Question
DelClean Pte Ltd, a company incorporated in Singapore and which adopts Singapore Financial Reporting Standards, sells a special cleaning solution in three different cities in
DelClean Pte Ltd, a company incorporated in Singapore and which adopts Singapore Financial Reporting Standards, sells a special cleaning solution in three different cities in Malaysia. There is no information on the market volume in each of the three markets. The current year's prices in the three different markets are as follows:
Johor Bahru Malacca Kuala Lumpur
Price per unit (at period end, $) 45 42 38
Transport costs per unit ($) 2 3 4
Transaction costs per unit ($) 1 2 2
Required:
Using an appropriate financial reporting standard, explain and determine the fair value of the cleaning solution (unit price) DelClean Pte Ltd should use in its financial statements for the current period. (10 marks)
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