Format of financial statements

Question 1

ICAEW framework for resolving ethical problems

Answer 1

Gather the relevant facts and identify the problems
Identify the affected parties
Consider ethical issues involved
Identify which fundamental principles are affected
Refer to the employing organisation’s internal procedures
Consider and evaluate alternative courses of action
Implement the course of action and monitor its progress
Call the ICAEW helpline
Document all decisions / steps followed and the reasons behind them

Question 2

2 reasons why an item shouldn’t be recognised

Answer 2

There is too much uncertainty about its existence
There is a low probability of any future economic benefit from it