Show me the steps to solve UNIT $1$ ASSIGNMENT QUESTION

$(25$ MARKS$)$

During January $2024$ you were appointed as an accounting intern in TERFIN $($Pty$)$ Ltd$\text{'}$s $($henceforth "TERFIN"$)$ accounting department for a period of $2$ months. TERFIN is a private provider of student loans to tertiary education students. Your appointment coincided with the end of the $28$ February $2024$ financial reporting period. As a result, you were placed in a team responsible for financial reporting. A requirement of your intemship contract is that in order to get your "experience" signed off you must write a memo to the Financial Reporting Supervisor demonstrating your learnings from the experience.

REQUIRED:

Write a short memo to the financial reporting supervisor and answer the set of questions below.

a$)$ List the fundamental qualitative characteristics and enhancing qualitative characteristics of useful financial information. $(3$ marks$)$

b$)$ In the notes to the financial statements dated $28$ February $2024$ as provided in the $2024$ Annual Report, the following accounting policy note appears:

Initial recognition of student loans at fair value

Student loans are recognised initially at fair value plus any directly attributable transaction costs.

Market and client specific actuarial assumptions are used in the estimate of the fair value of the student loans ot initial recognition.

Subsequent to initial recognition, student loans are measured at amortised cost using the affective interest method, less any impairment allowances.

TERFIN has been granting loans since $2007$ and therefore has a detailed repayment profile for its debtor database in terms of historic loss experience.

TERFIN ioans have no fixed repayment terms and the debt is only due and payable one year after exit from the higher education system and, if the student has bacome employed and is earning more than R$30,000$ par annum.

Discuss, using the $5$ step approach to answering theory questions and with reference to the Conceptual Framework, the Identification, Recognition and Measurement of the student loans in the books of TERFIN $($Pty$)$ Ltd$.$ The discussion must be made applicable to the student loans and not a copy and paste of theory learned.

$(22$ marks$)$

Marks broakdown for b$)$