A ‘concept car’ is a car made to showcase new styling and/or new technology. Such vehicles are often shown at motor shows to gauge customer reaction to new and radical designs, but they do not go on to be mass-produced themselves. The website above provides information about an example of a recent concept car, the F015, produced by Mercedes-Benz. This concept car was developed to demonstrate and explore the possibilities of a ‘driverless car’. The F015 represents Mercedes-Benz’s vision of luxury autonomous vehicles by the year 2030. It is estimated that it has cost more than $10 million to design and build the F015. Required Assume that you are the chief financial officer of Mercedes-Benz and that you are required to determine the fair value of the F015 for the company’s financial statements. Discuss the process for determining fair value. You must support your answer by reference to relevant paragraphs of IFRS 13 ‘Fair Value Measurement’.
A ‘concept car’ is a car made to showcase new styling and/or new technology. Such vehicles are often shown at motor shows to gauge customer reaction to new and radical designs, but they do not go on to be mass-produced themselves. The website above provides information about an example of a recent concept car, the F015, produced by Mercedes-Benz. This concept car was developed to demonstrate and explore the possibilities of a ‘driverless car’. The F015 represents Mercedes-Benz’s vision of luxury autonomous vehicles by the year 2030. It is estimated that it has cost more than $10 million to design and build the F015. Required Assume that you are the chief financial officer of Mercedes-Benz and that you are required to determine the fair value of the F015 for the company’s financial statements.
Discuss the process for determining fair value. You must support your answer by reference to relevant paragraphs of IFRS 13 ‘Fair Value Measurement’.
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