ISSUE $3($Fair value measurement and recognition$)-$Farmer Joe owns farmland along a busy highway. He originally paid $$500,000$ for this land. The land sat on top of a reservoir of oil, which when pumped out resulted in total depletion expenses to Farmer Joe of $$125,000.$ The farmland currently has a value of $$600,000$ if it is used as farmland; however, a developer who wants to build a shopping plaza on the farmland has offered Farmer Joe $$850,000$ for the farmland.

Required:

$($a$)$ What ASC topic provides the broadest guidelines for the measurement of the fair value of nonfinancial assets?$$

$($b$)$ Which specific ASC subtopic$($s$)$ and section$($s$)$ provide the most relevant guidelinesfor determining Farmer Joes farmland assets?$$

$($c$)$ What amount should Joe recognize as the fair value of the farmland and why? $$

$($d$)$ Your opinion: What are the merits and drawbacks of the principle.