Chapter 3: Fair value measurement Exercise 3.4 Highest and best use Cellar Ltd is in the business of bottling wine, particularly for small wineries that cannot afford sophisticated technical equipment and prefer to concentrate on the growing of the grapes. The white wine and champagne bottles used by Cellar Ltd have a built-in insulation device that keeps the contents of the bottle cold even when held in the hand. In January 2023, Solar-Blue, a company experimenting with energy sources useful in combating climate change, produced a device which, when attached to the outside of a container, could display the actual temperature of the liquid inside. The temperature was displayed by the highlighting of certain colours on the device. How this device could exactly be used with wine bottles had yet to be specifically determined. However, Cellar Ltd believed that its employees had the skills that would enable the company to determine the feasibility of such a project. Whether the costs of incorporating the device into wine bottles would be prohibitive was unknown. Cellar Ltd was concerned that competing wine-bottling companies might acquire the device from Solar-Blue, so it paid $100,000 for the exclusive rights to use the device in conjunction with bottles. Required The accountant wants to measure the fair value of the asset acquired. Discuss the process of determining this fair value. Chapter 5: Property, plant and equipment Exercise 5.12 Revaluation of assets On 30 June 2022, the statement of financial position of Kookaburra Ltd showed the following non-current assets after charging depreciation