Question: Assets definition and recognition Prepare a response to part a) only! Explain whether you would recognise each item below as an asset and, if so,

Assets definition and recognition

Prepare a response to part a) only!

Explain whether you would recognise each item below as an asset and, if so, at what value. Justify your answer by reference to the Conceptual Frameworks asset definition and recognition criteria:

(a) a specialised machine that was specifically developed for the production of specialised goods by Company X. The value of the machine was calculated by a valuation specialist to be $100,000. (b) a lottery ticket purchased for $100 by Lucky Ltd. Lottery winnings range from $0 to $10 000 000, with an average win per $100 ticket of $5. Assume that reselling the lottery ticket is prohibited by law.

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