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L Ltd is in the manufacturing industry and is looking to diversify and expand its...

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Accounting

L Ltd is in the manufacturing industry and is looking to diversify and expand its business. L Ltd has acquired 100% interest in S Pte Ltd for a cash consideration of $650,000 on 31 July 2020. In evaluating the potential acquisition, L Ltd engaged valuation experts (2 external valuation specialists and 1 internal valuation team) in evaluating S Pte Ltds assets and liabilities, including those which are not previously recognized on S Pte Ltds financial records.

In terms of fair value reports by external and internal teams.

What are the factors to look out for on determining which fair valuation report to use.

External Valuation A - uses market capitalization rate method

External Valuation B - uses market comparable method

Internal Valuation C - uses market capitalization rate method with inputs different from

(Using strictly only SFRS (I) standards.)

What are the financial implications of each of the valuation reports.

Answer strictly from an accounting perspective and not finane.

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