Peter Chou is thegeneral manager of Madari Ltd. He believes thatintragroup transactions can be included within consolidated financial statementsas long asthe transaction represents fair value. That is, the value of the transaction is equivalent to an 'arm's length' transaction.

require: A concise response to Peter Chou and Mr.Chou is not an accountanthence ensure that the explanation isunderstandable to a non accountant.(5 marks)