question archive The following pertains to Wild Company's biological assets: Fair value based on quoted price in an active market for similar asset P5,100 Fair value based on quoted price in an active market for identical asset 5,000 Fair value based on unobservable inputs for the asset 4,900 Selling price in a binding contract to sell 5,200 Estimated commissions to brokers and dealers 500 Estimated transport and other costs necessary to get asset to the market 300 The entity's biological assets should be valued at a
The following pertains to Wild Company's biological assets: Fair value based on quoted price in an active market for similar asset P5,100 Fair value based on quoted price in an active market for identical asset 5,000 Fair value based on unobservable inputs for the asset 4,900 Selling price in a binding contract to sell 5,200 Estimated commissions to brokers and dealers 500 Estimated transport and other costs necessary to get asset to the market 300 The entity's biological assets should be valued at a
Subject:FinancePrice:3.87 Bought7
The following pertains to Wild Company's biological assets: Fair value based on quoted price in an active market for similar asset P5,100 Fair value based on quoted price in an active market for identical asset 5,000 Fair value based on unobservable inputs for the asset 4,900 Selling price in a binding contract to sell 5,200 Estimated commissions to brokers and dealers 500 Estimated transport and other costs necessary to get asset to the market 300 The entity's biological assets should be valued at
a. P4,600
b. P4,300
c. P4,500
d. P4,200
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Answer:
d. P4,200
Explanation:
it is worthy of note that biological assets are to be measured at the fair value less costs to sell.
The challenge here is choosing the appropriate fair value out of the three fair value amounts presented in the scenario.
In the 3 hierarchies of fair value inputs, the highest priority is given is to the observable quoted prices in an active market for identical assets or liabilities that are accessible to the entity making the fair valuation at the measurement date.
In short, the most reliable fair value, in this case, is the one for identical assets which is P5,000
Costs to sell include estimated commissions to brokers and dealers and transportation cost
costs to sell=500+300
costs to sell=800
value of biological assets=5,000-800
value of biological assets=P4,200
