- This topic has 1 reply, 2 voices, and was last updated 4 years ago by Kim Smith.
- You must be logged in to reply to this topic.
Instant Poll - Read and post comments:
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
Hi Sir I am confised about how to determine the fair value of asset exchanged.
For example, in order to acquire an overseas property with a fair value of 58.5 million dinars, the entity paid the supplier with land whose carrying amount is $5 million while the open market price is $7 million. The transaction has commercial substance.
May I know why we should choose $7 million as the fair value of the property?
With commercial substance, shall we use the fair value of the asset received as the new asset?
Thank you very much:)
I think you are referring to the answer to Q Bubble in the S/D15 exam in which $7m was stated to be the fair value.
ACCA’s examining team confirmed that $6.5m (58.5m/9) was “also correct” in accordance with IAS 16.