Caloy co. bought
2. Caloy Co. bought 1,000 shares from Bayan Co. The shares have no active market, but an identical or similar asset has an active market. The identical asset, however, has multiple markets. Caloy determines that the identical asset has the following market values:
How much is fair valuation
Homework Answers
Answer 2
Fair Valuation of investment = $475,000
Explanation
| Market A | MARKET B | |
| Fair Value | $500 | $600 |
| Less - Transaction cost | ($25) | ($150) |
| Fair Value lesss cost to sell | $475 | $450 |
| Multiply : No of shares | $1,000 | $1,000 |
| Total Value | $475,000 | $450,000 |
| Whichever is higher | $475,000 |
Fair Value assumes a transaction taking place in the principal for the asset or liability. Or in the absence of a principal market, the most advantageous market for asset or liability. { IFRS 13:24 }
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