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On 1 January 2021, Nobleman plc agreed to buy a luxury property in London for £12 million from Aristocrat plc. Contracts were exchanged in June 2021 and over the six-month period from the agreement to the exchange of the contracts, London's property prices had significantly risen. Belgravia plc sold an identical property for £15 million. Nonetheless, in order to honour the gentlemen's agreement stipulated with the chief executive of Nobleman plc, the director of Aristocrat plc agreed to exchange contracts at the original price of £12 million. اله The legal costs to Nobleman plc of buying the property were £120,000 and the selling costs to Aristocrat plc were £180,000.- Nobleman plc estimates that from the ownership of the property they can derive an annuity of £1 million per year for the following 30 years, The cost of capital is expected to remain constant at 5%.

(a) From the data provided in the question, identify various values for the initial measurement of the property in the financial statements of Nobleman plc. 8 Marks (b) Paradox plc, a company operating within the pharmaceuticals sector, is reviewing the fair value of certain assets in accordance with IFRS 13 Fair Value Measurement The company carries an asset that is traded in different markets and is uncertain as to which valuation it should use. Under IFRS, the asset has to be valued at fair value. Paradox plc currently buys and sells the assets in the Asian market. The data in relation to the asset is set out below: American European Asian Year to 31 December 2020- market market market Volume of market - units 16 million 8 million 4 million Price £76 £64 £886 Cost of entering the market £8€ £8€ £12 Transaction costs £4 £8€ £84 Discuss, with relevant computations, how Bronson plc should 'fair value the above asset. 6 Marks

For (a) 1. Using market prices, what is the initial 'fair value of the property to be recorded in the financial statements of Nobleman plc? 2. Using entity specific prices, what is the initial 'net realisable value of the property for Nobleman plc? 3. Using entity specific prices, what is the initial 'replacement cost' of the property for Nobleman plc? 4. Using entity specific prices, what is the initial 'value in use of the property for Nobleman plc? 5. Using entity specific prices, what is the initial 'recoverable amount of the property for Nobleman plc? 6. Using entity specific prices, what is the initial 'deprival value of the property for Nobleman plc? 7. Using entity specific prices, what is the initial 'historical cost of the property for Nobleman plc? For (b) 2 1. In accordance with IFRS 13 Fair Value Measurement, what is the 'principal market' for the asset? 2. In accordance with IFRS 13 Fair Value Measurement, what is the 'most advantageous market' for the asset?D-