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Revision question on IFRS 13 – Fair value measurement



The international accounting standard board (IASB) has recently completed a joint project with the Financial Accounting Standard Board (FASB) on fair value measurement by issuing IFRS 13 : fair value measurement.
IFRS 13 defines fair value, establishes a framework for measuring fair value and requires significant disclosures relating to fair value measurement. The IASB wanted to enhance the guidance available for assessing the fair value in order that users could better gauge the valuation technique and inputs used to measure fair value. There are now new requirements as to when fair value accounting is required, but the IFRS gives guidance regarding fair value measurements in existing standards. Fair value measurements are categorized into a three-level hierarchy, based on type of inputs to the valuation technique used. However, the guidance in IFRS 13 does not apply to transactions dealt with by certain specific standards.



REQUIRED :

  • Discuss the main principles of fair value measurement as set out in IFRS 13: fair value measurement
  • Describe the three level hierarchy for fair value measurements used in IFRS 13: fair value measurement.

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