Transport costs

Learning objectives

• Calculate the fair value of an asset for which location is a characteristic by deducting the costs of transport to the market.L2

Normative references

• IFRS 13 §26Transaction costs do not include transport costs; if location is a characteristic of the asset, the price is adjusted for the costs of transport to the market.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

7 questions

• Tolvane sells a lot of wheat; there is no principal market. Market A: price {price_a}, transaction costs {transaction_a}, transport costs {transport_a}. Market B: price {price_b}, transaction costs {transaction_b}, transport costs {transport_b}. Compute the net amount of each market, then the net amount of the most advantageous market.L2
• Rovelle trades steel plates; there is no principal market. Market A: price {price_a}, transaction costs {transaction_a}, transport costs {transport_a}. Market B: price {price_b}, transaction costs {transaction_b}, transport costs {transport_b}. Compute the net amount of each market, then that of the most advantageous market.L2
• For a lot of copper with no principal market, Estrelle compares two markets. A: price 600, transaction costs 18, transport costs 12. B: price 610, transaction costs 30, transport costs 24. The location of the lot is a characteristic of the lot (case data). What is the fair value of the lot?L2
• Which statements about transaction and transport costs are correct? (Several answers.)L2
• Quérande's natural gas is stored at a remote site; location is a characteristic of the asset (case data). The market price is {market_price}; delivery to the market would cost {transport_costs} and transaction costs would be {transaction_costs}. Compute the fair value.L2
• Pélerande's silver ingots are held in a remote vault; their location is a characteristic of the asset (case data). Market price: {market_price}. Transport costs to the market: {transport_costs}. Transaction costs: {transaction_costs}. Compute the fair value.L2
• For wine barrels stored in a cellar far from the market, Cortelle uses the quoted market price as fair value, with no adjustment, although location is a characteristic of the barrels (case data). What is the error?L2