Sino Agro Food Inc (fka SIAF)

[RealDutch]

Yes, but the appraiser can't use the profit method for calculating fair value because they don't have enough data.

This is some info I stole from Yasheng.

Appraisal and the selection of proper techniques:

a. The selection of proper techniques:
According to the Accounting System for Business Enterprises Article 39: Fair Value Calculation, an enterprise should adopt the appraisal technique that is applicable to the most current situation and has enough data to support it when calculating the fair value of its assets and liabilities.

The primary appraisal techniques to calculate the fair value of an enterprise’s assets and liabilities include the market-based approach, the profit method and the cost approach.

The market-based approach conducts appraisals by referring to same or similar prices of assets, liabilities or asset-liability combinations in the market, and also other related market data.

The profit method coverts future projected values into single current values.

The cost approach is an appraisal technique that reflects the required amount of money to replace related assets’ current ability to serve (generally referred to as current replacement cost).

Here are the considerations for using the profit method for them.

(1) Enough usable data and supporting information are accessible for predicting future profits.

(2) The appraisal result will best reflect the actual fair value.

(3) The risks for asset owner in the pursuit for projected profit are predictable and measurable by currency.

(4) The number of years making profit from the appraised asset is predictable.