Weaving machinery Table 1: Weaving machinery