Reference no: EM132531913

Company A holds an asset that is traded in two different markets. Company A has access to both markets. Information about both markets is as follows:

                                          Market A                   Market B

Market volume (units)        6000                    3000

Price                                40                            35

Transportation costs            83

Transaction costs      41

In accordance with IFRS 13, answer the following questions:

Question 1: Calculate the net proceeds of selling the asset in both markets.

Question 2: Identify the principal market and the most advantageous market.

Question 3: Determine the fair value of the asset.

Question 4: Assume that Company A trades 2000 units in Market A and 3000 units in Market B. Explain whether this information makes a difference in the determination of the principal and most advantageous markets.

Question 5: Company A plans to revalue its property, plant and equipment. Determine an appropriate valuation technique that Company A should use when measuring the fair value of its property, plant and equipment. As part of your answer you should identify each input in accordance with the fair value hierarchy.