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- If there is a principal market for the asset or liability, the fair value measurement shall represent the price in that market (whether that price is directly observable or estimated using another valuation technique), even if the price in a different market is potentially more advantageous at the measurement date.
www.ifrs.org/content/dam/ifrs/publications/pdf-standards/english/2021/issued/part-a/ifrs-13-fair-value-measurement.pdf
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If there is a principal market for the asset or liability, the fair value measurement shall represent the price in that market (whether that price is directly observable or estimated using another valuation technique), even if
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Sep 30, 2022 · ASC 820 emphasizes that a fair value measurement should be based on the assumptions of market participants; it is not an entity-specific measurement. Market participants are buyers and sellers in the principal (or the most advantageous) market for the asset or liability.
A quoted price for an identical asset or liability in an active market (e.g., an equity security traded on a major exchange) provides the most reliable fair value measurement and, if available, should be used to measure fair value in that particular market.
A key principle in ASC 820 is the concept of valuation based on the principal market or, in the absence of a principal market, the most advantageous market. The principal market is the market with the greatest volume and level of activity for the asset or liability being measured at fair value.
- Objective
- Key DeFINITions
- Fair Value Hierarchy
- MeaSureMent of Fair Value
- Disclosure
- Effective Date and transition
IFRS 13: [IFRS 13:1] 1. defines fair value 2. sets out in a single IFRS a framework for measuring fair value 3. requires disclosures about fair value measurements. IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to...
[IFRS 13:Appendix A] Fair value 1. The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date Active market 1. A market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing in...
Overview IFRS 13 seeks to increase consistency and comparability in fair value measurements and related disclosures through a 'fair value hierarchy'. The hierarchy categorises the inputs used in valuation techniquesinto three levels. The hierarchy gives the highest priority to (unadjusted) quoted prices in active markets for identica...
Overview of fair value measurement approach The objective of a fair value measurement is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. A fair value measurement requires an entity...
Disclosure objective IFRS 13 requires an entity to disclose information that helps users of its financial statements assess both of the following: [IFRS 13:91] 1. for assets and liabilities that are measured at fair value on a recurring or non-recurring basis in the statement of financial position after initial recognition, the valuat...
[IFRS 13:Appendix C] IFRS 13 is applicable to annual reporting periods beginning on or after 1 January 2013. An entity may apply IFRS 13 to an earlier accounting period, but if doing so it must disclose the fact. Application is required prospectively as of the beginning of the annual reporting period in which the IFRS is initially applied. C...
the key assumptions underpinning fair value measurements. Companies should pay particular attention to their disclosures about those key judgments and assumptions so that users of financial statements can understand the impact of these factors on a company’s fair value measurements.
Fair value also assumes that the transaction to sell the asset or transfer the liability takes place either: In the principal market for the asset or liability (i.e. the market in which the entity normally transacts), or; In the absence of a principal market, the most advantageous market.
