Question: Explain how you would account for the following items, justifying your answer by reference to the Conceptual Framework's definitions and recognition criteria: (a) A trinket

Explain how you would account for the following items, justifying your answer by reference to the Conceptual Framework's definitions and recognition criteria:
(a) A trinket of sentimental value only.
(b) You are guarantor for your friend's bank loan:
(i) You have no reason to believe your friend will default on the loan.
(ii) As your friend is in serious financial difficulties, you think it likely that he will default on the loan.
(c) You receive 1000 shares in X Ltd, trading at $4 each, as a gift from a grateful client.
(d) The panoramic view of the coast from your café's windows, which you are convinced attracts customers to your café.
(e) The court has ordered your firm to repair the environmental damage it caused to the local river system. You have no idea how much this repair work will cost.

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a Trinket of sentimental value Fails the para 49a asset definition as it does not constitute future economic benefits defined in para 53 as the potential to contribute directly or indirectly to the fl... View full answer

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