Alif Dairy Bhd (ADB) is principally involved in dairy farming, processing and distribution of fresh dairy produce. The company operates in Kulim, Kedah since 2010 and now has more than 20 dairy farms in Malaysia. In 2015, ADB acquired 200 acres of land in Kuala Ketil, Kedah by issuing 100,000 units of ordinary shares. The land is a vacant land and recently was appraised at RM1.5 million. In 2019, Kedah State Government announced to develop Kuala Ketil as industrial area. Many factories from big companies were built and the area is named Kuala Ketil Industrial Park. The vacant land of ADB is located near to the industrial park. ADB estimates that the land could be developed as a site for industrial purpose with a fair value of RM2 million and the cost to converted the land is estimated to be RM150,000. ADB also owns milk processing equipments in each branch. The equipments were purchased from a company selling various milk processing facilities in New Zealand. Recent survey carried out by the company indicates that similar equipments are traded in Retail, Wholesale and Dealer market in Malaysia. ADB has access in all markets. In determining the fair value of the equipments, the accountant provides the following data: The company is in the process to prepare its financial statements for the year ended 31 December 2021. REQUIRED: (a) Determine the fair value of the land of ADB as at 31 December 2021 as per MFRS 13 Fair Value Measurement. (b) Determine the fair value of the equipment of ADB as at 31 December 2021 as per MFRS 13 Fair Value Measurement. (c) Explain TWO (2) approaches of valuation techniques and provide ONE (1) example of common usage for each approach. Alif Dairy Bhd (ADB) is principally involved in dairy farming, processing and distribution of fresh dairy produce. The company operates in Kulim, Kedah since 2010 and now has more than 20 dairy farms in Malaysia. In 2015, ADB acquired 200 acres of land in Kuala Ketil, Kedah by issuing 100,000 units of ordinary shares. The land is a vacant land and recently was appraised at RM1.5 million. In 2019, Kedah State Government announced to develop Kuala Ketil as industrial area. Many factories from big companies were built and the area is named Kuala Ketil Industrial Park. The vacant land of ADB is located near to the industrial park. ADB estimates that the land could be developed as a site for industrial purpose with a fair value of RM2 million and the cost to converted the land is estimated to be RM150,000. ADB also owns milk processing equipments in each branch. The equipments were purchased from a company selling various milk processing facilities in New Zealand. Recent survey carried out by the company indicates that similar equipments are traded in Retail, Wholesale and Dealer market in Malaysia. ADB has access in all markets. In determining the fair value of the equipments, the accountant provides the following data: The company is in the process to prepare its financial statements for the year ended 31 December 2021. REQUIRED: (a) Determine the fair value of the land of ADB as at 31 December 2021 as per MFRS 13 Fair Value Measurement. (b) Determine the fair value of the equipment of ADB as at 31 December 2021 as per MFRS 13 Fair Value Measurement. (c) Explain TWO (2) approaches of valuation techniques and provide ONE (1) example of common usage for each approach
