The three valuation approaches and techniques described in IFRS 13 are:
- Market approach,
- Income approach,
- Adjusted net asset method.
IFRS 13 does not prescribe a specific valuation technique, but encourages the use of professional judgment together with consideration of all facts and circumstances surrounding the measurement. These three different valuation approaches could be applied in determining the fair value of an unquoted equity instrument. However, regardless of the valuation technique used, the fair value measurement of those equity instruments must … Continue reading
Many measurements in financial reporting are, or purport to be, based on current market values. The case for such measurements is strongest where values can be taken from active markets and can therefore be objectively verified.
An active market is described in IFRS 13, as one where ‘transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.’ This definition is very universal, every transaction can be part of … Continue reading
IFRS 13 Fair Value Measurement is a single source of fair value measurement guidance that:
- clarifies the definition of fair value,
- provides a clear framework for measuring fair value, and
- enhances the disclosures about fair value measurements.
… Continue reading