An asset is sold in two different active markets at different prices. An entity enters into transactions in both markets and can access the price in…

(i) If Market C is the principal market: If Market C is the principal market for the asset (i.e., the market with the greatest volume and level of activity for the asset), the fair value of the asset would be measured using the price that would be received in that market, after taking into account transport costs. Fair Value will be ₹ Price receivable 88 Less: Transportation cost (6) Fair value of the asset 82 (ii) If neither of the market is the principal market: If neither of the market is the principal market for the asset, the fair value of the asset would be measured using the price in the most advantageous market. The most advantageous market is the market that maximizes the amount that would be received to sell the asset, after taking into account transaction costs and transport costs (i.e., the net amount that would be received in the respective markets). Market C ₹ Market D ₹ Price receivable 88 85 Less: Transaction cost (9) (3) 79 82 Less: Transportation cost (6) (6) Fair value of the asset 73 76 Since the entity would maximize the net amount that would be received for the asset in Market D i.e. ₹ 76, the fair value of the asset would be measured using the price in Market D. Fair value ₹ Price receivable 85 Less: Transportation cost (6) Fair value of the asset 79