Fair value

Fair value is 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.

11 Best fair value measurements under IFRS 13

11 Best fair value measurements under IFRS 13 – Several IFRS standards provide guidance regarding the scope and application of for assets and liabilities. Here they are from 1 to 11…….

1 Investments in associates and joint ventures

Investments held by venture capital organizations and the like are exempt from IAS 28’s requirements only when they are measured in accordance with IFRS 9. Changes in the fair value of such investments are recognized in profit or … Read more

The 15 most important IFRS 13 Topics

The 15 most important IFRS 13 Topics – The fair value measurement standard applies to most fair value measurements and disclosures (including measurements based on fair value) that are required or permitted by other standards. The 15 most important IFRS 13 Topics

Overview

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IFRS 13 understand inputs to valuation techniques

Overview  IFRS 13 understand inputs to valuation techniques

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IFRS 13 Disclosure fair value sensitivity

IFRS 13 Disclosure fair value sensitivity – For fair value measurements categorised within Level 3 of the , IFRS 13 93(h)(i) requires an entity to provide a measurement sensitivity analysis. The objective of that analysis is to provide users of financial statements with information about the measurement uncertainty inherent in fair value measurements categorised within Level 3 of the at the measurement date. IFRS 13 Disclosure fair value sensitivity

However, entities with significant balances in Level 3 of the fair value hierarchy (for example, … Read more

Recurring and Non-recurring fair value measurement

Recurring and Non-recurring fair value measurement

Recurring fair value measurements relate to those where measurement is required at the end of each reporting period-end in comparison to non-recurring fair value measurements which are driven by a particular event or transaction. Recurring and Non-recurring fair value measurement

Recurring fair value measurements would include a policy choice under IAS 40 or IAS 16 to record property at fair value or available for sale or financial instruments classification. RUSDecurring and Non-recurring fair value measurement

Non-recurring fair value measurements arise due to a period specific event such as … Read more

IFRS 13 Fair value non-performance risks

IFRS 13 Fair value non-performance risks – One of the key challenges for many reporting entities in estimating fair value in accordance with the fair value standards has been determining and incorporating the impact of non-performance risk, including credit risk, into the fair value measurement. Non-performance risk is the risk that an entity will not perform on its obligation. This risk should be incorporated into a fair value measurement using a market-based estimate that follows the framework of the fair value standards and should be measured from the perspective of a market participant. The concept of non-performance risk incorporates credit risk and other risk factors, including regulatory, operational, and commercial risks.

Credit risk is often the largest component of non-performance … Read more

IFRS 13 Measure non-financial assets liabilities

IFRS 13 Measure non-financial assets liabilities highlights key considerations in applying the fair value standards to develop the fair value measurements of non-financial assets and non-financial liabilities. It also addresses the considerations applicable to determining the fair value measurements often used to record business combinations and in impairment assessments.

When determining the fair value of non-financial assets and liabilities, it is important to consider the IFRS guidance and the valuation standards from the International Valuation Standards Council, which include chapters on business and business interests, intangible assets, plant and equipment, real property interests, and development property.

The fair value standards IFRS include the following fair value concepts: IFRS 13 Measure non-financial assets liabilities

  1. Selecting the appropriate market IFRS 13 Measure
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Fair value of decommissioning obligation

Fair value of decommissioning obligation is about a nice example of decommissioning a large oil platform.

In the oil and gas industry, it is important to plan ahead and consider how decommissioning large-scale assets such as rigs will be carried out in years to come. Specifically, you need to work out how to account for the current value of what you’ll be spending in the future. With depleting oil prices since 2014 from their glory days of $100 plus and the resulting volatility and uncertainty that has brought to the industry, being able to meet and estimate that obligation has never been more critical.

In this post, the obligations under the International Financial Reporting Standards (IFRS) will be discussed and … Read more