EPPA 4716 Kajian Kes Integrasi - Latest2 1
EPPA 4716 Kajian Kes Integrasi - Latest2 1
EPPA 4716 Kajian Kes Integrasi - Latest2 1
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Fair Value Historical Relevance Reliable Conclusion
Problem cost
Problem Statement
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Fair Value Historical Relevance Reliable Conclusion
Problem cost
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Fair Value Historical Relevance Reliable Conclusion
Problem cost
• can accurately portray the value of an accreting • market prices fluctuate over the time.
asset.
• the assessment of fair value can lead to the
• revenues reported during each period and not at reporting of unfeasible gains or losses from
the point of harvest and subsequent sale. overestimation.
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Fair Value Historical Relevance Reliable Conclusion
Problem cost
Relevance
OLAM had disclosed some of the key parameters used for the valuation in its
R annual reports, which included :
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Fair Value Historical Relevance Reliable Conclusion
Problem cost
Relevance
Historical Cost Method Revaluation Method
• Assets: • Assets:
original purchase value market value
• Net book value may • Able to better assess
differ significantly from the value of potential
their true worth benefits
• May underestimate
the real worth of
assets
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Fair Value Historical Relevance Reliable Conclusion
Problem cost
Reliable
Muddy Waters’ view point
• Farmers future crops as gains
• Mark-to market valuation model
• Consisted of commodities
OLAM’s defence
• Applied IAS 41 appropriately
• Fair value estimated with reference of professional
valuation
• The “non- cash accounting gains” were in accordance
with the accounting treatments prescribed by IAS 41
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Fair Value Historical Relevance Reliable Conclusion
Problem cost
Reliable
OLAM’s view point
• Comply with requirement of IAS 41 to include the
unrealized gain or loss in the profit and loss
statement
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Fair Value Historical Relevance Reliable Conclusion
Problem cost
Conclusion
C • Three tests
• Fair value model is likely to be relevant for investors and
other users of financial statements
• Ensure the competence of valuers, valuation methodologies,
assumptions and inputs used in determining the fair value of
biological assets as in accordance to IAS 41
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Sample:
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Fair Value Historical Relevance Reliable Conclusion
Problem cost
Conclusion (Cont.)
Since there are a few challenges need to be face in the
application of IAS 41, we recommend:
• Appoint an independent qualified valuer.
• The need for the sponsor to be satisfied that the
independent valuer has appropriate and adequate
experience in valuation
• All parties should be satisfied with the measurement
and disclosure of the biological assets.
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Thank you
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