(b) A company has issued specific preference shares to its fund managers. Theycarry the right to an annual payment based on 10% of the realised gains on thefund recorded in the period.How should the preference shares be accounted for? Give reasons for youranswer.Your answer to this part of the question should not be more than 120 words.

Firstly, let us understand who fund Managers and preference shares are. Fund Managers are investment…

Answered: carry the right to a fund recorded in…

Business

Accounting

carry the right to a fund recorded in th How should the pre answer. Your answer to this

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(b) A company has issued specific preference shares to its fund managers. They
carry the right to an annual payment based on 10% of the realised gains on the
fund recorded in the period.
How should the preference shares be accounted for? Give reasons for your
answer.
Your answer to this part of the question should not be more than 120 words.

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