Question: a) 'X' Ltd. has been measuring a Machine on Balance Sheet based on the historical cost of $50,000. In the current year, the Directors would

a) 'X' Ltd. has been measuring a Machine on Balance Sheet based on the historical cost of $50,000. In the current year, the Directors would like to change to measure that item based on the fair value of $70,000.Make a critical analysis between fair value and historical costs.

b) Analyse the conditions for using accounting based earnings rather than market information for fixing manger's bonus.

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