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Overview
IFRS 13 Fair Value Measurement applies to IFRSs that
require or permit fair value measurements or
disclosures and provides a single IFRS framework for
measuring fair value and requires disclosures about fair
value measurement
IFRS13 FairValueMeasurement
ByKendhoo
Objective
Keydefinitions
[IFRS13:AppendixA]
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Fairvalue
Thepricethatwouldbereceivedtosellanassetorpaidtotransfera
liabilityinanorderlytransactionbetweenmarketparticipantsatthe
measurementdate
Activemarket
Amarketinwhichtransactionsfortheassetorliabilitytakeplace
withsufficientfrequencyandvolumetoprovidepricinginformation
onanongoingbasis
Exitprice
Thepricethatwouldbereceivedtosellanassetorpaidtotransfera
liability
Highestandbestuse
Theuseofanonfinancialassetbymarketparticipantsthatwould
maximise thevalueoftheassetorthegroupofassetsandliabilities
(e.g.abusiness)withinwhichtheassetwouldbeused
Mostadvantageousmarket
Themarketthatmaximises theamountthatwouldbereceivedto
selltheassetorminimises theamountthatwouldbepaidto
transfertheliability,aftertakingintoaccounttransactioncostsand
transportcosts
Principalmarket
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Themarketwiththegreatestvolumeandlevelofactivityforthe
assetorliability
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Overview
IFRS 13 seeks to increase consistency and comparability in fair value
measurements and related disclosures through a 'fair value hierarchy
Fairvaluehierarchy
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Overview
Overview
Level 1 inputs
Level 1 inputs are quoted prices in active markets for identical
assets or liabilities that the entity can access at the measurement
date. [IFRS 13:76]
Level 2 inputs
Level 2 inputs are inputs other than quoted market prices included
within Level 1 that are observable for the asset or liability, either
directly or indirectly. [IFRS 13:81]
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Overview
Level 3 inputs
Level 3 inputs inputs are unobservable inputs for the
asset or liability. [IFRS 13:86]
Measurementoffairvalue
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Overviewoffairvaluemeasurementapproach
Guidanceonmeasurement
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Guidanceonmeasurement
Valuationtechniques
The fair value of a liability reflects nonperformance risk (the risk the
entity will not fulfil an obligation), including an entity's own credit risk
and assuming the same nonperformance risk before and after the
transfer of the liability [IFRS 13:42]
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Disclosureobjective
IFRS 13 requires an entity to disclose information
that helps users of its financial statements assess
both of the following: [IFRS 13:91]
Disclosure
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Disclosureexemptions
Identificationofclasses
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Specificdisclosuresrequired
Identificationofclasses
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Specificdisclosuresrequired
Specificdisclosuresrequired
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Specificdisclosuresrequired
for recurring fair value measurements categorised within Level 3of the
fair value hierarchy, a reconciliation from the opening balances to the
closing balances, disclosing separately changes during the period
attributable to the following:
total gains or losses for the period recognised in profit or loss, and the line
item(s) in profit or loss in which those gains or losses are recognised
separately disclosing the amount included in profit or loss that is attributable
to the change in unrealised gains or losses relating to those assets and
liabilities held at the end of the reporting period, and the line item(s) in profit
or loss in which those unrealised gains or losses are recognised
total gains or losses for the period recognised in other comprehensive income,
and the line item(s) in other comprehensive income in which those gains or
losses are recognised
purchases, sales, issues and settlements (each of those types of changes
disclosed separately)
the amounts of any transfers into or out of Level 3 of the fair value hierarchy,
the reasons for those transfers and the entity's policy for determining when
transfers between levels are deemed to have occurred. Transfers into Level 3
shall be disclosed and
discussed separately from transfers out of Level 3
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Specificdisclosuresrequired
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Effectivedateandtransition
[IFRS13:AppendixC]
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. Comparative
information need not be disclosed for periods
before initial application
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