问答题(c)The directors of Kutchen are considering the purchase of a company in the USA. They have heard that theaccounting standards in the USA are ‘rules based’ and that there are significant differences of opinion as towhether ‘rules based’ standards are superior to ‘principles based’ standards. It is said that this is due toestablished national approaches and contrasting regulatory philosophies. The directors feel that ‘principles based’standards are a greater ethical challenge to an accountant than ‘rules based’ standards. Required: Discuss the philosophy behind ‘rules based’ and ‘principles based’ accounting standards, setting out theethical challenges which may be faced by accountants if there were a switch in a jurisdiction from ‘rulesbased’ to ‘principles based’ accounting standards. (7 marks)

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问答题(d)Yanong uses the revaluation model for its non-current assets. Yanong has several plots of farmland which areunproductive. The company feels that the land would have more value if it were used for residential purposes.There are several potential purchasers for the land but planning permission has not yet been granted for use ofthe land for residential purposes. However, preliminary enquiries with the regulatory authorities seem to indicatethat planning permission may be granted. Additionally, the government has recently indicated that moreagricultural land should be used for residential purposes. Yanong has also been approached to sell the land for commercial development at a higher price than that forresidential purposes. Yanong would like advice on how to measure the fair value of the land in its financial statements. (5 marks) Required: Advise Yanong on how the above transactions should be dealt with in its financial statements with reference torelevant International Financial Reporting Standards. Note: The mark allocation is shown against each of the four issues above. Professional marks will be awarded in question 2 for clarity and quality of presentation.(2 marks) Note: Ignore any deferred tax implications of the transactions above.

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