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In the answer sheet it says “where an active market for the asset exists, this fair value could be inappropriate.” but somehow I remember some one telling me “where an active market for the asset exists, this fair value could be will estamated based on the active market .”
it’s not saying that – you need to read the clause in the middle (i.e. with the commas around it) separate from what is outside the clause:
The fair value which was recognised in the parent company accounts immediately prior to the transfer of the asset was determined by Group management …. this fair value could be inappropriate.
, and while revaluation is permitted by IAS 38 where an active market for the asset exists,
Do you get it now?
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