How does an entity measure the fair value of a tangible asset (such as property, plant and equipment) that does not have an observable market price or directly identifiable cash flows?

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How does an entity measure the fair value of a tangible asset (such as property, plant and equipment) that does not have an observable market price or directly identifiable cash flows?

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A cost approach will sometimes be an appropriate valuation technique for a fair value measurement, for example when an asset does not have an observable market price and it does not generate directly identifiable cash flows. The replacement cost approach assuming an in-use valuation premise is generally appropriate in such situations because a market participant buyer would not pay more for an asset than the amount for which it could replace the service capacity of that asset.

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