Question 2 Fair Value Measurement

Handy Ltd holds a non-financial asset that is traded in three different active markets, Market A, Market B, and Market C. All markets are accessible and Handy Ltd transacts in all three markets. The valuation premise for the asset is on a stand-alone basis.

Debo Ltd owns an identical non-financial asset and only trades in Market C, as it cannot access Markets A and B. The valuation premise for the asset is on a stand-alone basis.

Relevant information about these markets is as follows:

	Market A	Market B	Market C
Annual Market Volume ( units)	60 000	24 000	12 000
Market Price (per unit)	$150 000	$146 000	$156 000
Transactions coss	6 000	6 000	8 000
Costs to transport to market	2 000	4 000	4 000

Required:

A) Determine the fair value of the asset per unit for Handy Ltd. Show all calculations and briefly explain your answer with reference to AASB 13 where appropriate.

B) Determine the fair value of the asset per unit for Debo Ltd. Show all calculations and briefly explain your answer with reference to AASB 13 where appropriate.

C.) Is it incorrect if two independent entities determine a different fair value for an identical non-financial asset?